All this week, we’ve seen the same dynamic. Namely, “Cooler Job Market = Hotter Stock Market.” Equities are advancing again in the early going today as layoff announcements popped and inflation data didn’t shock.
Crude oil and the dollar are up a bit, too, while gold, silver, and Treasuries are largely flat.
On the news front...
Tomorrow is the all-important “official” jobs report for the month of August. Economists are expecting a number of around +170,000, which would be down from +187,000 in July. But the other data we’ve already gotten this week has offered clear evidence of a downturn in labor demand.
Just this morning, for instance, outplacement firm Challenger, Gray & Christmas said layoff announcements more than tripled to around 75,100 in August from 23,700 in July. The Federal Reserve wants to see labor markets cool because that should help ease wage pressure.
These charts I shared on X (the platform formerly known as Twitter) yesterday help illustrate the shift in the numbers. Don’t forget: You can follow me at @RealMikeLarson or our main MoneyShow account at @MoneyShow to get these updates in real time!
Meanwhile, keep an eye on the “Fedspeak” coming out in the wake of Federal Reserve Chairman Jay Powell’s big talk in Jackson Hole, Wyoming. Atlanta Fed President Raphael Bostic weighed in today, cautioning that monetary policy is already “appropriately restrictive” and that he thinks the Fed should be “cautious and patient” about further hikes. Chalk one up for the “Doves”!