Jobs Report Shattered Expectations, Optimism Is Rising, Oil Supply Is Improving
February 10, 2023 | FIRESIDE CHARTS
Total nonfarm payroll employment rose by 517,000 in January, shattering expectations of a weakening job market. The report also showed reversals in areas of incremental weakness that had concerned economists. Strong data may lead to a higher federal funds rate, but it also increases optimism of a soft landing. The oil supply situation is improving. Taking risk has produced outsized reward.
1. The divergence between the household survey and the establishment survey has been an area of concern, but the surveys have converged in recent reports:
Source: Daily Shot 2/6/2023
2. The labor force participation rate also rose:
Source: Daily Shot 2/6/2023
3. The market now expects a peak federal funds rate over 5%, more in line with the fed’s past guidance:
Source: Daily Shot 2/8/2023
4. CFO optimism bottomed halfway through 2022 and has risen ever since:
Source: Grant Thornton Read full article
5. Manufacturing spending is taking over the mantle from residential spending, mitigating the impacts of the weak housing market:
Source: @WSJ Read full article
6. U.S. oil production continues to slowly move higher, although it remains well below past peaks:
Source: Daily Shot 2/9/2023
7. Crude oil stocks are back in their normal range due to rising production and mild winter weather:
Source: Daily Shot 2/9/2023
8. Historically, lower risk assets have produced a higher risk adjusted return, but the opposite has been true in recent years:
Source: FHN Financial
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