The June payroll data released a few days ago bolsters the thesis that jobs growth is picking up. Jobs growth is still modest by historical standards, but it is improving, not deteriorating, and that is significant.
Chart #1
Chart #2
Chart #2 shows the level of private sector and public sector jobs. Here we see that private sector jobs have picked up a bit, whereas public sector jobs have lost ground in the past year or so, thanks to Trump's efforts to downsize the federal bureaucracy.
I don't see anything here that would justify or warrant a change in short-term interest rates. The economy is not on the verge of a sudden acceleration, nor is it on the verge of a downturn.
Meanwhile, key indicators of inflation pressures bolster the case for lower inflation: non-energy commodity prices are down 4.5% from their pre-Iran levels, 5-yr breakeven inflation rates have fallen to 2.3% from an Iran-war high of 2.75%, and gold prices are down 10% and the dollar is up 3.5% since the end of February.
Hi Scott: It feels like '93 - '94 all over again... the coming years of American prosperity will cast the dot-com Era (& preceding Regan Era) to look like a Jr. High School Dance! : )) May GBA.
ReplyDeleteThanks for the update Scott.
ReplyDeleteLPI is turning over (liquidity preference index). Elliott Wave says peak has arrived
ReplyDeleteAI is already smarter than humans
ReplyDeleteIntelligence is a broad list of behaviors, as the current researchers now present.
ReplyDeleteFor computer AI, for memory (one of these traits), the machines are ahead of the humans. For communication, perception of approach of communication partner, problem solving and creativity, humans still have the lead. There are other traits.
Scott - we need a currency and debt related post!! Japan situation - yen declining , selling treasuries to buy more yen, USA intervening to help yen ( to protect treasuries ultimately as Japan is #1 holder). , us debt to gdp unsustainable? 30 yr yields highest in a long time, etc. Seems like a slow death?
ReplyDeleteThe latest numbers and abysmal restatements suggest labor markets are deteriorating.
ReplyDeleteHi Scott - I have greatly benefited from reading your economic commentary over the last few years. Thank you for the great work.
ReplyDeletePlease address the debt burden of the AI hyperscalers and the risk of this debt to the US economy and markets. I’m sure you have noticed that CDS spreads are widening for hyperscalers. How can we judge the extent to which these widening spreads are a harbinger of concern for markets overall?
ReplyDeleteM2 slowly ticking up to 7.284%, demand staying about the same at 70.8%. Federal Deficit TTM at 3,873.980. Nothing stops this train. Well, maybe Elon Musk can, but all the stars have to align and the communists in the USA are gaining steam.
ReplyDeleteHello Scott, you have been so generous over the years with your commentary and observations. Very much appreciated.
ReplyDeleteI often recommend others to follow you because primarily your vast experience and the fact that you aren’t selling anything like most everybody else is
So now after he being praised all over you well deserved I do miss your somewhat regular posts, even if there isn’t a lot of change going on. Your observations and opinions are always well received as are some of the comments from others.
I’m sure it’s a bit of a chore to do this and again thank you for doing it. Hoping to hear from you soon
Best regards
Ditto!!!
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