SPY - The Labor Market Is Rapidly Weakening
2024-06-05 14:42:29 ET
Summary
- Fresh data shows that a substantial weakening in the labor market is underway.
- While unemployment claims show little cause for concern, job openings are rapidly falling, indicating a continued, substantial slowdown in hiring.
- The economy increasingly appears headed for a recession. With the stock market at all-time highs, are traders asleep at the wheel?
- The widely anticipated nonfarm payrolls report is released this Friday, which will shed further light on the direction of the economy.
I'm generally not a fan of making trades based on jobs reports, either from the government or private providers like ADP. Payroll reports are heavily revised and backward-looking. Making matters worse, markets will frequently treat "good news as bad news" and vice versa. But recent higher-frequency data shows a stark weakening in the labor market, and I think it's worth discussing here with readers ahead of Friday's nonfarm payroll report. Many of you might be surprised by what the data is saying. The S&P 500 ( SPY ) is rallying again to near an all-time high off of rate cut hopes, but little attention is being paid to why the Fed might need to cut....
The Labor Market Is Rapidly Weakening