Latest / Markets with Megan: A Quick Financial Markets Update / Hiring Gains, Confidence Pains | S3 E144 | 05-08-26

Transcript

Hiring Gains, Confidence Pains | S3 E144 | 05-08-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: The job market is definitely gaining some momentum.
• 0:03
  Megan Horneman: It is Friday, May the 8th, and this is Markets with Megan.
• 0:06
  Megan Horneman: If you like this podcast, subscribe, hit the alarm bell.
• 0:10
  Megan Horneman: You can also share it with your friends, family, colleagues, neighbors, anybody who wants to look at the economic data that's released on a regular basis.
• 0:17
  Megan Horneman: What makes the headlines and what does that mean for your investments?
• 0:21
  Megan Horneman: Well, this morning we received the monthly jobs report, and this is always a very important report, tends to be very have market implications.
• 0:29
  Megan Horneman: And what we saw this morning is that the U.S.
• 0:32
  Megan Horneman: economy added 115,000 jobs last month.
• 0:35
  Megan Horneman: So we now are seeing the best two months in job gains for the U.S.
• 0:39
  Megan Horneman: economy that we've seen since 2024.
• 0:42
  Megan Horneman: Some of the other details are the unemployment rate was unchanged at 4.3%.
• 0:48
  Megan Horneman: Earnings grew 3.6% on a year-over-year basis.
• 0:52
  Megan Horneman: When we look at though, the labor force participation rate, that actually fell to the lowest we've seen since October of 21.
• 1:00
  Megan Horneman: It's fallen for the past five months, and it's been led by those that are 55 and older, so leaving the workforce.
• 1:09
  Megan Horneman: The underemployment rate, or those that are working part-time because they can't find a job for economic reasons, that rose to a year-to-date high.
• 1:17
  Megan Horneman: So that's something to keep an eye on.
• 1:19
  Megan Horneman: The strength that we saw came from healthcare jobs, uh, leisure and hospitality, trade, goods producing.
• 1:26
  Megan Horneman: And what's interesting is construction jobs are coming back as well.
• 1:29
  Megan Horneman: So it was the second consecutive month of gains in the construction jobs.
• 1:33
  Megan Horneman: And we have seen some mixed readings, but some good readings here and there on housing.
• 1:38
  Megan Horneman: So maybe we're getting a bit of the thaw in the housing market from a construction standpoint.
• 1:43
  Megan Horneman: Now, this is um a very interesting report because the labor market is holding up better than some had anticipated.
• 1:50
  Megan Horneman: So, what does this do?
• 1:51
  Megan Horneman: It gives the Fed the ability to not make any changes to interest rate policy.
• 1:55
  Megan Horneman: We don't think they're going to do anything this year.
• 1:57
  Megan Horneman: We're actually leaning towards if inflation continues to be a problem because we're not getting this Middle East conflict wrapped up, then we could possibly see interest rates higher at the end of the year than having to make some adjustment towards the end of the year.
• 2:11
  Megan Horneman: Now, the other things that we saw this morning is that the University of Michigan came out with their consumer confidence report, their monthly report.
• 2:18
  Megan Horneman: And the first reading for the month of May is that confidence made another record low.
• 2:23
  Megan Horneman: So we have a good job market, consumer confidence that continues to make record lows, but yet an economy that's still expanding.
• 2:30
  Megan Horneman: What we look at from the consumer standpoint is that they're just very concerned about the inflation impacts of this war.
• 2:36
  Megan Horneman: What does it mean?
• 2:37
  Megan Horneman: Um, how long are energy prices going to stay this high?
• 2:40
  Megan Horneman: So that's impacting confidence here.
• 2:43
  Megan Horneman: The other thing that we're watching closely is even though earnings are growing 3.6% on a year-v-year basis, headline inflation, the last read that we got at the CPI level was right was rising 3.3%.
• 2:55
  Megan Horneman: So real income here is very weak.
• 2:58
  Megan Horneman: This leaves very little room for error for the consumer.
• 3:00
  Megan Horneman: So we'll keep an eye on that.
• 3:02
  Megan Horneman: But so to wrap it up from this report, it definitely keeps the Fed on hold for the near term.
• 3:07
  Megan Horneman: We think through the the remainder of this year, with a chance we might have to see a rate hike in the fourth quarter.
• 3:13
  Megan Horneman: That's all we have for the this week.
• 3:14
  Megan Horneman: If you want a history of our podcast, you can go to marketswithmegan.fm.
• 3:18
  Megan Horneman: Thank you.