Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for your money. We’re joined by John Nelson, Financial Planner at NelsonCorp Wealth Management. Welcome back, John.
John Nelson:
Thank you for having me, Brandy.
Brandy Auterson-Hurst:
So, the job market has been incredibly strong for a while now. Is that starting to change?
John Nelson:
Yes, it certainly has, Brandy. You look post-COVID and how far we’ve come, it’s been pretty significant. But if you look at the data underneath a lot of that, we’re starting to see areas of softening. And that’s the graphic, the chart I brought with me today just to illustrate that. This is the six-month percentage change in core payrolls. So what we’re doing here is we’re removing areas like government, healthcare, sectors of that nature to give us a little clearer view of the private sector jobs.
And as the chart illustrates, you can see how we’ve come down pretty sharply the last few years, hovering just above zero. That’s pretty rare because normally we see a job market where it’s either strengthening or weakening. We typically do not see a flat line around zero, but that’s kind of where we have been. And if you look at any sort of material drop below that red zero line, that’s always been accompanied with an economic recession. So, this is a pretty robust signal with a hundred percent success rate over the last 60 years. So, this is definitely something we’re watching closely.
Brandy Auterson-Hurst:
All right, so what does all of that mean for investors?
John Nelson:
Yeah, I think overall, you look at earnings, which drives spending, corporate profits in the market as a whole. The question comes up a lot, are we in somewhat of a bubble? And I think we are, when you look at the AI companies, things of that nature. So, is it a gold rush or more of a sugar rush that fizzles out? Something We’re going to update viewers on as we work forward.