Reports

SVET Reports

Friday's Markets Update (December 8, 2023)

On Friday, the Nasdaq rose, but other equities fluctuated as investors assessed the sudden drop in the jobless rate to 3.7% and a surge in consumer sentiment, while inflation expectations dipped. Meanwhile, BTC and ETH continue to hold below $44K and $2.4K, respectively, outperformed by leading altcoins, including ADA, SOL, MATIC, and DOT.

Details

The University of Michigan's consumer confidence soared to 69.4 in December, outperforming expectations due to lower near-term inflation forecasts, reaching the highest point since August and significantly rebounding from June 2022's record low.

In November, the unemployment rate dropped to 3.7% from 3.9%, outperforming market expectations. Unemployed persons decreased by 215K, while employed individuals increased by 757K.

Comment

The latest BLS report, revealing a drop in the unemployment rate from 3.9 to 3.7 percent, is certainly unexpected and raises questions about the dynamics of the current job market. The contrast with previous data from JOLTs, Challenger, and ADP reports prompts a closer examination of the underlying factors.

A detailed analysis of the government data suggests interesting trends among various worker groups. Notably, the unemployment rate for teenagers decreased to 11.4 percent in November. Simultaneously, the jobless rates for adult men, adult women, Whites, Blacks, Asians, and Hispanics remained relatively stable. This nuanced pattern prompts speculation that employers might be adapting to the escalating costs of doing business, potentially induced by FED policies, by favoring the recruitment of younger workers who may command lower wages.

Furthermore, a deeper dive into industrial analysis indicates a noteworthy rise in employment within the health care and government sectors, while other industries, with the exception of hospitality, exhibit mostly flat employment figures. This leads to the hypothesis that increased government spending could be a driving force behind the employment spike. If this holds true, it implies that the government is emerging as a major contributor to inflation at both executive and FED levels.

The reliability of government data has become a topic of scrutiny among a growing number of analysts. As we navigate these nuances, it is crucial to monitor the evolving job market dynamics and their potential implications for broader economic trends.

The week 50 focuses on the Fed's interest rate decision, inflation data, and retail sales. Oversees investors will monitor global monetary policies, Germany's ZEW index, Japan's Tankan index, and flash PMIs, while China highlights retail sales and other economic indicators.