Jobs Say No Rate Change
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2024-06-07 09:11 by Karl Denninger
in Employment , 224 references Ignore this thread
Jobs Say No Rate Change
[Comments enabled]

So sayeth the sooths at BLS....

Total nonfarm payroll employment increased by 272,000 in May, and the unemployment rate changed little at 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in several industries, led by health care; government; leisure and hospitality; and professional, scientific, and technical services.

Chugging on we go but do note that "little changed", when looked at on a 2022 to today basis does have a positive slope.  Also note that historically 5% unemployment has been considered "normal" so no, that does not mean we should cut rates (never mind The Fed doesn't set rates; if you want to know where rates are going simply look at the IRX (13 week bill.)

Health care continued to roar in its consumption of GDP with 68,000 adds.  That's bad, not good.  But you won't hear that one anywhere but on this column.  It might be neutral if those 68,000 were all doctors and nurses, but they're nearly-all bill collectors of one form or another.

One important point is that transportation and warehousing is flat and, on an hours-worked basis, down slightly.  To expand the economy you have to move "stuff" and the amount of "stuff" is not moving at a greater rate.  On the other hand it also isn't falling off a cliff, so those who are looking for a sign of imminent rate cuts from that reason are not going to find it in this report.

There's not a lot else of note in here but on a 12 month rolling basis, adjusted for population, employment is down by 1.291 million and accurately reflected in the employment:population rate which fell two ticks last month to 60.1%.

The immediate reaction in in the term rate structure was for the 10 year to move up in rate by about 3% to 4.41% while the IRX was little changed (+0.05%), so the curve has headed back to less-negative.  The last few days have been particularly interesting in that regard as it appeared to be headed for a more-steep inversion after a three-day dive session, but today looks to have aborted that.

Bless your heart if you bought something financed at high interest rate and were sold on the idea that you'd be able to refinance lower in the coming months.  With this data, and the IRX being where it is, that's not going to be possible so I hope you can afford the payments as originally contracted.

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