NYT headline
Friday, July 5, 2024 8:39 AM ET
The U.S. labor market produced another solid month of employment gains in June, its 42nd consecutive month of job growth. But the unemployment rate surpassed 4 percent for the first time since November 2021.
While June beats, May and April were later revised down. So maybe when July beats we will learn June actually is lower than expected???
“ June’s job additions were a slight decline from May, which saw job gains revised down on Friday to 218,000 from the 272,000 initially reported last month. Total revisions for April and May showed the US economy added 111,000 fewer jobs than initially reported.”
Now July is below expectations and the previous June which previously beat has now been revised down. Things are not solid
https://www.bls.gov/news.release/empsit.nr0.htm
“The change in total nonfarm payroll employment for May was revised down by 2,000, from
+218,000 to +216,000, and the change for June was revised down by 27,000, from +206,000 to
+179,000. With these revisions, employment in May and June combined is 29,000 lower than
previously reported. (Monthly revisions result from additional reports received from
businesses and government agencies since the last published estimates and from the
recalculation of seasonal factors.)”
A slow down should happen to a degree in real estate construction. We might see a bump in retail going into Christmas.
the not so solid job market…
“The change in total nonfarm payroll employment for June was revised down by 61,000, from
+179,000 to +118,000, and the change for July was revised down by 25,000, from +114,000 to
+89,000. With these revisions, employment in June and July combined is 86,000 lower than
previously reported.“
So June has gone from 206,000 to 179,000 last month and now from 179,000 to 118,000 this month.
But wait! There’s more!
Are these numbers still positive? I believe so.
Growth is growth.
Says the guy who said the metals markets are in a multiyear low…
Is this what’s causing the schlock market to blow today?
I thought fewer jobs was good. The economy isn’t “overheating.” Scare some people out of asking for a raise. Safe to lower interest rates. Good for profit margins. What would the prognosis be if, today, a rip roaring jobs report came out?
The range that mattered was north of 110k to about 170k.
It works. Of course, I am listening to a talkinghead.
The revisions are minor. How many jobs have come back or been created in the last four years? Far more than the revisions.
A thought struck me. Full employment in 1982 was a debate over 5%. We may at times poke up around 5%. It is okay. Generally, it will be lower.
Interest rates are dropping in the marketplace. Don’t bet against the US. Someone once said that.
The “experts” cannot decide which economic derivative calculation they trust more or which one will have the more immediate impact to their investments.
On one hand, slowing job growth implies ecoomic growth is SLOWING (meaning the second derivative of the first derivative of GDP is negative) so some investors in firms dependent on lower interest rates are hopeful the Federal Reserve will lower interest rate targets which will discount the future cash flows of their investments less heavily, propping up share prices. YEAAAAAAAA.
On the other hand, a decline in the growth of new jobs in theory is perfectly tied to household incomes with the same first and second derivative pattern. A reduction in new hires directly triggers a reduction in increasing household income which reduces the potential for growth in corporate revenues. But a reduction in revenue is visible within three months or the next quarterly earnings report. As a result, companies with lurking issues with growth are worried such reductions become IMMEDIATELY apparent to investors who sell off at the first confirmation of slowing growth.
Apparently, as of September 2024, investors appear more concerned about slowing growith in household income hitting their bottom lines faster than interest rate deductions can take hold to reduce the discounting of their future cash flows to prop up their stock.
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As an aside… I came across a fantastic observation on the BRK board on another (ahem…) site.
The thread was discussing the theory of an efficient stock market. A comment in the thread made this point…
The assumption that the stock market is an “efficient” vehicle for establishing a valid price for stocks assumes that every person holding every stock traded on the exchange is continually looking at the price of each stock in the market every minute the market is open to act on that “data” and decide to continue holding a stock or deciding to sell it.
Day traders may do this, but long-term investors may not look at their holdings for weeks, maybe months. This means the “price” being set by the market only reflects the opinions of those wanting or needing to trade frequently and cannot accurately reflect the “vote” of those not paying attention. The motivations of those “needing” to trade may have nothing to do with the fundamentals of the company being traded.
Thus… Efficient market hypothesis? BZZZZZZZZT.
WTH
WTH,
None of the above.
25 bps is a given.
50 bps is a good idea.
Good idea!
During the demand side period lower interest rates offer corporate planners better IRR in factory output.
During the supply side period lower rates fueled financial decisions.
The FED focus is on factory production. The 25 bps is priced in. Let’s see the FED gun it.
More solid job numbers with prior months once again being revised down.
“ The change in total nonfarm payroll employment for August was revised down by 81,000, from
+159,000 to +78,000, and the change for September was revised down by 31,000, from +254,000 to
+223,000. With these revisions, employment in August and September combined is 112,000 lower
than previously reported. (Monthly revisions result from additional reports received from
businesses and government agencies since the last published estimates and from the recalculation
of seasonal factors.)”
With this trend, October numbers are likely to be negative after the get revised down in a couple of months.