March Jobs Report: Labor market is still okay, economist says

The U.S. economy added 236,000 jobs in March showing payroll growth moderate. This comes after ISM Manufacturing and ADP Private Payroll numbers came in worse than Wall Street was expecting for the month.

While some economic data may show the U.S. is in a recession, the impressive thing is “the labor market is still doing okay,” Apollo Global Management Chief Economist Torsten Slok told Yahoo Finance Live.

If there’s a tightening in credit conditions, Slok adds that the economic slowdown could “come a bit harder and the labor market could slow down faster.”

You can watch Yahoo Finance's Brad Smith, Seana Smith, and Brian Sozzi's full interview withTorsten Slok here.

Key video moments:
0:00:10 Economic data indicates recession
0:00:29 Labor market still okay

*Note: Apollo Global Management is Yahoo Finance’s parent company

Video transcript

BRAD SMITH: How many consecutive months of bad or cooling data should we be expecting for the Fed to actually look for here?

TORSTEN SLOK: Yeah, that's a really important question. I think this week at least did show quite a downside surprise on a number of different fronts. We also got ISM Services, which is the service sector. That came in lower than expected. We also got ISM Manufacturing, which was also lower than expected. Remember, when ISM is below 50, that is by definition that the economy is in a recession, and on both fronts we have seen a deterioration where both the service sector and the manufacturing sector, which are the two sectors in the economy, have been slowing down.

So the impressive thing in this number is still that the labor market is still doing OK. There's still a lot of anecdotes about companies that are looking for workers, but there are certainly also more and more anecdotes, if look at the warn notices, which is basically companies have to say in advance if they lay off workers. That's been picking up. We've also seen, as I mentioned, jobless claims picking up, meaning the weekly data of how many people applied for unemployment benefits. That's also been softening.

And overall combined with fewer job openings, combined with a slowdown we saw in this number here for nonfarm payrolls being weaker over the last few months, it still points to an economy that's slowing down, and that's not surprising. The whole idea from the Fed side is to raise interest rates to slow down consumption, slow down capex spending, and slow down hiring. So we should expect that process to continue.

The only issue now is if we are adding on top of that a tightening in credit conditions, if it becomes harder to borrow money for your credit card or for buying a car or for buying-- or building skyscrapers and buying factory equipment for companies, if those things slow down again over the next several months, we may run the risk that that slowdown could come a bit harder, and that means that therefore that the labor market could slow down faster.