“Almost Cut My Hair: While markets and policymakers alike have been forced to rely on third- and fourth-tier data during the shutdown-induced data vacuum, they haven’t been completely flying blind. Jobless claims are simply the aggregated total of state-level claims, and fortunately, state governments weren’t shut down. Those claims in addition to a wide array of private sector employment data and commentary confirm what we knew before the shutdown: The labor market continues to cool in linear fashion as we remain stuck in a low-hire, low-fire stasis. Carry On: Speaking of third- and fourth-tier data points, investors were particularly myopically focused on the large uptick in layoff announcements in the latest Challenger Report. Investors are clearly on high alert for any evidence of that linear cooling morphing into a nonlinear acceleration, but the layoff data is third-tier data for good reason. The report poorly tracks actual discharges, but layoffs are a normal part of labor market churn and there’s little confirming evidence that actual layoff activity is spiking materially.”
Morten W. Langer
