Labor Market
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 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…
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…
We take stock of earnings, AI capex and the labor market and explain why we think the repeated new highs in the S&P 500 are justified.
The April US employment report points to a goldilocks labor market. Nonfarm payrolls rose 115k, beating estimates, after a strong upwardly revised 185k in March. Two-month revisions removed 16k jobs, leaving the 3-month moving average at 48k, above our 30k…
Improving job growth keeps Fed rate cuts off the table, but evidence of labor market tightening will be required before rate hikes become part of the discussion.