Market expert warns the Fed stuck ‘between a rock and a hard place’ as hiring 'frenzy' slows
The Labor Department reported 315,000 added jobs, unemployment grew to 3.7%
Fed is stuck ‘between a rock and a hard place’: Stephanie Pomboy
MacroMavens president Stephanie Pomboy discusses the Fed’s challenge to bring down inflation despite ‘hiring frenzy’ and argues rising employment will ‘slow’ as earnings face pressure.
MacroMavens president Stephanie Pomboy responded to the latest jobs report with a warning that the "hiring frenzy" is likely to slow due to ripple effects caused by the Fed rate hikes trying to "offset" inflationary spending. On "Mornings with Maria" Friday, Pomboy looked to the housing sector as an indicator of the slow-down expected to hit the rest of the economy.
US JOB GROWTH MODERATES IN AUGUST WITH 315,000 ADDED WHILE UNEMPLOYMENT EDGES HIGHER
STEPHANIE POMBOY: And I think the Fed really is between a rock and a hard place because they've got to quash this inflation. And meanwhile, they're being forced to offset stimulus at the fiscal level all the time. And yet Powell seems content to navigate this situation. But I really think that what we're underestimating in general, the markets are underestimating is the impact of the rate increases we've seen already. We're just waiting to see that travel through that pipeline. And again, I hate to keep going back to housing, but because it's the first area to feel the pain, it's a really good window into what we can expect over the next few months. And you've seen 40, 50% declines in new and existing home sales from the peak. And the peak was not even a year ago. So those are stunning declines in activity. And I think you're going to see that across the economy and then especially in corporate profits, which coming back to employment, it's the number one input into hiring. So I confess we do have an anomalous employment situation because of the COVID experience and employers really want to hang on to anyone they can get. So it'll take them longer to let people go. But I think this hiring frenzy is going to slow dramatically as those earnings come under real pressure going forward.
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Experts unpack market response to jobs report
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