The Bipolar Economy Of 2023
Published Friday, February 3, 2023 at: 8:20 PM EST
Maybe it’s a sign of the times: The economy is bipolar. The new jobs numbers released Friday morning showed extraordinary strength in the job market and the index of leading economic indicators in January, released Thursday morning, experienced a decline for the eighth straight month, signaling a recession is coming in 2023.
Despite significant bad news in the form of yet another bad month for the LEI in January and experiencing a sharp decline of eight-tenths of 1%, the explosive number of new job figures for January make a recession unlikely.
New job formation was expected to trend lower in January. Due to the aggressive monetary tightening implemented since March 2022 by the Federal Reserve, the economy was expected to create about 200,000 new jobs. Instead, job gains in January came in at 517,000 and the unemployment rate declined to the lowest level in decades.
The Standard & Poor’s 500 stock index closed Friday at 4,136.48 down -1.04% from Thursday, and up +1.62% from a week ago. The index is up +84.88 from the March 23, 2020 Covid pandemic bear-market low. The S&P 500 remains in a bear market that began June 13, 2022. Since a low point at the end of October, stocks have cut their losses in half, closing the week -13.76% lower than its January 3, 2022, all-time high.
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