Back To The “Landing Page”
Here we are, another calendar quarter down with one more to go in 2024, and investors have yet to see a “hard landing” emerge. As the summer months progressed, the money and bond markets began to price in greater odds that an economic downturn would eventually rear its ugly head, but thus far, the “soft landing” is still the prevalent scenario.
Leading the market in that direction had been a cooling in labor market activity. Indeed, prior to the September jobs report, the pace of new job creation, as well as a measurable rise in the unemployment rate, created a narrative that the once solid labor market backdrop was finally giving way to weakness. While it is only one month’s worth of data, the September numbers suggest that the labor market ‘cooling’ may not be as ‘cool’ as previously thought. However, the three-month moving average for nonfarm payrolls has slowed to an increase of +186,000 versus springtime readings over the +200,000 mark.
While these jobs numbers do substantiate some labor market cooling, they do not point to labor market activity weakening in a noteworthy fashion. In fact, the leading indicator, weekly jobless claims, continues to come in at levels about 100,000 below the readings that were being registered prior to past recessions. Against this backdrop, the consumer is expected to continue to be a supporting influence for growth in the months ahead.
Although the economy is not firing on all cylinders, we continue to expect modest growth and to avoid an outright recession as we end this year.
“The economy is showing resilience with modest growth expected to continue through 2024, avoiding a hard landing.”
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