So much for an impending recession! Today’s official jobs report solidly confirmed that the U.S. economy is not on the brink of a recession. Rather, it seems to be in the early innings of a powerful recovery.
As such, we think this strong data sets the stage for a powerful stock rally in the final three months of the year.
In fact, I cannot emphasize enough how impressive and important I think this jobs report actually was…
Many economists and market observers were worried that the U.S. economy was at risk of falling into a recession due to a weakening labor market. After all, the last few jobs reports have been feeble.
But so many data points in today’s report dispelled those fears.
Let’s get into it.
The Jobs Report Stand-Outs
From head to toe, September’s jobs report was strong – exceptionally strong:
- Huge job growth. The U.S. economy added 254,000 jobs last month, much higher than expected and the biggest monthly job growth number since March 2024.
- Major positive revisions. July and August job growth numbers were revised higher by a very meaningful 74,000. So, the U.S. economy didn’t just add far more jobs than expected in September. Revisions show that the economy added far more jobs than we initially thought in July and August, too.
- Private sector power. Private payrolls increased by 223,000, far higher than expected and also the biggest monthly job growth number since March 2024. This highlights the fact that this recovery is not just being driven by government hiring. It is a private sector recovery.
- Falling unemployment. Last month, the unemployment rate fell from 4.2% to 4.1%, marking its second consecutive monthly drop. We find that very interesting because unemployment rates tend not to drop in back-to-back months unless the labor market is in full-on recovery mode. In fact, during the 2008 financial crisis, dot-com crash, and early 1990s recession, the unemployment rate never declined for two straight months until unemployment topped out – in summer 2010, summer 2003, and summer 1992, respectively. Yet… it just did, suggesting the labor market is already in recovery mode.
- Rising wages. Average hourly earnings rose 4% year-over-year, better than expected and up from the previous month’s 3.9% gain. Real-time estimates for September inflation are around 2.2%. That means that last month, wage growth outpaced inflation yet again – for the sixteenth straight month. Moreover, using those estimates, real wage growth was 1.8% in September, its highest since March 2021.
Indeed, this latest report was strong enough to almost entirely dispel most recession fears, replacing them with hopes for a recovery.
That’s why we believe this data sets the stage for stocks to keep on rallying for the rest of the year.
The Sector That Could Drive Hefty Market Gains
For all intents and purposes, we have essentially entered the ‘holiday season.’ This is typically a very good time for stocks.
And now with recession fears turning into recovery hopes, we think a very strong holiday season could be in store for the stock market.
But, of course, to capitalize on the biggest gains this holiday rally will offer, you need to buy the right stocks.
And I think that autonomous vehicle stocks will be among the biggest winners on Wall Street this holiday season…
Because self-driving cars are now starting to show up on roads across the country.
Phoenix, Los Angeles, San Francisco, Austin, Atlanta – all are places where autonomous vehicles are either already on the roads or will be by early 2025.
And they’re quite good.
For instance, I live in Phoenix, Ariz. Just two nights ago, we had friends in town and decided to take them to dinner. So, we called a self-driving Waymo. It picked us up at our house, drove us to the restaurant, and dropped us off at the valet (which included a busy roundabout, yet the car had no problems).
It was a great ride. So, we took one back home, too – another great ride.
Folks, it appears the future of transportation has arrived.
The Final Word
This autonomous future could be accelerated next week, when Elon Musk – the world’s richest man and one of the most visible businesspeople of our time – reveals his decade-in-the-making self-driving project: the Tesla Robotaxi.
I think that highly anticipated launch could be the catalyst that sets an unstoppable ‘Autonomous Vehicle Revolution’ in motion – one that dramatically reshapes our world over the next few years.
And it could all start next week.
That’s why, ahead of Musk’s Robotaxi reveal, I’m hosting my own special event on Monday, Oct 7 at 10 a.m. Eastern to help folks get prepared for this seismic shift in transportation.
This briefing is centered around Robotaxi’s launch… But it’s about so much more than Elon Musk, Tesla, or Robotaxi.
It is about the groundbreaking potential of the ‘Age of AVs’ – and, more importantly, how to potentially profit from it.
That includes my playbook on the best AV stocks to buy right now.
Reserve your seat to that event now and get positioned for gains in this new era.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
P.S. You can stay up to speed with Luke’s latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.