Inflation

[waterbottle]

ADP jobs numbers out tonight.
Amazon now planning to shed 18000 jobs instead of the 10000 planned in Nov 2022. Some nice data by LayoffsTracker, we've already had 28000 tech lay offs announced and we're only 5 days into Jan 2023...


Meanwhile, 43 000 jobs cut in December according to this group:


Looks like the unemployment curve is going to start rising soon. Timing seems to be right for a Fed pause based on previous history. Looks like it may be the beginning of the end.

 

[divs4ever]

looking to test 2020 lows perhaps ?

we have a Lunar New Year coming that might be enough ( without any more really crazy stuff )

 

[divs4ever]

ADP jobs numbers out tonight.
Amazon now planning to shed 18000 jobs instead of the 10000 planned in Nov 2022. Some nice data by LayoffsTracker, we've already had 28000 tech lay offs announced and we're only 5 days into Jan 2023...
View attachment 151286

Meanwhile, 43 000 jobs cut in December according to this group:
View attachment 151287

Looks like the unemployment curve is going to start rising soon. Timing seems to be right for a Fed pause based on previous history. Looks like it may be the beginning of the end.
View attachment 151288

so ... do former employees ( or they will be soon ) sell off their company stock to give themselves a cash buffer ??

the Fed is jaw-boning 'no pause ' but have they any credibility left ?

( are they only left with cut or raise ?)

 

[frugal.rock]

Christmas erroneous temporary employment data?
Groundhog Day

 

[waterbottle]

so ... do former employees ( or they will be soon ) sell off their company stock to give themselves a cash buffer ??

the Fed is jaw-boning 'no pause ' but have they any credibility left ?

( are they only left with cut or raise ?)

I'm going to do something wild and say that the Fed does actually have credibility. They had no choice TBH. If you look back at the coverage in late 2021 - early 2022, discussions regarding the Fed revolved around credibility and lack-of-confidence as they stuck to their guns RE: transitory inflation.
IMO, it was a do-or-die moment for the Fed. They had to outline a plan and stick to it, which to their credit they have. Every conference I've seen JPowell speak at has had the same consistent message - they aren't going to stop raising rates until "the job is done". Keep in mind, that's despite the gyrations and bear market rallies that we've had throughout 2022.
So, in my view, the question isn't what the Fed is going to do, it's when are they going to stop what they're doing. Employment and services are the last few factors affecting inflation. If they're committed to their goal (as they've demonstrated throughout 2022), then they'll keep going until unemployment increases and services inflation is suffocated.

ADP employment numbers just released, pointing to a jobs market that is still relatively strong. 213 000 jobs were added by services industries, 123 000 by leisure and hopsitality. I suspect the latter is a combination of A) holiday travel B) cheap oil C) COVID relief.


The treatment? I think they'll keep raising rates and make it unaffordable. Why? Because nobody knows WTF is going on. A recent essay by the Minneapolis Fed's president Neel Kashkari pretty much confirms this. The analogy he uses essentially boils down to "higher prices via higher interest rates prevents higher inflation". More importantly, his thought process (likely shared by his counterparts) is to err on higher rates to avoid runaway inflation. IIRC, the terminal rate seems to have been revised upwards every quarter.

So we're now at a junction where goods & energy inflation is down, but services are sticky. We have early reports of lay-offs that haven't shown up in official data yet (see above), although if you like to dabble in conspiracy there was a major BLS jobs data revision so job losses may have occurred but are just hidden. Regardless, the Fed's inputs are high inflation, resilient job market. The output is, predictably, going to be higher rates.

 

[waterbottle]

Christmas erroneous temporary employment data?
Groundhog Day

View attachment 151290

And futures have dumped. This is only going to firm the Fed's resolve to continue hiking rates.

EDIT: Jobless claims also down! This labour market is refusing to lie down.

 

[divs4ever]

I'm going to do something wild and say that the Fed does actually have credibility.

well , let's try and test that opinion

we know some folks ( including some smaller traders ) have automated trading systems that scan news feeds for key words and sense those key-words to generate trading orders to get an early start at the trend ( from the important news )

so the very early market reaction ( after the announcement ) should be computer-generated trades , followed shortly after by the skilled traders who know what the consensus opinions are and what to do , if a beat , a hit or a miss , ( stuff the context they want to be near the front of the trend so they have plenty of time to exit ) followed by the more careful traders who are after a long ride ( for a trader ) if the trend looks solid , followed by the rest of the market that follow the trend IF they believe the narrative ( or data )

and let's watch the various FOMC announcements watching for the length and strength of the trend ( a short move before the reversal hints strongly that the sheeple didn't drink the kool-ade , whereas a long/strong move hints nearly everyone had a cup ( of kool-ade )

cheers

 

[divs4ever]

EDIT: Jobless claims also down! This labour market is refusing to lie down.

