MacroEdge 11/13 Ozone Report: October Employment Report, Labor Market Cools Further, Critical 2 Quarters Ahead, Election Week
In the month of October - the labor market cooled further - with job losses rising. Markets and macro face 2 critical quarters of data ahead & a wild and potentially historic election week lies ahead.
October Employment Report + Critical 2 Quarters Ahead (@DonMiami3, MacroEdge Chief Economist)
Good Sunday evening MacroEdge Readers & Community,
This Sunday evening we’ll dive into our review of the labor data from October - as well as some of the broader trends that are underway as a dynamically difficult-to-read economy continues to see labor market softening. As we gear up for both an election and an FOMC week, like with any election, it’ll be a historical week with potentially unpredictable outcomes with policy implications that we must prepare for to anticipate their impact on both markets & the economy at large. There are many different takes currently on the state of the election and where things stand - but in Nevada, one state I watch closely for both economic and political shifts, things seem further right of where they were in 2022 in terms of the early vote, so that will be something to monitor Tuesday night to see if things materialize more broadly across the country.
As the employment data has evolved largely as expected over the last 2 quarters - except for the minor dip in the U-3 headline unemployment rate from the highs - the next two quarters in my opinion are the most critical quarters of employment data since the second half of 2007 into early 2008 (particularly with our negative private nonfarm reading on Friday). Add in the real estate mix on the data front in addition to the manufacturing data (particularly, employment) and the conditions remain for significant headwinds for employment growth over the next year.
This evening, we’ll examine the state of the labor market based on the October data and potential volatility, given the normalizing yield curve and further rate cuts ahead.
