Jobs and PMI: 18 Month Drought?
This week markets will face eight (8) UST auctions with $288B in issuance, which at an average 3.5 to 1 bid to cover, should occupy $1T in market liquidity and primary dealer balance sheet capacity. Moving West...
Following up on Kudlow's Economy: Larry The Liar?... Flash IHS Markit August U.S. Manufacturing PMI at 49.9 (50.4 in July). What does that mean?
Above recent peak in March 2018,(remember that) and declining to a 119-month low. Under 50 means in contraction, but that's not all you get...
The preliminary estimate of the national CES employment benchmark revision indicates a downward adjustment to March 2019 total nonfarm employment of -501,000 (-0.3%).
So rather than 2.5M jobs created between March 2018 and 2019, there were only 2.0M or -20% less jobs than advertised? March 2018 just happens to line up with the PMI data above. Coincidence? We think not.
Translation of the above: Transportation and warehousing -78.7K (less goods being made and shipped), retail trade -146.4K (less goods selling), cascading downstream...
Professional and business services -163K (less services necessary for those laid off above) and leisure and hospitality -175K (less to spend and fewer good times), rinse and repeat.
More to come in An Economic CON-undrum?, stay tuned, no flippin.
Following up on Kudlow's Economy: Larry The Liar?... Flash IHS Markit August U.S. Manufacturing PMI at 49.9 (50.4 in July). What does that mean?
"The PMIs for manufacturing and services remain much weaker than at the beginning of 2019 and collectively point to annualized GDP growth of around 1.5%.
The most concerning aspect of the latest data is a slowdown in new business growth to its weakest in a decade, driven by a sharp loss of momentum across the service sector... new export sales falling at the fastest pace since August 2009...
The continued slide in corporate growth projections suggests that firms may exert greater caution in relation to spending, investment and staff hiring during the coming months." - Tim Moore, Economics Associate Director at IHS MarkitSpending, investment and hiring during the COMING months? How about backing that up to that recent peak on the graph, about 18 months ago as in March 2018? Let's have a look...
The preliminary estimate of the national CES employment benchmark revision indicates a downward adjustment to March 2019 total nonfarm employment of -501,000 (-0.3%).
Translation of the above: Transportation and warehousing -78.7K (less goods being made and shipped), retail trade -146.4K (less goods selling), cascading downstream...
Professional and business services -163K (less services necessary for those laid off above) and leisure and hospitality -175K (less to spend and fewer good times), rinse and repeat.
More to come in An Economic CON-undrum?, stay tuned, no flippin.
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