RealPeopleGroup/E+ via Getty Images
Blue Putnam
at first glance
- U.S. job openings are off their post-pandemic peak levels and appear to be falling back to pre-pandemic levels.
- The unemployment rate remains below 4%, having only risen a few notches in August, a healthy sign that more people are returning to the labor market.
Although many economists worry that spending could slow in 2024 and lead to a recession, U.S. consumers are in good health.
Analysts worry consumers could be left in limbo as college loan payments resume and millions lose health insurance benefits while states recertify.
Other analysts are concerned about the stickiness of core inflation around 4% and the likelihood that interest rates will remain high for an extended period given the potential lag in monetary policy. These are legitimate concerns that could have a slowing effect on the economy.
But from student loans to high interest rates, these concerns aren’t the main determinant of consumer health. They are overwhelmed by the strength of the U.S. job market.
If people have jobs, then they have money to spend. Maybe the money won’t go as they wish, but having a job is the primary key to personal spending.
The U.S. economy is creating more than 150,000 net new jobs per month, which is at the same level as the average monthly job creation of 169,000 before the outbreak in 2019.
Although the number of job openings has come down from its peak, there are still many more job openings than job losses.
The unemployment rate remains below 4%, having only risen a few notches in August, a healthy sign that more people are returning to the labor force.
Our argument is simple: If more people work each month and wages rise, there is more money to spend each month and consumer spending can continue despite some resistance.
Original post
Editor’s note: Summary highlights for this article were selected by Seeking Alpha editors.
