No ‘cracks’ in U.S. strong jobs growth

[Pelican Press 0]

No ‘cracks’ in U.S. strong jobs growth

A “Now Hiring” sign at an Advance Auto Parts store in San Leandro, California, US, on Tuesday, Aug. 15, 2023.

David Paul Morris | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today 

U.S. stocks end mixed
Wall Street ended Friday on a mixed note ahead of a shortened four-day trading week due to the Good Friday holiday. The blue-chip Dow slipped 0.77%, but gained just under 2% for its best week since December, nearing the 40,000 level. The S&P 500 slipped 0.14%, while the Nasdaq Composite rose 0.16% for another record. 

Japan private equity soars
Japan topped the private equity market in Asia Pacific for the first time, with deal value soaring 183% in 2023, Bain & Company said in a report. Overall, total deal value in the region plunged last year to its lowest since 2014 amid a fundraising slowdown. Exits fell 26% year on year to $101 billion in 2023 — 40% of these were via IPOs. 

Automakers ***** China-built EV
A small China-made electric vehicle has global auto makers on edge because of its low cost. The China-built BYD Seagull, a small all-electric hatchback, is priced at just 69,800 yuan (or less than $10,000). This has raised fears that BYD and other ******** rivals could potentially disrupt the global automotive industry, undercutting domestic vehicle prices.

Biden signs spending bill
U.S. President Joe Biden on Saturday signed a $1.2 trillion spending package for government funding until October, ending fears of a shutdown. With a midnight deadline looming, Senate leaders managed to pass the budget deal in a 74-24 vote. “This agreement represents a compromise, which means neither side got everything it wanted,” Biden said in a statement. 

[PRO] Where to invest $1 million? 
What should investors buy if they had a spare $1 million right now? Aaron Benson, portfolio manager at investment bank Baird, said he uses the 60/40 strategy as a good starting point for many of his clients. “We really believe in style diversification and feel that remaining diversified with value and growth stocks ******** prudent,” Benson said.

The bottom line

U.S. jobs growth continues to show remarkable resilience despite increasing signs of layoffs.

The pace of hiring has stayed steady and robust, with President Joe Biden eager to tout this trend since his reelection bid hinges on strong employment.

“Today, America once again has the strongest economy in the world. A record 15 million jobs have been created on my watch,” he said in the 

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, issued by the White House Council of Economic Advisers last week.

“The unemployment rate has been below 4 percent for the longest stretch in over 50 years,” he noted. 

Fed Chair Jerome Powell echoed similar optimism

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, signaling the market is in “good shape.”

“We all monitor the labor market very, very carefully, and I don’t see those cracks today,” Powell said. “We follow all the possible stories that are out there about there being cracks, but the overall picture really is a strong labor market.”

Yet, wage gains could be a thorny issue for the Fed, which is trying to wrestle down inflation.

“Powell did say wages were rising faster than what was consistent with achieving price stability in the past,” Diane Swonk, chief economist at KPMG, 

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“It is still unclear whether those gains are a problem or not. Wait & see — much depends on productivity growth, which is the elixir that allows more rapid wage gains without inflation.”

Any surprises on the horizon will likely throw a wrench in the Fed’s rate-cut plan.

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