CAREFUL ! that also MIGHT mean more and more people are giving up looking for work ( maybe even leaving the country )

remember at the same time there is a massive flood of migrants coming across the Southern Border , are they going straight onto welfare or into crime ??

the figures don't compute ( big tech is busy slashing jobs , plenty of migrants , etc etc etc )

Lost in America w/Lyrics on Screen

Student Subtitling Project - February 3rd, 2018 Same-Language-Subtitling! This is another project where the video background version is blocked -- but audio + slides is accepted and monetized by copyright holder. From a literacy impact viewpoint it would be better to add SLS to the original...

yewtu.be

 

[waterbottle]

CAREFUL ! that also MIGHT mean more and more people are giving up looking for work ( maybe even leaving the country )

remember at the same time there is a massive flood of migrant coming across the Southern Border , are they going straight onto welfare or into crime ??

the figures don't compute ( big tech is busy slashing jobs , plenty of migrants , etc etc etc )

Lost in America w/Lyrics on Screen

Student Subtitling Project - February 3rd, 2018 Same-Language-Subtitling! This is another project where the video background version is blocked -- but audio + slides is accepted and monetized by copyright holder. From a literacy impact viewpoint it would be better to add SLS to the original...

yewtu.be

True, it's possible that they're giving up on work, but even so the US unemployment rate is at 3.7%...

Meanwhile, Bed bath & beyond warns market of possible bankruptcy. The first of many?

Bed Bath & Beyond warns it may go out of business, stock tanks

Bed Bath & Beyond may have one foot in the retail grave as its struggles continued ahead of the holiday season.

finance.yahoo.com

 

[divs4ever]

well for a while i participated in a US forum , dedicated to F.I.R.E. (Financially Independent Retire Early ) , and while not a huge forum it was gathering new members looking for an early but well-funded exit from the job market ( some seemed to be fairly high up the corporate ladder )

if the US is losing accomplished staff ( by their own choice and planning ) that is a bad trend for many a MegaCorp

job cuts are good for business when management thins out the bloat , not so good when quality staff run for the exit

 

[over9k]

Remember that unemployment is a RATE, it's effected by the participation rate (people actually looking for work).

Simple demographics tells you that a huge bulge of boomers are all in the process of retiring right now, so this will free up a lot of positions for people to move up into (guy at the top retires, everyone below him moves up a notch).

Not to say there won't be layoffs, but mass retirement = mass hiring, i.e retiring employees balance layoffs out somewhat.

The one thing boomers AREN'T going to do is take risks with their retirement funds/pensions, so a lot of capital is going to dry up.

So interest rates are going to go higher without the fed having to do nearly as much to send them there.

There's also the question of retiree spending habits, normally I'd say to prepare for mass caravan trips, nights out at restaurants etc etc but if inflation has spooked them they might end up sitting on far more of their money/be much less inclined to spend than they otherwise would be.

Food for thought.

 

[over9k]

russian war escalating,

Ukrainians are now being sent armoured vehicles: https://www.bloomberg.com/news/arti...?utm_source=google&utm_medium=bd&cmpId=google

They asked for tanks but didn't get them (yet).

 

[waterbottle]

Remember that unemployment is a RATE, it's effected by the participation rate (people actually looking for work).

Simple demographics tells you that a huge bulge of boomers are all in the process of retiring right now, so this will free up a lot of positions for people to move up into (guy at the top retires, everyone below him moves up a notch).

Not to say there won't be layoffs, but mass retirement = mass hiring, i.e retiring employees balance layoffs out somewhat.

The one thing boomers AREN'T going to do is take risks with their retirement funds/pensions, so a lot of capital is going to dry up.

So interest rates are going to go higher without the fed having to do nearly as much to send them there.

There's also the question of retiree spending habits, normally I'd say to prepare for mass caravan trips, nights out at restaurants etc etc but if inflation has spooked them they might end up sitting on far more of their money/be much less inclined to spend than they otherwise would be.

Food for thought.

Fair point although the participation rate has been in a downtrend for a number of years...
https://tradingeconomics.com/united-states/labor-force-participation-rate

 

[waterbottle]

Ukrainians are now being sent armoured vehicles: https://www.bloomberg.com/news/arti...?utm_source=google&utm_medium=bd&cmpId=google

They asked for tanks but didn't get them (yet).

Ugh. This proxy war needs to end.

 

[farmerge]

Perhaps the war mongering Putrid needs a wake up call

 

[Knobby22]

Ugh. This proxy war needs to end.

Continued western resolve will lead to a quicker end.

 

[waterbottle]

German factory orders down 5.3% month-on-month v. 0.5% expected...

Euro inflation rate out tonight, likely heading down. US unemployment figures to follow.

 

[divs4ever]

German factory orders down 5.3% month-on-month v. 0.5% expected...

Euro inflation rate out tonight, likely heading down. US unemployment figures to follow.

WOWEE !!

i would think the consensus that picked 0.5% are now jobless

that said 2.5% would been my most brutal pick ( so not much closer than the pros )

 

[waterbottle]

Euro inflation sliding to 9.2% v. 9.7% expected. Some inflation now falling in several countries around the world although central bankers will continue hiking.

Bloomberg reporting likely 202K jobs v. 200K expected... I think they would still be enough for the Fed to remain on course for hikes..

 

[divs4ever]

Euro inflation sliding to 9.2% v. 9.7% expected. Some inflation now falling in several countries around the world although central bankers will continue hiking.

Bloomberg reporting likely 202K jobs v. 200K expected... I think they would still be enough for the Fed to remain on course for hikes..

more likely tweaking the way they measure inflation ( they have done it before , will probably do it once more )