Sometimes, you can’t win for trying. The Fed (and the Biden administration) are facing a real mess with the Jobs data. The reason? If Jobs are too good then the economy overheats. There are signs of that even now.
We’ll begin with a summary of this week’s jobs data.
- JOLTS: The report out Wednesday showed on the hiring side: “In April, the number of hires was little changed at 6.1 million, and the rate held at 3.9 percent.” But separations was low: “The number of total separations decreased to 5.7 million (-286,000) in April…”
- ADP: Strong hiring pace continued HIGHER. We’re way up from pre-Covid levels now and the curve hasn’t leveled-off:
- Challenger Cuts: Yes, there are some layoffs. “With the exception of 2020, it is the highest total in the first five months of the year since 2009, when 822,282 cuts were tracked through May.”
This last is really interesting: In 2009 the market had been through a grueling 9-months due to the Housing Bubble Collapse. Yet, no sign of a Bear market in here. So, what has changed?
A “PnP Career World”
Frankly, we can make out a case where the Fed and government policy has failed to consider the impacts of a couple of decades of BPR and ERP. That Business Process Reengineering and Enterprise Resource Planning.
It struck me this morning while doing a deep dive into 5S workflows when it struck me. People are no longer working in a career. Between BPR and ERP lots of jobs are simply “Plug-and-Play.” Hire anyone with some basic skills, and they will (with little training expense) be able to perform the “human functions” as needed. Totally jumped out of the ADP data:
Appears to us that with a few exceptions in government and the military (for great 20+ year commitments) that more and more people are job hoppers, and this makes the hiring numbers look good. But like M2 (turnover of money stocks to GDP) we’re seeing a new possible distortion.
In our division of the Ure family, the track seems to be a trend of working for a year, or two, and then move on to “something else.”
As our data suggests: If you want a raise, change jobs. Which may overstate economic conditions.
Today’s Federal Jobs Report
Don’t mean to get totally off track on this. but labor turnover could mislead policymakers. But the new ultra “flowable workforce” paradigm (as I think of it) doesn’t mean the economy is growing. But people are changing jobs and getting a lot more money by doing so.
Total nonfarm payroll employment increased by 339,000 in May, and the unemployment rate rose by 0.3 percentage point to 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, government, health care, construction, transportation and warehousing, and social assistance.
This news release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours, and earnings by industry.
Our usual footnotes to this. First is the total number of people working. Which to us is really the main measurement of how robust an economy is:
- Short term, in the last month, fewer people were working. Employed dropped by 310,000 in the ACTUAL DATA (which no one but us seems to be able to comprehend).
- As you can see, we have added more than 23-million jobs from the Covid Lows. A little too much sizzle to contain inflation?
Then we have the CES Birth-Death Model which estimates how many new jobs (that may be undercounted in other studies) have been estimated to “make the numbers” in this month’s report: 231,000 is the answer.
As you can see, however, we have had a robust economy and there’s no indication here that the Fed’s dream of 2 percent core inflation is going to happen any time soon. Which means?
Besides we see Biden-agenda racism? All New US Jobs Since The Covid Crash Have Gone To Foreign-Born Workers | ZeroHedge.
Well, the long-term decline of Dollar purchasing power is baked-in. But at a secular level this appears as prices going up. In short, a lot more inflation.
Why Next Week Matters
A lot of big-money economists are no doubt already seeing the problem. But it will take half a week, or so, for the reality of what’s going on (high employment, higher prices, unstoppable inflation). This is made even worse by the sham budget which doesn’t change anything until after the 2024 election and then it’s another can to kick down the road.
While the Bidenistas love the notion of Modern Monetary Theory (MMT) the Reality is the government can’t just print up money. Because where such nonsense has been tried (the Former Soviet Union, Zimbabwe under Mugabe) and Venezuela) the result has been a train wreck.
The “New Model” of crooked monetarism involves using a proxy war (in the current case Ukraine) to set up money-making schemes while destroying and creating assets willy-nilly. That won’t work either. But the money shills will try it anyway, even though the risk of nuclear escalation increases as the war expands to fill economic holes in crooked people’s pockets.
