The Weekly Scoop

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Everyone was focused on the jobs market this week, combing through multiple reports on the state of hiring, firing, and quitting.

The big question: Is it a good thing that companies are pulling back on their hiring plans and starting to lay off some workers?

Layoffs obviously stink for the people getting laid off, but there are so many available jobs that they have been able to find new roles quickly. The economy has been running too hot, as indicated by inflation, the economic heat gauge. Policymakers monitor corporate hiring behavior as they try to cool the overheating economy. Companies have been trying to do way too much and haven’t had enough resources to do it, humans included. The “labor shortage” could be more accurately defined as a “labor over-demand.” We have more people working now than before the pandemic, but there are still nearly two available jobs for every unemployed worker. Unemployment has been about as low as economists think it can get.

Seeing job openings decline and hiring slow without a broad uptick in layoffs feels like the Fed’s policy is working. The next question is whether this is just a slowdown or the start of a more significant downturn. So far, signs still point to a bearable slowdown.

🐻 Reasons to be pessimistic:

• Companies are pulling back on hiring plans. The Labor Department's Job Openings and Labor Turnover Summary (JOLTS) showed a steep decline in available positions to 9.9 million in February. It's the most significant drop to the lowest number in over a year, causing concerns of a fast-moving economic slowdown.

• Companies hired fewer workers in March. The Labor Department reported 236,000 people were added to the workforce in March, down from 326,000 in February. That's closer to a more average hiring pace for a healthy economy.

• The recent banking crisis seems under control, but it will likely take a toll on the economy. The CEO of America's biggest bank, JPMorgan Chase, said this week that the uncertainty would likely lead to tighter lending. Banks will be more careful and selective with whom they lend. Tougher borrowing environments make business a little more challenging.

• The manufacturing sector is in a slump. A closely-watched survey from the Institute for Supply Management (ISM) on Monday reported a contraction across every aspect of the manufacturing industry. Manufacturing business activity in March fell to the lowest level in three years.

• Oil-producing nations are trying to keep oil prices from falling. That could mean more inflation. The Organization of the Petroleum Exporting Countries (OPEC) announced a surprise production cut today by 1.16 million barrels per day. The reduced supply caused a spike in oil prices. Major oil nations like Saudi Arabia, Russia, and others coordinate to control the available global oil supply and affect prices.

🐂 Reasons to be optimistic:

• Layoffs inched lower last week. The Labor Department reported initial jobless claims fell to 228,000 last week, roughly still in line with pre-pandemic averages for a healthy economy.

• There are still a lot of available jobs, arguably too many. There was a significant drop in job openings in February to 9.9 million, but pre-pandemic averages were around 7 million. There are 1.7 openings for every unemployed person.

• Fewer job postings didn't translate to more layoffs. The JOLTS report indicated total layoffs and discharges decreased in February. More people quit their jobs, which is a sign of a healthy economy. The workers hit by mass layoffs from tech companies perhaps either found jobs quickly or received enough severance to avoid filing for unemployment.

• Most of the US economy is still growing, just more slowly. A closely-watched survey from the Institute for Supply Management (ISM) indicated that the services sector was still expanding, but just not as strong as the month before. The services industry accounts for two-thirds of the economy.

🏡 For your home

6.4% = Average 30-year mortgage rate

That’s down from 6.8% a month ago and up from 4.8% a year ago. _{Mortgage Bankers Association, 3/30/23}

$363,000 = Median existing home sales price

It was $361K a month ago and $362K a year ago. _{National Association of Realtors, 1/31/23}

💼 For your work

228,000 = Layoffs Last Week (Initial jobless claims)

That’s down from 246K the week before and in line with pre-covid averages. _{Labor Dept., 3/30/23}

236,000 = New jobs added last month

That’s down from 326K the month before and slightly above pre-covid averages. _{Labor Dept., 3/31/23}

3.5% = Unemployment rate

That’s down from 3.6% the month before and near the lowest rate in 50+ years. _{Labor Dept., 3/31/23}

9.9M = Available jobs

That’s down from 10.6M the month before and well above pre-covid averages of ~7M. _{Labor Dept., 2/28/23}

Who’s hiring: Construction, leisure, and hospitality

Who’s firing: Finance, technology, and business services

👜 For your wallet

5.0% = Cost of living increase (1-Year Inflation)

Living costs are 0.3% higher than the month before. Normal inflation sees prices rise by 0% to 0.2% per month, 1-2% per year. _{Bureau of Economic Analysis, 2/28/23}

10.2% = Groceries cost increase (1-Year inflation)

Groceries are 0.3% more expensive than a month ago. _{Bureau of Labor Statistics, 2/28/23}

$3.55 = National Gas Price/Gallon

That’s up from $3.41 the month before and lower than $4.16 a year ago. _{AAA., 4/6/23}

💰For your savings

0.24% = Average interest banks pay on a savings account

5.00% = Interest rate banks earn on their savings accounts

The Federal Reserve has raised baseline interest rates from 0% to 5% in the past year. Make sure your bank is paying you higher interest on your savings. _{Federal Reserve, 3/22/23}

💸For your investments

+1.4% = This past week’s change in the US Stock Market

+1% past month, -9% past year, and +57% over 5 years. _{S&P 500 Index, 4/6/23}

3.0% = The yield on the 10-Year US Treasury Bond

Yields are -7% past week, -17% past month, and +27% over the past year. _{US Government Bonds, 4/6/23}

+0.1% = This past week’s price change for Bitcoin

+25% in the past month and -36% in the past year. _{Coinbase, 4/6/23}

+4.5% = This past week’s price change for Ethereum

+19% in the past month and -42% in the past year. _{Coinbase, 4/6/23}