Thursday's Scoop: Balloon☀️

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Here’s what you need to know today to inform your work, spending, and investments…

1. Layoffs are still pretty low.

2. Americans are more productive at work, but real wages aren’t keeping up.

3. US imports picked up in January, which has mixed signals for the economy.

Unemployment Rate: 3.7%
^{Still near the lowest rate in 50+ years}

Layoffs are still relatively low despite the layoff headlines from tech, media, and finance. The Labor Department reported initial jobless claims held last week at 217,000, still pretty low. The number of people receiving unemployment benefits for consecutive weeks increased slightly, indicating finding work may be more challenging. Another report from coaching firm Challenger, Gray & Christmas said planned corporate layoffs rose only 3% in February. While it was the highest number of any February on record, layoff announcements this year are 8% lower than last year. The job market has been excellent by most measures, with near-record unemployment, but recent figures have indicated slower hiring and more layoffs. Tomorrow’s jobs report will be critical.

Americans keep getting more productive, but wages haven’t grown as quickly. The Labor Department reported that nonfarm business sector labor productivity increased at a 3.2% annualized rate in the last three months of the year, which was far more productive than expected. Output increased 3.5%, and hours worked increased 0.3%. Throughout 2023, labor productivity increased by 1.3%, and inflation-adjusted wages rose only 0.1% after declining -4.1% in 2022 and -0.3% in 2021.

The Market: ⬆️ +1.0%
S&P 500: 5,157.36
1Mo: +43% | 1Yr: +29% | 5Yr: +88%

The market floated to another new record high today without any major shift in the storyline. Layoffs are still pretty low. The economy seems to be slowing, which should mean lower rates sometime this year.

Businesses ramped up exports to other countries in January, a good sign for the economy, but imports also surged. The Commerce Department reported the US trade deficit (exports minus imports) increased 5.1% in January. US businesses shipped record capital goods overseas, but a decline in oil exports offset that. Higher imports usually drag on economic growth, but the kinds of capital goods and motor vehicle goods imported are a good sign of business investment.