NEXT WEEK the market needs to worry about the Fed meeting June 13-14.
We’re pretty sure the Fed will have to raise 25-basis points and frankly, were it our call, we’d roll with a 50-basis point (1/2 percent) increase. Housing is too strong, consumers have gone “PnP with work” and as a result, the markets are into territory where a major downturn (as the Yellow Large 2 completes in our chart of Elliott and Trend Channels shows:
If you’re think “My, ain’t this a hot mess!” that’d capture the eau d moment.
Sun Cycle Jitters?
This spring in East Texas has been one of the Best Ever. Cool, about 21-inches of rain and the year’s not half over. And nationally? The panic about Ukraine-driven global famine has eased as the US Drought picture improved dramatically this spring:
To be sure, there are still pockets of extreme drought in the west/central division. But the news is mostly good. Though we wonder if this is the kind of map from which Dust Bowl conditions could arise later in the year.
The Sun is acting a little weird in the latest data just dropped. Has the Solar cycle “peaked early?”
While it looks daunting at this zoom level, it’s really not. This area is circled in this wider-ranging view, and you’ll see the Sun is being pretty tame.
The weather is the weather, of course. But at least for now, we’re thinking the Sun may have “peaked early.” (Don’t they make a creme for that?).
Meanwhile, the implications of Solar Cycles really does matter.
Following up on our Peoplenomics report about the resource-raped West, did you see how Arizona announces new limits on construction in Phoenix area as groundwater disappears | CNN. Equal bummer tone in Washington Post’s Thursday story about how Phoenix area can’t meet groundwater demands over next century. The concepts behind Peoplenomics data are quickly going large.
How the balance of Cycle 25 works out should be “instructive” at a minimum. (rim shot, heard only by smart people).
Sand in the Vaseline
Forever in our Debt: US debt ceiling deal narrowly passes Senate averting catastrophic federal default. A show rally at the open, but we don’t think next week the shills will be able to Canute their way out of this one. Referentially deficit? Click here: King Canute and the tide – Wikipedia, America has no Debt Ceiling. It’s yet-another scam perped on the mental midgets who vote for the same crooks over and over…
I Robot? Try I: SCARED! US Air Force denies reports of AI-controlled drone simulation that ‘killed’ operator.
MMMP? More Mickey Mouse Politics? Trump Judge Who Threw Out ‘Don’t Say Gay’ Challenge Will Now Hear Disney’s Lawsuit Against DeSantis (forbes.com).
Stupid Salesmanship demo: Take this story: US to offer to keep nuclear arms curbs until 2026 if Russia does same | Reuters and see if you can sense how this one will torpedo that: Ukraine says it downed 36 Russian missiles and drones | Reuters. Right, then…
ATR: Useful Health Notes
On Ure’s Integrated Diet (keto, carb-managed) the May weight loss was 12 pounds. G2 says a lot of that is water weight from going near zero carbs. I’m expecting a drop of 2-4 pounds a month going forward. Another update in July.
The Damned Eyes are actually better. The backstory (if you’re not a long-time reader) is:
History: Early onset cataracts (age 35). 10-years of soft contacts followed cataract removal. Then 1988-1990 two Alcon IOLs.
Left IOL failed (dislocated) in 2018, or so.
Replacement attempted (2018) but too much scarring for simple replacement. Further surgeries to implant (anterior) left eye and stop minor post-surg wound leakage. Multi-times daily saline – corneal edema.
The supplement regimen we’re on (which includes fisetin, serrapeptase, and AREDS2 eye vites, seems to have taken my best reads from 20-40 to 20-30 in six months. There’s been some discussion about possible use of serrapeptase to assist with internal (in-eye) scarring from implant surgeries. But we’re very cautious because of secondary infections. Serratiopeptidase – A Cause for Spread of Infection – PMC (nih.gov).
OK, more on ShopTalk Sunday and also Peoplenomics tomorrow.
Write when you get rich,