Thirty days ago, few Americans knew what Silicon Valley Bank was or worried about their own bank accounts. Thirty days ago, the Federal Reserve had one fight on its hands: inflation. Thirty days ago, investors were buoyed by decent economic data — but not too strong — supporting confidence the economy was withstanding higher borrowing costs.
Then cracks became apparent, and two banks collapsed, wiping out their shareholders and threatening to take billions of dollars of depositors’ money with them. That fate was avoided, though confidence remains bruised.
We will see how the shudders in the banking world were felt by hiring managers with Friday’s release of the March employment data. SVB collapsed on Friday, March 10, the same day the Bureau of Labor Statistics reported continued strong job growth in February. The next week was the week government data collectors were surveying companies about hiring to generate the March payroll statistics. If there was a flash freeze on credit and confidence, it may show up in the numbers.
Or it may not. First-time unemployment claims fell the week after the SVB bank run and subsequent contagion concerns gripped the investment markets. Despite the technology industry shedding tens of thousands of jobs this year, new job creation has remained healthy, the unemployment rate historically low and wages have continued growing.
