Contributor: Stephen J. Douglass
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Labor Market Malaise Persisted Through the Shutdown
The November employment situation report revealed a labor market that remains stuck in a low-hiring, low-firing morass – neither rebounding strongly nor rolling over into a recession. The report included mixed signals and was distorted by shutdown effects as we feared. This new information will do little to resolve the Federal Reserve’s debate about whether…
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Quittin’ Time is Over
The BLS today released JOLTS data for September and October. These are the most recent high-quality labor market data we have received ahead of tomorrow’s FOMC decision. These latest JOLTS data continue to reflect a labor market that is soft but has not tipped over into a layoff cycle. The openings rate rose from August,…
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ADP Data Highlights K-shaped Corporate Economy
As we await the delayed BLS payrolls data, ADP estimated that private sector employment declined by 32,000 in November. This is the fourth monthly decline in the last six for this series, consistent with the stagnant nature of the labor market reflected in the official statistics this year. Because ADP tracks actual payroll data from…
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From Worst to First: The Mississippi Miracle
Literacy rates may not drive asset allocation decisions this quarter, but we’re all invested in America’s public school system. The deficiencies of that system lead to a less productive workforce, slower growth, greater inequality and a narrower path to solving our fiscal problems. We’d even argue that these dynamics put downward pressure on the real…
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September Payrolls Report Leaves the FOMC Debate Unresolved
The September Employment Situation Report produced a mixed bag of signals that leaves the debate about a third rate cut in December unresolved. The report contained contrasting elements that provide ammunition to both the hawk and dove camps at the Fed. The BLS has delayed the publication of the next jobs report until after the…
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The Economic Data Fog Will Clear Slowly
The longest government shutdown in U.S. history is over. The BLS will resume publication of economic statistics this week, but the fog that has clouded economists’ view will lift only slowly. Most importantly for fixed income investors, the FOMC will still be missing key data points when they next meet on December 9-10. Here is…
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Hawks Push Back Against a December Cut
The FOMC lowered their policy rate by 25 bps yesterday as expected, but Chairman Powell pushed back against market pricing of another cut in December. The FOMC also announced that they would stop reducing the size of their balance sheet on December 1, choosing the cautious course of ending QT early to avoid disruptions to…
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September CPI Report Clears the Way for Another Cut
CPI inflation printed below expectations in September, with the core index increasing by 0.227% in the month or 2.76% annualized. This is the slowest monthly pace since May and clears the way for another 25-bp rate cut at this week’s FOMC meeting. A sharp deceleration in housing inflation drove the core print lower despite another…
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Alternative Labor Data Aren’t Encouraging
Spare a thought for your local financial economist today. The shutdown has deprived us of BLS data and our favorite day of the month spent digging through the details of the U.S. labor market. We are left no choice but to resort to second-tier and alternative sources of labor market data. They do not paint…
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Mortgage Refinancing Market Awakens from Hibernation
Mortgage applications rose by 29.7% in the week that ended September 12, driven by a surge in refinancing as mortgage rates have fallen to their lowest level in more than two years. The MBA Mortgage Refinancing Index jolted awake last week after hibernating near a quarter-century low for most of 2023-2024. That hibernation followed a…