Labor market 101

Good morning. I'm Phil Rosen. Today's newsletter may not include a job offer, but it will give you a better grasp of what to look for in this still-hot labor market.

I'm excited to share this week's conversation with one of the leading experts on jobs and hiring trends.

But before we start — who should I interview next? Let me know in the comments.

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Guy Berger is the principal economist and head of macroeconomics at LinkedIn. This conversation has been lightly edited for length and clarity.?

Phil Rosen: The Fed has been trying to cool the economy for over a year now. How is that showing up in the labor market?

Guy Berger: The decline in hiring is the big story, and I think that's something maybe underappreciated in the sense that we hear about all the layoffs happening. But the biggest driver of the decline in monthly job gains is the hiring slowdown.

This is super normal in most cycles, since turning hiring on and off is a much more reversible thing than having to lay people off and rehire, which is what happened in 2021.?

How has the Fed's policy changed the nature of jobs being offered now??

GB: There's been a rise in short-term contract work. What this suggests is companies, in a period of uncertainty, want more flexibility.

At the same time, while companies go for this flexibility, the job market is still hot enough that the number of people working two or more jobs is particularly elevated, which shows people that want a lot of work are able to get it.

What about the role of AI in the labor market?

GB: Big picture, when non-tech companies start implementing AI in a consistent way to improve their bottom line, and to augment their workers' abilities and make them more productive, it will start to change the nature of jobs.?

That's when this will have a big impact.

Read the full conversation with LinkedIn's top economist.

What do you think of Berger's insights on the labor market? Let me know.

And here are the top stories from markets this week:?

1. Housing is so unaffordable that banks are losing money for each mortgage they finance. It's the first time ever that this trend has emerged, with some providers averaging a $301 loss per loan, recent data shows. This can be chalked up to both climbing loan prices and housing demand.

2. Goldman Sachs ranked the 20 cities where home-price growth is slowing the most. Tighter lending conditions have rocked the real-estate market, and investors and homebuyers are growing concerned about the year ahead. Here's a ranked list of where to look across the US for potential deals.

3. These beaten-down stocks are about to make a big comeback in the upcoming earnings season. The director of equity research at CFRA pointed out that financials have endured a brutal first quarter, but he's eyeing a batch of bank names that could rally. Here are his six favorites.

4. Morningstar's top analysts are eyeing these cheap, defensive stocks right now. The market will struggle as the economy slows to a crawl, but investors can still make smart plays, they said. Here are 10 stocks that Morningstar said are best-positioned for gains in 2023.

5. De-dollarization has started already, but the odds that China's yuan will replace the greenback are low. That's what economist Peter Earle thinks — he said the yuan's chances of becoming the primary global currency are "essentially impossible."

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This newsletter was curated by Phil Rosen.