May 6, 2022, 12:13 pm EDT
Strong Job Markets But Bearish Response from the Stock Markets
Is better-than-expected April job reports good news to the stock market? Not necessary.
“Total nonfarm payroll employment increased by 428,000 in April and the unemployment rate
was unchanged at 3.6 percent, the U.S. Bureau of Labor Statistics reported today. Job
growth was widespread, led by gains in leisure and hospitality, in manufacturing, and in
transportation and warehousing.” —US Burear of Labor Statistics
The number itself 428K new jobs is definitely strong. Nearly record low unemployment rate 3.6% means most people who want to find a job can get a job. However, those data are from the past. The past is important but the future is the key for investors.
Negative -1.4% GDP in Q1 2022 shows us the weakness in the economic condition that does not reflect on the job market yet. Tumbling stock performance from many big names like Amazon (AMZN), and Netflix (NFLX) are signs of trouble. Not only do we need to look back mirror to see the history, but looking ahead is even more critical for the coming difficulties so that we can prepare for it.