Yes A checkmark with a circle around it close Wells Fargo Advisors on Facebook Facebook symbol, links to WFA Facebook page Wells Fargo Advisors on Linkedin Linkedin symbol, links to WFA Linkedin page
Person with stylus editing a digital chart

Chart of the Week

Weekly chart using economic data to address timely market topics from the Wells Fargo Investment Institute Global Investment Strategy team.

June 15, 2021

Global Investment Strategy Team

Why we expect hiring headaches to continue

call out
Finding the sweet spot on the yield curve — A guideSources: U.S. Bureau of Labor Statistics, National Federation of Independent Businesses, and Wells Fargo Investment Institute. Data as of June 10, 2021. *Three-month moving average. This chart was excerpted from the June Asset Allocation Strategy report dated June 15, 2021.

Download the report (PDF)

end call out

Ratio of hiring to job openings has fallen, while more small businesses report challenges filling jobs

call out

We expect labor-market conditions to remain tight in coming months, as strong economic growth collides with a limited supply of available workers. The paradox of worker shortages despite an unemployment rate that is more than 70% above its pre-pandemic low speaks volumes about labor-market dislocations aggravated by booming demand.

Some of the shortfall is structural, including shifts in demand, a chronic shortage of transportation and other skilled labor, and the early retirement of older workers during the pandemic. And some of the shortfall may reflect enhanced unemployment insurance discouraging workers from returning to their jobs and the impact of the pandemic on childcare availability and concern over returning to work.

end call out

What it may mean for investors

call out
  • Our expectation is that strong economic growth, with labor-market supply constraints, will remain in place through the second half of 2021.
  • We expect the unemployment rate to finish the year at 4.7% — more than a percentage point above the pre-pandemic low of 3.5% — for several reasons: the permanent loss of business establishments that closed during the economic shutdown; lingering dislocations between unemployed and labor demand; and structural changes in the economy that were caused by the pandemic.
end call out

Risk Considerations

call out

Each asset class has its own risk and return characteristics. The level of risk associated with a particular investment or asset class generally correlates with the level of return the investment or asset class might achieve. Stock markets, especially foreign markets, are volatile. Stock values may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. Bonds are subject to market, interest rate, price, credit/default, liquidity, inflation and other risks. Prices tend to be inversely affected by changes in interest rates. High yield (junk) bonds have lower credit ratings and are subject to greater risk of default and greater principal risk.

end call out
call out

Global Investment Strategy (GIS) is a division of Wells Fargo Investment Institute, Inc. (WFII). WFII is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.

The information in this report was prepared by Global Investment Strategy. Opinions represent GIS’ opinion as of the date of this report and are for general information purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally. GIS does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.

The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. The material contained herein has been prepared from sources and data we believe to be reliable but we make no guarantee to its accuracy or completeness.

Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.

end call out