What This Week’s Jobs Reports Could Tell Us About the State of the Consumer
Mar 3, 2024
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This podcast discusses the significance of upcoming jobs reports, market anticipation, and consumer behavior insights from experts. They also explore how retail giants like Target and Costco are adapting to consumer trends and how the upcoming U.S. presidential election may impact market strategies.
Analyzing details like part-time vs. full-time employment is crucial in understanding labor market complexities.
Consumer behavior trends suggest a shift towards spending on essential items over discretionary ones due to inflation.
Deep dives
Economic Indicators and Labor Market Trends
The S&P 500 has shown significant growth in stock prices, with the labor market also indicating positive signs with the addition of over 350,000 jobs last month. However, concerns arise due to inflation surpassing the Fed's target and weaknesses in durable goods and retail sales reports. Analysts Liz Ann Saunders and Kathy Jones highlight the complexities of the labor market beyond surface-level data, emphasizing the importance of scrutinizing details like part-time versus full-time employment.
Retail Sector Insights and Consumer Behavior
Target and Costco's earnings reports provide insights into consumer spending patterns. While Target has faced challenges, like a decline in revenue but increased profits, Costco has outperformed, with its stock doubling returns compared to the S&P 500. Analysts discuss consumer behavior shifts, indicating a trend of spending on essential items over discretionary ones amid inflation, impacting retail sales dynamics.
Political Landscape and Market Implications
As the U.S. presidential election nears, market analysts consider the potential impact of candidate policies on economic stability. Speculation surrounds themes like geopolitical tensions and economic growth under different leadership scenarios, particularly focusing on the market response to policy changes and international relations. With key events like Super Tuesday shaping future market dynamics, investors closely monitor political developments for signals on market direction.
This week, we’re expecting the JOLTS and nonfarm payrolls reports. With inflation still holding above the Fed’s target and some weakness in the latest durable goods and retail sales reports, February’s nonfarm payrolls report will carry some extra weight. Charles Schwab’s chief investment strategist, Liz Ann Sonders and their chief fixed income strategist, Kathy Jones, join us for a discussion about how the market is anticipating these reports, especially the jobs report– which will be the week's marquee data point. We’ll also be looking to see what these reports tell us about the state of the consumer. Then, ahead of Target and Costco’s earnings results, WSJ reporter Sarah Nassauer joins to talk about how those reports may show us how shoppers are balancing wants and needs. And with Super Tuesday fast approaching we’ll hear from Sam Stovall, chief investment strategist at CFRA Research, about how this election can move the markets and what the likely presidential rematch between Donald Trump and Joe Biden means for investors.