6.2% Labor Market

Utilizing the labor market can help develop entry points for long term investing, as specific points in the labor market can signal current market sentiment from investors. The optimal percentage of unemployment for America is usually between 2 and 4%, so this figure is high however it is misleading. Most people believe that high unemployment will bring the market down, but just look at the past year, the market has done more than recover from the March 2020 crash. The reason for this is because the labor market is not at a tipping point. Yes less people have jobs due to the pandemic, however jobs are not currently scarce. The way people work is changing, and during this turnover there will be high unemployment for a period of years, but if a lot of people aren’t looking for jobs during this change, the labor market is not in trouble. What does this mean for buying? It means this year has been a great time to buy, and the buying period is still going as long as jobs are out there.

– Darnel Shillingford

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