Week of Feb 2, 2024 Weekly Recap & The Week Ahead
“If you can learn to create a state of mind that is not affected by the market’s behaviour, the struggle will cease to exist.” -Mark Douglas
1. Job Quitting Fell 12% Last Year — workers called it quits less frequently in 2023, a sign confidence in the labor market is falling as the U.S. economy is expected to slow and Americans are taking longer to find new jobs. Americans quit 6.1 million fewer jobs last year than in 2022—a decline of 12%, the Labor Department said Tuesday. In December alone, quits fell to the lowest monthly level in nearly three years, after adjusting for seasonal fluctuations. In more recent months, prospective job seekers have seen news of high-profile layoffs, smaller pay bumps and sharp slowdowns in hiring in certain industries. Those pockets of weakness stand in contrast to years of consistent overall job growth and a historically low 3.7% unemployment rate at the end of last year.
2. Private payroll growth slowed to just 107,000 in January, below expectations — Private payroll growth declined sharply in January, a possible sign that the U.S. labor market is heading for a slowdown this year, ADP reported Wednesday. Companies added 107,000 workers in the first month of 2024, off from the downwardly revised 158,000 in December and below the Dow Jones estimate for 150,000, according to the payrolls processing firm. Leisure and hospitality posted the biggest increase, with an addition of 28,000 workers, while trade, transportation and utilities added 23,000, and construction rose by 22,000. Services-providing companies were responsible for 77,000 jobs, with goods producers adding the rest.
3. Fed Keeps Rates Steady While Powell Says March Cut Unlikely — the Federal Reserve held interest rates steady for a fourth straight meeting and signaled an openness to cutting them, though Fed Chair Jerome Powell threw cold water on investors’ hopes that reductions would begin in March. The central bank’s policy-making Federal Open Market Committee showed it is in no rush to reduce rates, noting in a statement Wednesday that it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.” While Powell acknowledged the dramatic inflation progress seen in recent months, he repeatedly emphasized the need to see “more” data confirming that downward trend. Powell spoke just after the Fed issued a statement following their two-day meeting, where officials dropped their previous assertion that a rate hike was possible and instead adopted a more even-handed assessment of the future policy path.
4. January hiring was the lowest for the month on record as layoffs surged — the report follows news Wednesday from ADP that private payrolls increased by just 107,000 for the month. On Friday, the Labor Department will be releasing its nonfarm payrolls count, which is expected to show growth of 185,000. The job outplacement firm said planned layoffs totaled 82,307 for the month, a jump of 136% from December though still down 20% from the same period a year ago. It was the second-highest layoff total and the lowest planned hiring level for the month of January in data going back to 2009.
5. Jobs Growth of 353,000 Blasts Past Expectations as Labor Market Stays Hot — employers added 353,000 jobs last month, the Labor Department reported Friday. That was the strongest in a year and nearly double what economists surveyed by The Wall Street Journal expected. December’s payroll gains were also revised upward to 333,000 from 216,000, further undercutting the widely held view among economists and investors that it was becoming harder to find a job.
The unemployment rate in January held steady at 3.7% instead of rising to 3.8% as economists had forecast. Wages outpaced expectations, jumping 4.5% last month from a year earlier, though the large increase may have reflected a big drop in hours worked—a possible result of bad winter weather, some analysts said.
The week ahead — Economic data from Econoday.com:
