Don’t be Fooled – The Macro-Economic Picture is Deteriorating

Once again, the Non-Farm Payrolls (NFP) number, at +275K, was well above the consensus +200K estimate. But, that’s where the good news ended. The sister survey, the Household Survey (HS), reported a fall in the number of jobs of -184K. The HS is used to calculate the Unemployment Rate. Since the labor force did not […]

As Inflation Fades and Incoming Data Disappoint The Fed Appears Intransigent

The headline CPI reading of no price inflation (0.0%) in October surprised the financial markets (but not us). It caused a bond market rally as yields (especially on the long end) fell. Then the PPI (Producer Price Index) showed up with a negative number for October (-0.5%), and this is generally a harbinger of what […]

Soft Employment, Inflation, Retail – Economic Implications

The employment reports last week (week ending September 1) had to dishearten the “soft-landing” crowd, as all the employment data showed emerging softness. It began with the JOLTS (Job Openings and Labor Turnover Survey) on Tuesday (August 29). That survey showed job openings shrinking to 8.83 million in July. While that still appears to be […]

Why the Fed is Bluffing

As expected, the Fed “paused” after 10 straight rate hikes. They characterized this as a “skip,” not a “pause,” as the former implies the rate hiking regime is still in place while the latter has been construed to mean that the hiking cycle is over. The Fed does not want to convey that for fear […]

The Real Story Of Employment Data

There were two separate events of economic  significance the week ended September 5th. First, the financial markets displayed volatility that hasn’t been seen for several months. The S&P 500 began the week at 3,508, rose 2.5% to 3,587 on Wednesday, fell -3.7% to 3,455 on Thursday, and after falling to an intraday low of 3,374 […]

Demographic Trends: The Case Against Negative Interest Rates

Japan has a 2.2% unemployment rate, yet, for 30 years, they have not had any significant economic growth, due to their demographic structure. Today, the developed world has Japan’s 1990s demographic features, with falling fertility rates, rising dependency ratios (retirees/working aged), and, ultimately, declining populations. Under these conditions, aggregate GDP growth will be harder and harder to […]