The US labor market was recently described as "low-hire, low-fire" (Yahoo), meaning that while unemployment is low, there are few new job openings per individual unemployed.
It’s the “meh” of employment records. The troubled friend who replies to “How are you?” with “Things could be worse.”
Unemployment is at 4.1%—virtually unchanged from recent months—but this is a double-edged sword. On the one hand, it's a sign of stability, and on the other, it's a possible canary in the coal mine, portending a cooled economy, with little risk taken by employers and employees alike.
While the healthcare and government sectors continue to add jobs, this is not the best metric for measuring the economy's overall health. The labor force participation rate still trails behind pre-pandemic levels (US Chamber), and the forthcoming Department of Government Efficiency (DOGE) headed by Elon Musk and Vivek Ramaswamy might soon demonstrate the overall precarity of the US labor market. The market may soon be flooded with former government workers at a time when few in the private sector are hiring.
With a new administration on the horizon, the best way to describe the market today is to say it is at a crossroads. The stock market is betting heavily on a returning President Trump, which will directly impact capital raising and loan disbursement for new projects and start-ups. Consumer confidence rose in November, and Black Friday spending grew 10%, mainly due to online sales. Perhaps these are signs of a revival of the dynamism of yesteryear and the death of "day-to-day." Time will tell.
In the end, Americans are adapting, as always, to new norms. In the great words of Warren Buffet, “For 240 years, it's been a terrible mistake to bet against America.” Let’s see what the new year has in store.
-Myron