Economy
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Markets are settling into holiday mode, with stock futures slightly down on the last full trading day before Christmas. Here’s where things stand today: * Nasdaq-100: +0.37% * S&P 500: +0.04% (flat) * Dow Jones: -0.22% On Friday, the S&P 500 rose 1.1%, recovering
Quantum computing stocks are taking off in 2024. Is this the start of something big? Let’s take a closer look Google’s Chip Changes the Game Google’s new Willow chip, a 105-qubit processor, hit a big milestone: * Fixed Errors: It solved a 30-year problem by cutting down error
Government surveys that track the economy are failing. Budgets are shrinking, people are skipping surveys, and economic data we rely on is becoming less trustworthy. This is a big deal—because when the numbers are wrong, decisions that affect markets, businesses, and everyday life go wrong, too. Here’s what’
The S&P 500 Value Index just dropped 3.7%, marking its longest losing streak on record. Meanwhile, Bitcoin smashed past the $100,000 mark, and the Nasdaq climbed to 20,000. To me, it seems that value stocks have been left in the dust, and investors chasing bigger
Almost $10 billion has poured into Bitcoin ETFs since the US election, pushing Bitcoin past the $100,000 mark for the first time. The momentum is crazy, with Bitcoin posting its best winning streak since 2021. With investors pouring in, knowing the risks are more important than ever. Bitcoin’s
The Federal Reserve is walking on a tightrope, and the stakes couldn’t be higher. If you were the Fed, how would you avoid a recession, while balancing the labor market and taming inflation? I'll break down in this post if the Fed can manage the cooling labor market without triggering a recession, analyzing recent trends and key economic data.
The U.S. labor market is a key indicator for the health of our economy. In recent months, jobs have been slowing down—with the unemployment rate rising to 4.1% in June 2024, up from 3.6% a year ago. Not only that, job vacancies have also dropped a lot, from a high of 7.4% in March 2022 to 4.8% in April 2024. It basically tells us that companies are still hiring, just at a slower pace.
The Federal Reserve's primary goal is to control inflation without causing a significant rise in unemployment. Inflation has decreased from 4% a year ago to 3% in May 2024, approaching the Fed's target of 2%. However, the Fed's challenge lies in maintaining this balance as the labor market cools.
Several Fed officials have noted that companies are more likely to reduce vacancies rather than lay off employees in response to higher interest rates. This trend has been evident as job vacancies have decreased without a corresponding rise in unemployment.
Historically, a rise in unemployment by more than half a percentage point often leads to a recession. This pattern is concerning given our latest increase from 3.6% to 4.1% in June.
There's still mixed signals. Hiring and quitting rates are back to levels seen 10 and 7 years ago, hinting at a turn to stability instead of a downturn. Layoff rates remain low, but that could change if vacancies continue to fall.
Other data I found could signal whether the labor market is stabilizing or heading towards a recession. Job growth data showed an increase of 206,000 jobs in June 2024—matching the average monthly gains in the past year. Although a bit concerning, initial unemployment claims have ticked up, which is an early warning sign of a downturn if the trend continues.
So... the big question.. If I were at the helm of the Federal Reserve, my approach to taming inflation while stabilizing the job market would involve a ton monitoring, and looking at incoming data while adjusting policies minimally.
That said, I'm definitely not fit for the job– after all, I'm just an observer trying to make sense of this rollercoaster. But with the data we have, it seems our economy is handling the Fed's policies relatively well so far. Let's hope it stays that way!