It’s being called the “Goldilocks” report.
Last Friday, we learned that demand for workers in the United States remained strong in 2022. The unemployment rate dropped to 3.5 percent in December. (It was 3.7 percent in November.) That brought U.S. unemployment back to where it was before the pandemic – at the lowest level in more than 50 years, reported Megan Cassella of Barron’s.
“Hopes the Federal Reserve can tame inflation without widespread job losses mounted Friday after a government report showed robust hiring and a historically low unemployment rate paired with a cooling in wage growth. In some respects, the December jobs report offered a best-case scenario for the Fed — Americans keep their jobs but inflationary pressures of earnings are easing — giving policymakers room to slow the pace of interest-rate hikes,” reported Reade Pickert of Bloomberg.
Financial markets responded enthusiastically, making Friday the best day for U.S. stocks in more than a month. The Standard & Poor’s 500 Index, Dow Jones Industrial Average, and Nasdaq Composite Index all gained more than 2 percent on Friday, reported Bloomberg. The bond market rallied, too. Yields on U.S. Treasuries dropped lower across most maturities.
It’s important to note that not all companies were hiring in December. Thursday’s private payrolls report showed 235,000 jobs were created in December despite larger companies cutting more than 150,000 jobs. The drivers of jobs growth in the U.S. right now are small- and medium-sized businesses, which added enough jobs to offset layoffs by larger employers, reported Bloomberg.
Large technology firms are among the companies laying off workers. Many borrowed and spent significant amounts of money to grow during the pandemic when demand for tech products and services was high. However, consumer demand has diminished, and large tech firms have been forced to reevaluate. Weak performance among tech stocks is one reason 2022 was a dismal year for the Nasdaq Composite Index, reported Tae Kim of Barron’s.
Last week, major U.S. stock indices moved higher and the yield on the 10-year U.S. Treasury moved lower.
https://www.barrons.com/articles/december-jobs-report-today-51672960418 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/01-09-23_Barrons_The%20Good%20and%20Bad%20in%20the%20Jobs%20Report_1.pdf)
https://www.bloomberg.com/news/articles/2023-01-06/fed-gets-goldilocks-in-jobs-report-slower-wage-growth-solid-hiring (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/01-09-23_Bloomberg_Fed%20Gets%20Goldilocks%20in%20Jobs%20Report_2.pdf)
https://www.bloomberg.com/news/articles/2023-01-05/us-companies-add-more-jobs-than-forecast-adp-data-show (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/01-09-23_Bloomberg_US%20Employers%20Add%20235%2c000%20Jobs_5.pdf)
https://www.barrons.com/articles/tech-stocks-employees-layoffs-consumer-demand-51673021476?mod=hp_HERO (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/01-09-23_Barroms_Techs%20Bill%20is%20Coming%20Due_6.pdf)
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