Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by Nate Kreinbrink, Financial Planner at NelsonCorp Wealth Management. Welcome back, Nate.
Nate Kreinbrink:
Thanks again for having me.
Brandy Auterson-Hurst:
So there’s been a lot of talk about the job market lately. What does the data tell us about where things stand?
Nate Kreinbrink:
Well, there were a few things earlier this year that did start to create some worries; most notably the rise in the unemployment rate and some announced corporate layoffs. Now, we fast-forward to today and this isn’t necessarily the case, as some of the data that we’ve been tracking has actually shown a positive outlook. Now, the Cleveland Fed has a neat little tool that actually tracks large layoffs and plant closures in real-time, which I think we have a chart here that goes into this a little bit more.
So what we’re looking at here is the WARN factor. This stands for the Worker Adjustment and Retraining Notification. So as you can see on the chart, the factor tends to spike during recessions when companies start laying off more workers, like you can see by that big spike in 2020. We saw a moderate rise last year, but it has kind of since turned the corner a little bit and has now been decreasing rather rapidly coming into 2024 here.
Brandy Auterson-Hurst:
So what does this mean for the average investor?
Nate Kreinbrink:
Well, I think the big takeaway is that we’re seeing a strong labor market; meaning a recession in the near future is a little less likely than maybe what it was earlier this year. This also could be a nice little tailwind for the financial markets. So a strong labor market usually tends to support corporate earnings and consumer spending, which are both key factors in the stock market. And again, we always want to remain cautious with anything that we’re looking at with this. But again, I think the economy has shown that it may be a little more resilient than what some people had maybe feared.
Brandy Auterson-Hurst:
All right. Some great advice there, Nate. Thanks for joining us.
Nate Kreinbrink:
Thanks again.
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