Dow tumbles on red-hot U.S. job market
News that the job market is strong sent the Dow tumbling, and there is also concern that the Feds may raise interest rates again. Dennis Hoffman, Director of the L. William Seidman Research Institute at Arizona State University’s W.P. Carey School of Business, discussed what’s currently happening with the job market.
“Overall, the unemployment rate is at or near a historical low. So the economy has remained very, very resilient to the onslaught of federal reserve hikes in interest rates. That has really been the interesting thing. Back in December, more economists thought we were going to have a recession this year than at any time in history, by the reports that I read. And where’s the recession? We’re still waiting,” Hoffman said.
Can the job market be too hot?
It’s all about the Fed policy, according to Hoffman.
“What people are hoping is that the Fed can find a way to stop raising interest rates. They’re only going to stop raising interest rates until the economy cools off a little bit. So when you get news that the economy is bubbling along and is a little bit too hot, that means the Fed is going to have to stay on task. That means interest rates are going to continue to go up. Then, of course, Wall Street and potential home buyers or potential car buyers don’t like that,” Hoffman said.
The job market being red hot right now is good in Hoffman’s opinion, if there is a way to somehow pull off a soft landing. If the job market is resilient, stable and continues to add jobs, “we’ll achieve the soft landing, and that’s going to surprise a lot of economists,” Hoffman said.