Michael Darda, Roth Capital Partners chief economist and macro strategist, joins Market Domination Hosts Josh Lipton and Julie Hyman to break down what he calls “a mixed bag” of recent economic data.

Initial jobless claims (the number of people filing for new unemployment applications) hit a four-month low, new Labor Department data released on Thursday showed. Darda tells Yahoo Finance, “If you look at first-time claims in isolation, it really doesn't look like there's anything wrong with this labor market whatsoever. Unfortunately, that is not the whole story.”

“Earlier this week, we got a report out of the Conference Board that have some indicators that directly tie to the labor market that are also telling us something about September and that data weakened pretty precipitously.” The latest labor market differential report, which shows the difference between the share of consumers who view jobs as “plentiful” compared to those who view jobs as “hard to get,” fell to its lowest reading since March 2021. Darda says the recent decline in the labor market differential “would be consistent with the unemployment rate continuing to creep [up], eventually towards 5% and that would throw us back into the recession alarm bell camp.”

The economist notes, “Unfortunately, we have mixed data points here…It's a bit of a mixed bag. But risk markets want to believe in the soft landing story. So [the market has] been making new highs anyway.”

The S&P 500 (^GSPC) hit a fresh intraday high on Thursday. Darda says, “We have a tremendous amount of optimism here with the major indexes at record highs that the soft landing is playing out [and] that it will continue to play out. I think a hard look at the data really leaves more questions there than answers.”

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This post was written by Naomi Buchanan.