MyStratWeekly – January 30th 2024

Topic of the week: On labor hoarding

• The US labor market is tight by most measures;
• US businesses have been reluctant to fire workers fearing difficulties and costs to rehire, a practice known as labor hoarding;
• The Okun’s law framework helps to identify subpar responses of unemployment to slower growth;
• Low readings on initial jobless claims and layoff announcements show the extent of firms’ reluctance to let go workers;
• Besides hiring costs, reasons for labor hoarding include retaining key hard and soft skills including IT capabilities, time management and leadership.

Market review: Summer in April?

• The ECB fails to convince markets betting on April cuts;
• US growth remains strong at 3.3% in 4Q 2023;
• Yield curves re-steepen;
• Good performance from equities and credit.

Zouhoure Bousbih's and Aline Goupil-Raguénès' podcast

• Topic of the week : Growth, inflation in the Eurozone and ECB ;
• Theme : End of BTFP, China, Energy…

Chart of the week

In China, the price of lithium carbonate used for electric batteries fell by more than 80% year-on-year, returning to the lowest since 2020, at $13,300 per tonne in mid-January, compared to $72,000 per tonne a year ago and peaking at almost $80,000 at the end of November 2022.

This is linked to the lesser demand of the world's largest electric vehicle market: China. After increasing by 84% in 2022, sales of electric vehicles have slowed significantly to increase by 25% in 2023. This sharp drop in lithium prices has led some producers to scale back their production expansion plans.