2023 ECONOMIC AND CAPITAL MARKETS OUTLOOK Further complicating the Fed’s efforts to slow the economy, of unemployed sat at six million. It is clearly difficult for outside of some high-profile technology sector layoffs, the employers to find workers and the labor market remains tight, labor market remains strong (Exhibit 20). The Fed is trying meaning that upward pressure on wages will likely continue. to slow down hiring to curb inflation. But rate hikes are That said, one discerning aspect of this cycle is worth pointing not having a notable negative impact on the labor market. out: Labor market overheating has been characterized more The employment report for October showed job growth by excessive job openings than excessive actual employment. in the housing sector, despite rising rates, as well as in In other words, the excess comes from companies seeking manufacturing, despite the rising dollar. to hire workers rather than companies actually hiring them. The former is much easier to unwind than the latter, and In mid-November, the civilian labor force was currently four it corroborates the current scenario of easing inflationary million workers below the pre-pandemic trend (Exhibit 21). pressures with a still-low unemployment rate. That’s a high number considering that the total number Exhibit 20: US unemployment rate remains fairly steady despite tightening monetary conditions… UNEMPLOYMENT RATE % % 16 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 2016 2017 2018 2019 2020 2021 2022 Source: Bureau of Labor Statistics (BLS), Haver Analytics, Apollo Chief Economist. Data as of October 1, 2022. The information herein is provided for educational purposes only and should not be construed as financial or investment advice, nor should any information in this document be relied on when making an investment decision. Opinions and views expressed reflect the current opinions and views of the author(s) and Apollo Analysts as of the date hereof and are subject to change. Please see the end of this document for important disclosure information. 14