Interview on Jobs and Markets
CNN International | Jan 13, 2020

First, the good news! We’ve had 10 straight years of job gains with the 2010s seeing over 22 million jobs added – the most of any decade – and the jobless rate is at a 50-year low.

But in 2019 employers added 600K less jobs than in 2018.

That slower jobs growth is consistent with the slowing economy that ECRI predicted, and yoy nonfarm payroll job growth has now fallen to a 2¼-year low – just a hair’s breadth from a 7¼-year low.

Also, despite the jobless rate staying at a 50-year low, wage growth has declined to an almost 1½-year low because growth in total pay is falling faster than growth in total hours worked. And growth in total hours worked itself has slowed to its weakest reading since 2010.

Unless this trend changes direction – even though a recession isn’t imminent – you cannot take recession risk off the table for all of 2020.

What about markets at new highs?

Indeed, even though, with the economy slowing, earnings growth has fallen to near zero.

The obvious thing that has happened to support the markets is that central bank rate cuts around the world have been more widespread than at any time since the global financial crisis. And with the U.S. Federal Reserve once again rapidly expanding its balance sheet, it is essentially monetizing the trillion dollar U.S. budget deficit.

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