The Labor Report Everyone's Missing—but Shouldn't

Hello everyone! I hope you all had a fantastic Thanksgiving and were able to spend quality time with your loved ones. It's incredible how fast this year has flown by—we're already in the final stretch of 2024! As we wrap up the year, let's stay focused and make the most of the rest of the year!

Now let’s dive in!

Read time: ~4 minutes

Rates ended LOWER compared to last week, and volatility was HIGH. Rates are in the high 6’s low 7’s for most loan types without paying discount points. Paying discount points can get you in the mid 6’s.

Unpacking the Latest Trends in the U.S. Labor Market 👷‍♂️👷‍♀️

The first week of the month always brings a flurry of important labor market data, including three major reports and culminating with the Bureau of Labor Statistics' Non-Farm Payroll Report on the first Friday. This upcoming report is particularly noteworthy as it's the first one post-election.

So, what are my team and I seeing in the labor market right now 👀?

1️⃣ Election's Impact on Jobs:

While we're glad the election season is over, its impact on employment could be significant. Before the election, the U.S. economy saw an increase of 112,000 government jobs at federal, state, and local levels, largely due to campaign-related efforts. These temporary jobs boosted the Non-Farm Payroll figures. Now that the election is behind us, the question is: what will happen as those jobs are phased out?

2️⃣ Signs of a Softening Job Market:

We've noticed that continuing jobless claims are ticking upward, indicating a softening job market—not a collapsing one. We're keeping a close eye on this trend, but so far, there are no alarming signs pointing to a major downturn.

An interesting recession indicator is the ratio of continued unemployment claims to the total civilian labor force. Currently, we're at a ratio of 1.102%, just slightly above the all-time low of 0.825% in June 2022. This suggests we have some buffer before reaching a critical point, which is reassuring.

3️⃣ The Underappreciated QCEW Data:

The real gem in labor statistics is the Quarterly Census of Employment and Wages (QCEW). Released in late November, this data compiles nearly all U.S. employer tax filings, offering a more accurate snapshot of job growth.

The most recent QCEW data indicates that from June 2023 to June 2024, only 1.246 million jobs were created—significantly less than the 2.5 million jobs initially reported by the BLS. That's an average miss of about 100,000 jobs per month!

While the BLS Non-Farm Payroll numbers tend to dominate headlines, they are essentially estimates—more of an art than a precise science. Meanwhile, the more accurate QCEW data often flies under the radar. Don't take my word for it; try Googling "QCEW" and see how little coverage it gets.

As shifts in the labor market continue, these discrepancies will be key to truly understanding where the economy is headed. Stay tuned— I will keep you updated. 💡

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Two Ways My Team & I Can Help

1. Lets collaborate- Schedule a zoom meeting

2. Tough Deal? Let us know if we can help