The jobs market may be too strong for the stock market, and that is a risk for companies with high labor costs.
Many employment metrics have been at their strongest level in years. The unemployment rate is at 3.8%, an 18-year low, while initial jobless claims are near their lowest levels since the early 1970’s. Goldman Sachs expects the unemployment rate to continue dropping and hit 3.5% by the end of the year. Wage growth, on a 12-month basis, hit 2.7% in May; Goldman expects it to accelerate to a range of 3% to 3.25%.
