­Employment Headline Hopeful – Ignore the Details at Your Peril

The big story of the week was the +263K jump in Nonfarm Payrolls, somewhat higher than the street estimate of 200K, now causing some pundits to say that a “soft landing” is now likely for the economy.  Unfortunately, the headline number is quite misleading.  The Payroll Survey is a survey of larger businesses and counts […]

Employment Report – Not What Meets the Eye

Fed Near End of Rate Hikes The big news today was that payrolls increased by +261K. This caused markets to rally (shoot first, ask questions later). Interest rates moved up because the headline +261K may cause the Fed to be even more hawkish. Nevertheless, beneath the veneer, this was a very weak employment report. There […]

Wall Street Narratives Distort Reality

A Deep Recession Is Rapidly Approaching Volatility remains the major feature of financial markets.  You are correct if you interpret the word “volatility” to include a downtrend in equity prices.  This is the kind of action one normally sees in a “Bear” market.  The table below shows the changes in the major U.S. indexes from […]

Increasing Market Volatility

Why It’s The Fed’s Fault Equity markets ended Q1/22 (Thursday, March 31) with the first quarterly loss in two years (since Q1/2020, i.e., when the pandemic began).  Of interest was the rush to sell in the last hour of trading, as if mutual funds and equity ETFs did not want to show too many equity […]

Employment Data –Turning a Sow’s Ear into a Silk Purse

Employment Data –Turning a Sow’s Ear into a Silk Purse The financial markets were stunned by the huge rise in net new jobs in both the Establishment (Payroll) Survey (+467K; consensus forecast +125K), a monthly survey of businesses, and the Household Survey (+1.2 million), a similar survey of individual households. This was especially surprising given […]

The Economy Has ‘Recovered’ – Anemic Growth To Follow

The September jobs report was filled with cross-currents, some showing possible economic weakness, some showing strength. This makes the Fed’s job exceedingly difficult. Is the economy strengthening or weakening? What’s the correct monetary policy prescription? “Taper” asset purchases? Raise interest rates? Since September payrolls were so ambiguous, perhaps October’s (which will be available to the Fed prior to its November meeting) […]