Lede

The US jobs report was released on a holiday Friday, and investors are closely analyzing the details of the report as the labor market remains resilient but the economy is cooling.

Summary

• March's jobs report shows that hiring remains robust but at a slower pace than in previous months with the US economy adding 236,000 jobs, while the unemployment rate stands at 3.5%.
• Wages increased by 0.3% on the month and 4.2% from a year ago, moving closer to what Fed policymakers believe to be in line with stable wage and inflation expectations, creating a strategic pause in Fed efforts to restore price stability.
• The labor market is cooling, but not rapidly or significantly, and further rate hikes can’t be ruled out.
• Wall Street is beginning to see bad news as bad news, and a slowing economy could mean a recession is forthcoming.
• Commercial real estate has hit a wall as office and retail property valuations have been falling since the pandemic brought about lower occupancy rates and changes in where people work and how they shop.
• Lending to commercial real estate developers and managers largely comes from small and mid-sized banks, where the pressure on liquidity has been most severe, and banking stress will likely add to those woes.
• Tech stocks have held up well in 2023, and the recent spate of layoffs in Big Tech has significant cost-cutting underway in the Valley, leading to a green light for tech stocks.