Planning Briefs
Strategic Investing Amid The Hot Labor Market
Published Thursday, October 5, 2023 at: 12:41 PM EDT
The number of job openings increased to 9.6 million on the last business day of August, the U.S. Bureau of Labor Statistics reported Tuesday, much more than the 8.8 million expected by Wall Street. It’s good news. If demand for workers stays this strong, a recession is unlikely because the number of workers earning income and spending will continue to rise as openings are filled in the weeks ahead.
Historically, job seekers outnumber job openings, as illustrated in the black line running below the red line for most of the past two decades. However, since the pandemic, the black line’s been considerably higher than the red line. The gap has narrowed in the past year but moved much higher in August and the job market remains tight. Labor market strength makes the Federal Reserve likely to keep lending rates higher for longer, which could lower stock prices but makes a soft landing easier. That’s what long-term investors in stocks care about most.
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