The labor market’s upside surprise: Chart of the Week
Published On Jan 11, 2025, 6:00 AM
The recent jobs report showed an unexpected increase in U.S. employment, with 256,000 new jobs created in December, surpassing expectations by 91,000. This has implications for the labor market and inflation, potentially leading to a delayed pause on interest rate cuts from the Federal Reserve. Meanwhile, despite the job growth, many of these positions are lower-paying, less secure, and more part-time, raising questions about the overall health of the economy. The report caused significant movements in the stock and bond markets, highlighting the sensitive nature of investors to economic data releases.
Stock Forecasts
SPY
Negative
Given the strong employment numbers, it is likely that the Fed may reconsider its future actions on interest rates, leading to lower investor confidence in equities, particularly in growth sectors that are more sensitive to rates. However, sectors such as healthcare and public services could see stability due to consistent demand.
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