February 4, 2023 | Labor Market, Jobs Report, Tailored Shareholder Reports, Super Bowl Streaming & Tax Planning with the new RMD Age

Labor Market

Even with all the negative headlines, the labor market data remains resilient. The recent JOLTs report for December showed job openings increased 572,000 to a 5-month high of 11 million. This easily surpassed the estimate of 10.25 million openings and would mean there are 1.9 job openings for every available worker. Quits continued to remain elevated at 4.1 million. This is down from the peak in 2021, but if you look at the chart below you will see prior to Covid we hadn't seen a quits level above 4 million. Layoffs did climb slightly in the month to 1.5 million, but looking at the pre-Covid levels we are still below historical norms. I would continue to say we will see a reversion to normalcy rather than a crisis.

 

Jobs Report

The jobs report was impressive to say the least. Headline payrolls for January increased 517,000, which blew past the estimate of 187,000 and comes on top of upward revisions to November and December which netted a gain of 71,000. The household survey showed an even larger gain at 894,000 and produced an unemployment rate of 3.4%, which was the lowest level since May 1969. Job gains occurred in every major sector with leisure and hospitality leading the way with an addition of 128,000 jobs, professional and business services added 82,000 jobs, government added 74,000 helped by the end of a strike from university workers, and healthcare rose by 58,000 jobs. The leisure and hospitality sector are now just 2.9% or 495,000 jobs below is February 2020 pre-pandemic level. Wage inflation was also reasonable with a 4.4% gain compared to last year. This was a deceleration compared to December's gain of 4.6%. The only major negatives I see are the participation rate and employment to population rate as they both remain below pre-pandemic levels. The participation rate came in at 62.4% vs 63.3% pre-pandemic and the employment to population rate was 60.2% vs 61.1% pre-pandemic. Overall, I'd say this was a very strong report and it continues to provide data that makes me believe we will not have a major recession.

 

Tailored Shareholder Reports

Usually new regulation complicates the issue rather than clarifies it for the consumer. Recently, the SEC came out with a final rule called Tailored Shareholder Reports (TSR) which deals with mutual funds and exchange traded funds (ETFs). What I like about the rule is it mandates a 2-3-page document that will outline a fund's performance and fees, and give a brief summary along with some other information using plain English and charts. For those that invest in mutual funds and ETFs, this could be a good tool for comparison where to invest. If you’re working with a broker who is putting your investments into mutual funds, or ETF’s I’d recommend asking for the TSR on the investments they are putting you in or recommending.

 

Super Bowl Streaming

The Super Bowl is now less than two weeks away and if you cut your cord from cable, you may have problems watching the Super Bowl. Last year it was easy because NBC carried the game, and you could simply switch over to Peacock and pay their $9.99/month subscription to watch the game. This year the big game is on Fox, and they don’t have a streaming service. You may have to look into sites like Hulu Plus, YouTube TV, or Sling TV. These are just a few suggestions but be prepared to pay more than $9.99/month. One other option you do have is good old rabbit ears antennas, which actually have advanced pretty well over the years. Fox still broadcasts over the air so that may be a free alternative. I’d start thinking about this soon, if you wait until Super Bowl Sunday morning, you may be running around to your neighbor's house to try to catch the big game.

 

Harrison – “Tax planning with the new RMD age”