Almost back to pre-pandemic jobs levels, but not in the same places

So… market conditions.

Insider reports on the data released Friday, which added 390,000 non-farm payroll jobs.  That’s above the forecast.     That puts the country on pace to complete the labor market recovery to pre-pandemic levels by the end of July.      Digging into that data, there are significant shifts in where jobs are.     Professional and business services are up 821,000 jobs, but leisure and hospitality are down 1.3 million jobs.   

Another Insider article breaks down some of the trends in the economy – while stocks and tech are down… the economy is quite strong.    The thesis: spending is shifting in the economy, away from goods and into services.    Restaurants, movies, travel – Kayak reports a 22% increase in travel, for example.        And the article notes that tech is not the whole market.

Quoting:

One reason interest rates have risen is that economic growth is more widespread. Instead of a few uniquely positioned companies sucking up most consumer spending, many industries are open and getting a slice of the pie. This broad-based strength is the opposite of what the recessionistas want you to believe. Higher rates also mean that making bets on future returns from high-flying tech companies isn’t as appealing as investing in bread-and-butter companies with strong profits. Why roll the dice on a tech startup when the outlook has improved for a traditional industrial conglomerate?

And, people are spending — actual consumer spending has advanced by 2.6% at an annual rate over the past two quarters. 

There’s a subtlety to this that is why I keep revisiting it.  The temptation is to think the market is experiencing one consistent set of conditions.   It turns out this will be a lot more inconsistent.  IT services companies will straddle the worlds too – living in tech, a market feeling distinct pressures – and bridging that to what customers are experiencing, from consumers and retail to the various served industries.

Which is why we care.    You’ll want to be digging into specific industries as appropriate for you.