The latest Job Openings and Labor Turnover Survey (JOLTS) data paints a mixed picture of the labor market, with more job openings but fewer hirings. Mizuho Financial Group US chief economist Steven Ricchiuto joins Wealth with Brad Smith to share his outlook for the US economy and labor market during President-elect Donald Trump's return to the White House.
"When you look at the concerns that corporate America had going into the 2024 period with regard to the potential for the Trump tax cuts to be allowed to expire ... there was greater pressure on companies to decide that they needed to hold back on costs in order to grow their earnings," Ricchiuto says.
The economist adds, "Now, as we're going forward with the prospects of a more pro-business-oriented administration with potentially a greater likelihood of additional tax cuts, it takes some of the pressure off companies to control their costs, and therefore, it allows them to potentially go back to expanding their businesses and expanding their employment base."
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"The fact that job openings are starting to climb again ... is an indication of the fact that the transition from a desire to cut costs to an environment now of trying to go for top-line revenue growth is starting to unfold in the economy," Ricchiuto tells Yahoo Finance.
He also notes that these conditions could fuel M&A and investment activity and contribute to above-trend gross domestic product (GDP).
To watch more expert insights and analysis on the latest market action, check out more Wealth here.
This post was written by Naomi Buchanan.