Jesse Wheeler economic analyst at Morning Consult joined Cheddar News to discuss the recent loss of jobs in the retail sector. 

Jesse Wheeler economic analyst at Morning Consult joined Cheddar News to discuss the recent loss of jobs in the retail sector. “The labor market is still humming along, job growth remains strong, There are still a lot of open positions. Unemployment is low, and pretty much anyone who wants a job can get one for most people.”

Retail Market Sees Job Decline but Overall Employment Is Strong

I do want to bring in, Jesse wheeler economic analyst at morning consult to discuss all of this data, jesse welcome. What do you make of the report? What's it up to you? Yeah, thanks for having me on. And exactly as you said, this was a real kind of upward surprise and not something that policymakers at the Federal Reserve would want to see 263,000 jobs created last month. You know, while it's a slowdown from earlier this year or last year, it's still, you know, a very strong jobs report and shows that the, you know, the labor market remains very resilient, I'd say the big thing to take away here. Um and probably, you know, what might be most worrying for policymakers in the face is that that wage growth um you know, really take higher and they also upper revised the wage growth figures for the last two months. Now, what does this tell us about the overall health of the labor market? And do these give us any indication of how close to a potential recession that we are if you look just at the labor market? Um we're nowhere near recession. Um You know, despite all the headwinds from inflation geopolitical concerns. Um and this aggressive tightening cycle from the Federal Reserve, um the labor market still humming along job growth remains strong, There's still a lot of open positions, um unemployment is low and pretty much anyone who wants a job can, can get one for most people. We did hear from Fed Chair Jerome Powell earlier this week and he hinted that we might see some smaller rate hikes going forward with that 50 basis-point rate hike widely priced into the market expected at this point, but would you say today's jobs report changes the Fed's calculus at all? I would think that it might, um, this jobs report did not, you know, show the things that, you know, Chairman Powell and the rest of the FOMC board would have been hoping to see. Um and I already talked about that wage growth number. Um, it was a 6.8% annual rate, which would be way above that level, that that policymakers want to see that would be consistent with, you know, bringing that inflation level back down. Um to target. Now, interestingly, as we head into this crucial holiday season, we actually saw the retail sector losing about 30,000 jobs. What do you make of the state of that sector? And do you think it will bounce back as we had deeper into holiday shopping season? Despite consumer sentiment, you know, being very low, you know, something we're tracking very closely here at morning consult consumer spending has been surprisingly resilient. There are some questions about how sustainable this is because it appears that a lot of that is coming from, you know, savings drawdowns, You know, we're seeing a savings rate at some of the lowest levels we've seen in a very long time, increased credit card usage and buy now pay later. Um, but you know, as a toenail, consumer spending is still still quite strong. Um So we maybe we haven't seen as many retail sectors as we might have expected otherwise. Um So I'd say consumer spending remains quite strong, but they're facing a lot of headwinds and we expect it to slow maybe in the next year would put some more downward pressure on those retail sector jobs. Yeah jesse. And of course we're continuing to see headlines of mass layoffs, especially in tech with the pullback on digital ad spending. What do you make of the state of tech? And do you anticipate even more layoffs this month or early next year, despite all these, you know, headline grabbing announcements of huge layoffs in the tech sector. Um You know, we're not seeing this pass through to the broader labor market and you know, according to morning consult data where we track the share of U.S. workers who reported lost payer income. Um the it ticked higher at the beginning of the year in the tech sector and again in September however, it's already starting to pass back down. So we think that, you know, one these tech layoffs which represent a relatively small share of the economy overall, roughly 7%. Um You know, we'll have a muted impact on the broader economy. And then, but the big question here is, you know, whether or not that kind of excessive hiring and this wave of layoffs, um you know, represents a larger problem in the economy and whether we'll see it start to pass through to to other sectors. We talked about tech and we talked about retail where we saw some losses here, but let's talk about some sectors that seem to be doing well. We saw huge gains and private service providing jobs, goods, producing jobs and construction. Why are these industries faring so well at this point? Um you know, this is uh this is an interesting question, especially in the construction sector. Um you know, we've seen some slow down and, you know, especially residential construction as the as the mortgage, um, you know, as as interest rate hikes pass through the mortgages, which put down pressure on housing and prices and people, you know, kind of, you know, construction, residential builders start to pull back a little bit um and construction is also, you know, famously seasonal, um you know, going into the winter season. So, you know, that would be, you'd be expected to see some pullback in in jobs there. So, you know, we're this really kind of funny moment with the seasonality here as well. So, um I'd say that overall that, you know, construction especially rains, um you know, surprisingly robust holding up despite what would you expect to see and you know, this slowdown in residential construction jesse, thank you so much for your insight this morning, that's jesse wheeler economic analyst at morning consult