The stock market’s wild gyrations in recent weeks have led some to assert the U.S. is on the verge of a recession. A recession would be important to the bev/al industry in the U.S. because, contrary to popular belief, when the economy stumbles, the U.S. bev/al industry also stumbles.
It’s important to remember the stock market doesn’t necessarily reflect the U.S. economy. In fact, in recent years, it has become increasingly disconnected from the U.S. economy because of globalization and because of high-speed program trading.
The jobs report released Friday (1/4) “was strong across the board,” the Conference Board noted. The U.S. economy added 312,000 jobs in December, and with upward revisions to previous months, there are no signs of any slowdown in job growth, it added. Wages are continuing to accelerate, with average hourly earnings growing at an annual rate of 3.2% in the past 12 months and 3.7% in the past six months. The tight labor market and rapid wage growth are bringing more people back to the labor force, leading this month to an increase in the unemployment rate.
At least through the middle of December (when the employment numbers were collected), there were no signs employers are slowing down at all, the Conference Board said, adding:
“While we do expect some slowdown in the U.S. economy and labor market, this jobs report should boost confidence in the U.S. economy. Together with strong wage growth, it suggests that markets are probably underestimating the number of times the Federal Reserve will increase interest rates in 2019. We expect two rate hikes during 2019.”