MacroResearchBoard

U.S. Economic Bears Will Be Proven Wrong, Again – August 12, 2024

A just-published report highlighted a number of insightful U.S. employment indicators that underscore that the labor market is not deteriorating. Rather, employment trends are still just cooling from the unprecedented levels recorded during the post-COVID reopening “boom”. Importantly, the conditions that would herald a recession and profit downturn are not being signaled: layoffs continue to hold at historically very low levels.

The report concluded that the recent spike in U.S. economic fears, driven mostly by softer labor market data is overblown. MRB has not changed its view on the U.S. economic outlook: the cycle still has plenty of legs. To the extent that the last (weak) payroll report will elicit a more dovish Fed response, it will ultimately act to boost growth prospects.