041: Deciphering Labor Market Trends and Consumer Confidence 08-29-23

Before you make a move, you need to listen closely. Megan Horneman, Chief Investment Officer for Verdence Capital Advisors, is about to decode the latest data from labor markets and consumer confidence. Yes, those job postings have seen a plunge since the pandemic’s end, and the disparity between available and hard-to-get jobs is widening, suggesting a waning labor market. You would appreciate that the last we saw these signs, the unemployment rate had a surprise in store.

But that's not all. Megan takes you through the recent dip in consumer confidence, pegged heavily on the current economic circumstances and the hike in fuel prices. Despite the consumer spending staying robust, these factors might pose a challenge in the second half of the year. Megan's insights will arm you with a robust understanding of current economic trends and their implications for the ordinary consumer. We are all ears for your thoughts and queries at podcasts@Verdence.com.

Hello, I'm Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors, coming to you today with Markets With Megan. Megan e wanted to go over a couple key data points that we got this morning. The first one was on the labor market, and this has been consistent with some of the other cracks we're starting to see in the labor market. This is the Jolt's Jobs Opening Report and what we've seen for many, many months since the end of the pandemic, that there's been well more than even two positions available for every unemployed American. What we're seeing is that job postings, or those amount of jobs out there that they are declining pretty rapidly. They actually fell in July by the lowest level since March of 2021.

The component we look at is the amount of the jobs plentiful versus the jobs that are hard to get.

This is a sentiment from the consumer and what you're seeing is that the jobs plentiful number versus the hard to get that actually fell to the lowest since April of 2021. If you go back to 1970, when you see that indicator peak and start to come down, this has always led to an increase in the unemployment rate. So again, this is further indication that the labor market is starting to weaken. The other thing we got is consumer confidence, and consumer confidence has been really resilient, but we've seen that this month we saw a pretty big drop in consumer confidence and it was primarily led by confidence on the present economic conditions, and that was led by the recent increase we've had in gasoline prices, as well as some weakening in the job market. This, we think, is these both are things that will continue to challenge the resiliency of the consumer spending that we've seen, and we'll think this will continue into the second half of this year. That's all we have today. If you have any questions or comments, please feel free to reach out to Verdence dot com. Thank you.