Medicare Agent News: Jobs Report on Deck

Monday, July 11, 2022

Jobs Report on Deck

By Nicholas Jasinski | Thursday, July 7

Pro Labo(u)r. The U.S. labor force was in focus today, with the market digesting a pair of releases ahead of tomorrow's June employment report. The overall picture was of a still-tight job market, but one that has eased slightly from earlier this year.

This morning's report on initial jobless claims for the week ending July 1 showed a slight increase, to 235,000, holding above 230,000 for the fifth straight week. Layoffs have generally been in the same sectors that boomed during the Covid-19 pandemic, namely technology, housing, e-commerce warehouses, and big-box retail. Automotive supply chain issues also contributed via short-term furloughs. Barron's Sabrina Escobar has more on today's claims data here.

Also still top of mind was yesterday's Job Openings and Labor Turnover Survey, which showed 11.3 million job openings on the last day of May, down from 11.7 million in April. That leaves about 1.9 available positions for each of the 6 million unemployed workers in May, a ratio that remains historically high.

The hope for the Federal Reserve now is that, with a bit more slack in the labor market, there will be less upward pressure on wages and inflation. And the hope for markets is that such slack would allow the Fed to slow its pace of rate hikes.

Stock investors appear to be betting on that outcome. The S&P 500 rose for a fourth-straight session, adding 1.5% today. The Nasdaq Composite jumped 2.3%, and the Dow Jones Industrial Average gained 1.1%.

The labor market will remain top of mind tomorrow as well. Here's Stephen Stanley, chief economist at Amherst Pierpont Securities, writing to clients today:

Labor demand may be cooling slightly from the most overheated conditions in at least 50 years, but firms are still struggling mightily to hire. There are pockets of weakness, as a few tech companies and some businesses in the mortgage lending sector have announced planned layoffs, but for most employers, the prevailing theme continues to be a desperate effort to staff up. If you have gone out to eat lately, or, worse yet, taken a commercial flight, this point is presumably painfully obvious...In short, high-frequency indicators all point to a labor market that remains on the boil, though perhaps slightly less overheated than earlier in the year.

The June jobs data will be released at 8:30 a.m. ET tomorrow.

Across the pond, London’s FTSE 100 index gained 1.1% today, following U.K. prime minister Boris Johnson's resignation as Conservative party leader. He'll remain in office until a successor has been selected.

The British pound rose 0.9% against the U.S. dollar, to about $1.20.

"The indifference probably reflects that Johnson’s replacement is likely to follow similar policies and that there has been a risk premium attached to British politics for some time, according to Kieran Tompkins, an economist at Capital Economics," wrote Barron's Rupert Steiner today, from the London bureau. "However, the prospect of recession and the continuing disputes over Brexit mean that the pound will fall further and the FTSE 100 will lose another 3% by the end of the year, he said."

Meanwhile, oil prices bounced today after dropping a combined 12% on Tuesday and Wednesday. The U.S. crude benchmark added 4.2% today, to $102.73 a barrel. That boosted energy stocks, which have likewise shed double-digits in recent days: the S&P 500 sector surged 3.6%.