Weak Labor Market, Cheap Stocks
As employment data deteriorates, some firms are looking stronger than others.
For this installment of our quarterly employment Stock Strategist, we'll highlight a few developing macroeconomic data trends, as well as how they're manifesting in our employment coverage universe via operational trends, management commentary, and stock performance. For additional background on the topic, we recommend reading two Stock Strategist articles we wrote earlier this year: Has Employment Peaked? and Our Picks for a Grim Employment Climate.
In last quarter's article, we noted that several important employment data series were flashing yellow, but now it's safe to say they're glowing red. Monthly job losses have become meaningful, the unemployment rate is rising, and more layoffs are in the pipeline as corporate earnings come under pressure. The outlook is not good either: According to the March Survey of Consumers conducted by Reuters and the University of Michigan, just more than half of all consumers expect the employment situation to weaken in the year ahead. At the moment, we see no reason to believe otherwise.
Joel Bloomer does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.