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People Have Power!

Robust consumer spending continues to support a strong economy. 

Last week’s impressive jobs data—employers added 353,000 new jobs in January, nearly double the expected amount—had investors cheering.

That strong headline number might be a bit deceiving, however.

One reason: Seasonal adjustments to January payroll data tend to be very high, historically, which means we may eventually see downward revisions to that initial number. What’s more, January’s strong wage gains—hourly earnings rose 0.6% from December—could be distorted because of abnormally short workweeks last month that resulted from snowstorms and frigid weather across the country.

To better cut through that noise and get a more realistic perspective, consider a metric known as workers’ total spending power (the number of people employed x hours worked x average hourly earnings) instead.

As the chart below shows, the healthy jobs market is keeping consumers’ spending power robust—right in line with its 2018-2019 pre-pandemic average for more than a year now.

Evaluating Consumer Spending Power
Source: Bloomberg, calculations by Horizon Investments, as of 12/29/23


That’s great news, of course, as it provides a strong backdrop for the economy and corporate earnings going forward. While the unexpectedly large job gains we saw last week may delay Fed rate cuts later into the year—and create some short-term volatility as a result—investors will be best served by staying focused on the underlying strength of the American economy and consumer.

This commentary is written by Horizon Investments’ asset management team. Past performance is not indicative of future results. Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry, or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice, or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. All investing involves the risk of loss.

Reference to an index does not imply that any account will achieve returns, volatility, or other results similar to that index. An index’s composition may not reflect how a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. Individuals cannot invest directly in any index. Indices are unmanaged and do not have fees or expense charges, which would lower returns. The investments recommended by Horizon Investments are not guaranteed. There can be economic times when all investments are unfavorable and depreciate in value. Clients may lose money. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The opinions expressed herein are our opinions as of the date of this document. These opinions may not be reflected in all of our strategies. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent. Forward-looking statements cannot be guaranteed. Other disclosure information is available at

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