Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

'Soft Landing' Crowd One Big Step Closer to Winning the Battle

Published 02/06/2023, 03:08 AM
Updated 07/09/2023, 06:31 AM

WALL STREET WAS stunned Friday morning by the strength of the jobs market. While technology company layoffs have lately hijacked the fear-mongering media’s narrative, the truth is that the employment picture is quite strong.

With a 517,000 gain in net employment last month, along with ebbing wage growth, the “soft landing” crowd is one big step closer to winning the battle against the recession prognosticators. True, January’s job jolt is merely one data point. What’s maybe more impressive is that there have been 10 straight better-than-expected monthly payroll reports. That trend is a job seeker’s friend.

Something would have to be truly wonky for the U.S. economy to be in a recession right now.

There’s a revealing chart from J.P. Morgan Asset Management that illustrates the point. Variables such as industrial production, and wholesale and retail sales data, suggest modest economic weakness. But inflation-adjusted personal income, growth in payrolls, and real consumer spending, all indicate the economy is in decent shape.

Variables Used by NBER to Determine a Recession

Source: J.P. Morgan Asset Management

Even more encouraging for investors is that the global economic tide may be turning for the better. Consider that there have been significant upward revisions to GDP growth forecasts in Europe and Asia over the past two months. A mild winter across the euro area has sent energy prices plunging, while China’s swift reopening is a demand driver for the world.

Does all this sanguine news justify current stock market levels? That’s always hard to determine. The S&P 500 now trades at a somewhat elevated 18.4 times forward earnings, according to FactSet.

What’s more, value stocks and some European indexes are already at all-time highs. The recent good news may bolster investor confidence. But this doesn’t seem like a time to be making radical portfolio changes.

***

This article was first published on The Humble Dollar

Latest comments

What are households saying?
oh we are saved this guy I never heard of just consign for the propaganda ministry. Party tonight on that guy who's coming?
Inflation is a very sticky creature and will come back. Not sure about any "soft landing."
You can't go off the jobs data.  Those numbers are manufactured to where ever they want them to go and quietly corrected on weekends months later when some other event is going on.  The latest numbers - case in point.. Biden fodder for the State off the Union.  No one believes them and neither should you.
Trump boasted about the job #s during his term.  Were you complaining about those #s then?
Wonky? Seriously? Jobs are just jobs. Amount of people hired doesnt actually show more people are getting financially healthy. If you go to the food store your job numbers do not play any roles. Some products came back down in price but still way higher than pre pandemic. Did actual wages went up over 10% in the past year? These numbers could mean that people had to get a second full time job in order to make ends meet. Your logic is flawed.
A mild winter across the euro area has sent energy prices plunging, but not so in France electricity just went up 18% and another increase of 20% coming in July, so i don't know where you get your information from
Bullish prediction full of bulls
🤣
all your bullish positive prognosis is a guidance to further high inflation, although at stable 4-6% level.....for long time
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.