October 17

10/17 - Possibly the only thing standing between the U.S. economy and a serious recession is employment levels. Employers added 236,000 net new jobs in Sept – a great number given how hard it is to find new workers. It’s hard to be in a full-blown recession with a 3.5% unemployment rate. However, inflation is still raging, with the CPI at 8.2% above a year ago in Sept. That just about guarantees the Fed will raise interest rates another ¾ of a percentage point when they meet again in Nov. Average 30-year mortgages hit a 20-year high of 6.92% last week and could be 8% by year’s end. The Conference Board’s probability model predicts a 96% likelihood of a recession in the U.S. within the next 12 months. As this full employment economy limps into Q4, look to the monthly jobs report, and any large layoff notices, as forward indicators of a potential (impending?) recession.