The latest economic data and analysis certainly run counter to a recent Duke University survey that found more than half of finance executives expect a recession in 2020.
On Tuesday, a new government report said job openings climbed in October and more jobs remain open in the US than there are unemployed people to fill them.
Meanwhile, a new Bank of America analysis predicts that stocks – already at record levels – could soar as 2020 gets underway.
“If Wall Street’s predictions are to be believed, stocks should kick off 2020 with a bang,” reported CNN.
The job market
After hitting an 18-month low the previous month, job openings climbed in October – a sign the job market remains strong.
The Labor Department said Tuesday that the number of available positions rose 3.3% to nearly 7.3 million. That suggests that businesses remain confident enough in the economic outlook to create more jobs.
The figures provide the latest evidence that employers have largely shrugged off the uncertainties surrounding the U.S.-China trade war and slowing global growth. While the number of open jobs has declined from a record high of 7.6 million a year ago, they are still at a historically high level. For nearly a year and a half there have been more job postings than unemployed people.
The figures follow a healthy jobs report earlier this month that showed a surprisingly robust gain of 266,000 jobs while the unemployment rate fell to a 50-year low of 3.5%.
“The numbers should calm worries that employer demand for workers is drying up,” said Julia Pollak, chief economist at ZipRecruiter. “Rather than falling substantially, job openings now appear to have remained fairly stable for over a year.”
The number of Americans who quit their jobs also rose, though that figure remains below the peak reached in July. Quits are a good sign for the economy because most workers quit jobs for new, usually higher-paying, positions. Data compiled by the Atlanta Federal Reserve Bank show that workers who switch jobs are seeing larger wage gains than those who stay. More quits can also push companies to pay more to retain their staffs.
Job openings jumped 125,000 in the retail sector, likely reflecting strong demand for temporary workers for the holiday season. The government seeks to seasonally adjust the data for those fluctuations but isn’t always able to do so perfectly. October’s gain was the largest increase in retail job openings since April 2018.
Manufacturers also posted slightly more open jobs after several months of decline. Finance and insurance firms and health care also posted more available positions.
Wall Street bulls
Bank of America analysts said in a recent note that markets are primed for a “risk asset melt-up” in the first three months of the year. That’s when investors pile into stocks and other risky bets simply because they’re scared to miss out. Call it market FOMO.
“We expect returns to be front-loaded in 2020,” Michael Hartnett, Bank of America’s chief investment strategist, told clients.
Remember: A weight has lifted for investors in recent days following a “phase one” US-China trade deal and greater clarity on Brexit after the UK election. US and European stocks hit record highs again on Monday.
Notably, the MSCI All-World Index, which tracks stocks around the globe, also notched a record Monday. In recent days, the index has reached new highs for the first time since January 2018.
Stocks outside the United States are key to predictions from banks such as JPMorgan in 2020. Its strategists think shares in emerging markets and Europe can trump the S&P 500 next year after lagging behind in 2019.
While assets in Asia continued their ascent on Tuesday, Europe may be losing some steam.
Stumbling block: The pound is down 1%, back near $1.32, on concerns that UK Prime Minister Boris Johnson will only give himself to the end of next year to strike a new trade agreement with the European Union. The self-imposed deadline puts a cliff-edge Brexit back in play.