The Week in Review: August 8, 2022
A Non-Recessionary Surge in Jobs … with One Caveat
The U.S. Bureau of Labor Statistics reported nonfarm payrolls soared 528,000 in July, about double expectations per Bloomberg News. The unemployment rate fell from 3.6% in June to 3.5% in July. July’s increase pushed nonfarm payrolls back to the pre-pandemic level.
Companies have been adding jobs at a robust pace. Under more “normal times,” such job growth would be a reflection of an economic boom, as companies hire amid strong demand for their goods and services.
However, the keywords are “normal times.” We are exiting a pandemic and have exited a national lockdown. These are far from normal times.
Much of the economic data outside of job growth paints a different picture, one in which overall economic growth has slowed.
One metric that points to slower economic growth is the downturn in job openings.
A softer economy has reduced openings by over 1 million in just three months. Still, open positions remain extremely elevated and well above the peak in the 2010s.
Perhaps much of the recent payroll growth may simply be from companies that need to backfill job openings that have been available for months.
If you have any questions or concerns, please don’t hesitate to let me know.
Two for the Road
From 1973 to 2021, companies that paid quarterly dividends furnished annual returns of 9.6% a year, crushing nonpayers’ record of 4.8%. - Fortune, July 14, 2022
Private-sector payrolls have replaced all 21 million jobs that were lost in the spring of 2020. - Livemint, July 22, 2022
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1. The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
2. The NASDAQ Composite is an unmanaged index of companies which cannot be invested into directly. Past performance does not guarantee future results.
3. The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
4. The Global Dow is an unmanaged index composed of stocks of 150 top companies. It cannot be invested into directly. Past performance does not guarantee future results.
5. CME Group front-month contract; Prices can and do vary; past performance does not guarantee future results.
6. CME Group continuous contract; Prices can and do vary; past performance does not guarantee future results.