Labor Market
The May NFIB survey missed estimates and pointed to softer small-business conditions, though the signal on the broader labor market remains mixed. The headline index fell to 95.3 from 95.9. The overall picture was soft, with both capex and hiring intentions…
Our US Investment strategists expect consumption to maintain its expansion-consistent pace, though households remain exposed to any material equity-market decline. Consumption is still growing near a 7.7% annualized nominal pace, while real disposable income…
Although the multi-decade surge in the value of households’ equity holdings has made US activity more vulnerable to a stock selloff, the latest income, spending and employment data suggest that consumption growth can carry on at a 2% inflation-adjusted pace.
The blowout US payrolls report reinforces improving labor market momentum and upside risks to Fed policy, arguing for continued caution on duration. Non-farm payrolls rose 172k, well-above expectations of 88k, while the prior two months were revised sharply…
Canada’s labor market is showing early signs of stabilization, but not sufficient for the Bank of Canada to begin raising rates. Employment increased by 88k in May, well above expectations of 10k, led by a jump in full-time employment, while the unemployment…
The April JOLTS report confirms a mixed labor market signal rather than a clean reacceleration, reinforcing the view that the Fed can avoid hiking unless inflation expectations or core inflation force the issue. Job openings jumped sharply above expectations…
Our Counterpoint strategists argue AI will not make the human brain obsolete. AI can replicate parts of our brain’s neocortex, which supports logic, reasoning, mathematics, and other IQ-driven tasks, but it lacks the limbic system that generates emotion and…
AI excels at IQ but fails miserably at EQ. Hence, AI will obsolete any job that relies on IQ, including many graduate-level jobs. But high-EQ humans will be in high demand to pair up with AI, and many of these jobs will be middle income jobs. We discuss the implication for the economy and markets. Plus, a new tactical trade is underweight global tech versus healthcare.
The latest UK employment and inflation data came in cooler than expected, reinforcing the case for weaker growth ahead. Payrolls fell by 100k in April after a 28k decline in March. The unemployment rate also rose 0.1pp to 5.0%. Average weekly earnings ticked…
Canada’s growth outlook is deteriorating, with labor-market slack rising and economic surprises turning lower. Canadian economic surprises have turned negative and continue to fall. The April jobs report disappointed, with employment contracting for the third…