Daily Brief: US Jobs Are Firing On All Cylinders, Despite This Post-Apocalyptic Backdrop

Daily Brief: US Jobs Are Firing On All Cylinders, Despite This Post-Apocalyptic Backdrop

about 2 years ago3 mins

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Data out on Friday showed that the US added far more jobs than expected last month, suggesting this post-apocalyptic wasteland has become that much more inhabitable.

What does this mean?

Picture the scene: a super-contagious virus is running riot, businesses are sitting empty, and pale-faced Americans are staying indoors. This isn’t Netflix’s latest big-budget blockbuster: this is January in the US. So the country was bound to add fewer jobs than expected, surely.

Except, it didn’t. In fact, it added 467,000 jobs last month – three times the 150,000 economists were expecting. Plenty of that was down to the leisure and hospitality sector, but transportation and retail posted strong numbers too. Plus, the proportion of people either in work or looking for it rose to 62.2% – the highest since March 2020, and just 1.2% below pre-pandemic levels.

US jobs
Source: The New York Times

Why should I care?

For you personally: You’re rich!

If you have an interview coming up, don’t be afraid to really throw your weight about: all this hiring means companies are paying more for the best and brightest, which might be why the average hourly salary was 5.7% higher last month than the same time last year. Now, it’s true that this will probably come back on you, since it’s only a matter of time before companies raise their prices to maintain their profits. But you’re a baller now, so who cares?

Unemployment rate

The bigger picture: Jobs don’t necessarily mean growth.

These job numbers suggest vaccinations are having the required effect, but the party-poopers over at Goldman Sachs don’t think we’re out the woods yet: they reckon Omicron could prolong supply shortages. They also think the drop-off in government spending and tax support will leave less cash in consumers’ pockets and hit their spending this year. That might be why the investment bank just cut its US economic growth forecast for 2022 from 3.8% to 3.2%.

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Snap And Pinterest Reported Better-Than-Expected Results

Snap image

Snap and Pinterest both reported better-than-expected results late last week, which means the two of them can celebrate their success in style.

What does this mean?

After Meta’s poor showing last week, investors were worried Snap and Pinterest would suffer the same fate. But there was nothing to stress about: Snap’s augmented reality tools – which allow users to try on virtual clothes – attracted advertisers in their droves, helping the company bring in 42% more sales last quarter than the year before. The company even posted its first-ever quarterly profit.

Snap earnings

Pinterest’s sales, meanwhile, were up 20%, with retailers spending more on advertising over the holidays. And it one-upped Snap’s inaugural quarterly profit too, boasting its first-ever profitable year. But that’s as far as they differ: both companies gave positive revenue outlooks for this quarter – albeit with caveats…

Why should I care?

For markets: Moving on from Meta.

Snap and Pinterest do have obstacles ahead: they said Apple’s privacy settings – which make it harder to target users with relevant ads – could keep putting advertisers off, while Snap thinks supply shortages could hit marketing budgets. But investors still seem to think they’re a less complicated alternative to Meta, and sent their stocks up 52% and 28% after the update. And the platforms seem to have given them confidence that Twitter will do well when it reports next week too, which might be why they also sent its stock up 10%.

Snap stock
Source: The Wall Street Journal

The bigger picture: Older, not wiser.

Another caveat: Snap is still worried about TikTok, which is doing a bang-up job of stealing users’ coveted attention span. That could force the company – and the likes of Meta, which has likewise cited TikTok as a concern – to innovate, if not just copy the format. It’s worked for Alphabet, after all: YouTube’s “Shorts” – launched in 2020 – just passed 5 trillion views last month.

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