By Murray Gunn | Global Rates & Money Flows editor
I have spent much of my career among professional traders. By nature, traders are a betting crowd; if they can’t bet on the markets, they’ll bet on something else.
A monthly highlight on trading floors was always the ‘NFP Sweepstake,’ where everyone would pay some money to guess what the U.S. Non-Farm Payroll (NFP) number would be. The winner, who would take the whole pot, was the guess that came closest to the actual number. A good strategy, therefore, would be to try and be either the highest or lowest number because, sometimes, NFPs do surprise.
That was the case last month when NFPs came in showing that 272,000 jobs were added in May compared with a consensus forecast of 185,000. Momentum in the U.S. labor market is waning, though. From January 2021 to December 2022 the average NFP number was 490,000 jobs added each month. From January 2023, the monthly average has halved to 241,000. The unemployment rate has increased from 3.4% in April 2023 to 4.1% now and jobless claims are rising.
The chart above shows annualized percentage change in those in the U.S. engaged in full-time employment. Full-time employment has been shrinking on an annualized basis since February this year, and you can see that every one of the eight recessions (the shaded areas on the chart) since 1970 has been accompanied by a negative reading. On three occasions, this metric has dipped into negative territory without a recession occurring.
I’m no expert bookie, but it seems to me that those odds tilt towards favoring a recession. What do you think?
Free Reports:
Sign Up for Our Stock Market Newsletter – Get updated on News, Charts & Rankings of Public Companies when you join our Stocks Newsletter
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
The U.S. jobs market remains the most important economic variable on the planet given the importance of the U.S. consumer to economic activity. Regardless of where in the world you live or invest, staying ahead of the trends in the U.S. stock market and economy is worth your while. Elliott Wave International has a free must-read issue on U.S stocks that I suggest you check out, on www.elliottwave.com.
![investmacro stock market newsletter](https://investmacro.com/wp-content/uploads/2022/10/bot_ad_stox.png)
- COT Metals Charts: Speculator Bets led by Steel & Palladium Sep 7, 2024
- COT Bonds Charts: Speculators raised their Fed Funds and SOFR 3-Months bets this week Sep 7, 2024
- COT Soft Commodities Charts: Speculator Bets led higher by Corn & Sugar Sep 7, 2024
- COT Stock Market Charts: Speculator Bets led by S&P500 & Russell Minis Sep 7, 2024
- Week Ahead: USDInd faces triple risk cocktail Sep 6, 2024
- Gold rallies as market bets on rapid Fed monetary easing Sep 6, 2024
- The Analytical Overview of the Main Currency Pairs on The Bank of Canada cut the rate by 0.25%. Oil continues to fall in price Sep 5, 2024
- EUR/USD Maintains Neutral Stance Ahead of US Employment Data Sep 5, 2024
- USDCAD: Tests resistance ahead of BoC decision Sep 4, 2024
- Oil fell to the lowest level of the year. Stock indices are under pressure from weak economic data Sep 4, 2024