What Comes After a Soft Landing? More Slowing

Apollo Chief Economist

Since the Fed started raising interest rates, the labor market has gradually softened. 

Specifically, employment growth is slowing, there are fewer job openings, the work week is shorter, the quits rate is lower, and wage growth is declining for job switchers, see charts below.

With the Fed keeping interest rates at these high levels for another nine months, it is unlikely that the lines in these charts will suddenly start moving sideways. 

The likely scenario is that the trends in these charts continue. In short, more weakness in the economic data is coming as Fed hikes bite harder and harder on consumers and firms.

Source: BLS, Haver Analytics, Apollo Chief Economist
Source: BLS, Haver, Apollo Chief Economist
Source: BLS, Haver, Apollo Chief Economist
Source: FRB of Atlanta, Haver, Apollo Chief Economist

Source: BLS, Haver, Apollo Chief Economist

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