Fisher Investments Reviews Recent Labor Market Trends

Transcript

Ken Fisher:

If you listen to all the chatter on business TV or in print media, there's been this endless discussion throughout the third quarter of 2024 as to the labor market cooling. Is it a sign of a soft landing? Is it a sign of a hard landing? Is it a sign of Godzilla coming to attack us all? Or is it a good thing? The reality is trying to predicate such things and then rippling them back into some kind of market forecast is both backwards and a fool's errand.

The stock market is a leading indicator of the economy, not the other way around. And so the stock market is doing well this year and having done okay, being positive, has told you that the economy ahead is not bad, is good. How long? Probably about a year for the economy.

In that environment, you will regularly or irregularly get employers hiring more aggressively, hiring less aggressively, people coming into the labor force more aggressively, less aggressively. And these numbers bounce around. It is a fool's errand to try to read too much significance into it. It is not predictive.

It does not tell you whether we're going to have recession, which is the implication of a hard landing, or a soft landing. I never actually understood the soft landing jargon, because the reality is the economy has been growing nicely now since Covid— irregularly, but nicely at a moderate rate in a format that is relatively a return to relative normalcy after the extremity of Covid and its aftermath.

But all this hard landing, soft landing nonsense that you hear so much about in media is in and of itself, a fool's errand. The economy's been growing. Employers will react in various ways over time, not always the same. People will move into the labor force and out of the labor force irregularly for social reasons and others. And these data that get presented on a regular basis are mostly a way to mislead yourself.

So to the simple answer, should you get excited about the thought that the labor market in recent months has been cooling? The answer is no. You should not. You should largely not pay attention to it and not let people get you exercised about this. And you get the most exercising on this on TV. And when they start talking about this, I just turn to something much more educational, like an advertisement or a cartoon. Thank you much for listening to me.

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