Odd Lots Lots More on the Growing Risks to the US Labor Market
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Feb 28, 2025 In this discussion, Jon Turek, founder and CEO of JST Advisors, shares his expertise on the current state of the US labor market and its increasing vulnerabilities. He highlights concerning trends, including a decline in sectors adding jobs and struggles within the housing market. Turek also delves into the implications of government efficiency and fiscal conditions that may hinder employment growth, cautions about the risks of an economic slowdown, and stresses the importance of monitoring these developments closely.
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Shifting Policy Impact
- The market has adjusted to a more mixed policy impulse, impacting the 10-year yield.
- This shift is due to the two-sided nature of policy, including tax cuts and tariff uncertainty.
Labor Market Vulnerability
- The labor market is in a decent equilibrium with stable unemployment and respectable payroll growth.
- However, a low hiring rate makes the market vulnerable to shocks, potentially leading to quicker unemployment spikes.
Stocks, Bonds, and Tariffs
- Hints of the inverse correlation between stocks and treasuries are reemerging.
- However, the impact of tariffs on inflation and price setting behavior remains uncertain.