Inflation

[over9k]

Was expecting a run and agree with the "double top" theory. I'm pretty loaded on tech, because the biggest degenerates always fomo the most into it.

I don't thInk it has legs though.

Neither. I was all ready to go 50% into FNGU until the tech earnings last night flipped everything. Now, now I agree with a headline I just saw about how things are now "extremely uncertain".

It might be a hold cash and pucker for a while now.

 

[moXJO]

Neither. I was all ready to go 50% into FNGU until the tech earnings last night flipped everything. Now, now I agree with a headline I just saw about how things are now "extremely uncertain".

It might be a hold cash and pucker for a while now.

Yeah it looks a bit irrational to me.

 

[waterbottle]

US jobs and services PMI out - both posting a significant beat to the upside for Jan 2023. Markets dumping, probably in fear of an inflation busting belting courtesy of JPowell.

 

[Knobby22]

US jobs and services PMI out - both posting a significant beat to the upside for Jan 2023. Markets dumping, probably in fear of an inflation busting belting courtesy of JPowell.

Inflation though appears to have subsided so the soft landing hypothesis is still valid.

 

[over9k]

US jobs and services PMI out - both posting a significant beat to the upside for Jan 2023. Markets dumping, probably in fear of an inflation busting belting courtesy of JPowell.

Really not that much of a drop though and the AUD dropped more than 2% against the USD so the night actually ended up neutral.

Quite a good result considering everything really.

 

[mullokintyre]

One might well trt the BLS figures with a modicum of caution.
As first reported in Zero Hedge , it is no coincidence that the massive jobs no coincides with a major revision of the methodology and reporting criteria for the survey collection data.
From BLS website

In accordance with annual practice, the establishment survey data released today have
been benchmarked to reflect comprehensive counts of payroll jobs for March 2022. These
counts are derived principally from the Quarterly Census of Employment and Wages (QCEW),
which counts jobs covered by the Unemployment Insurance (UI) tax system. In addition,
the basis for industry classification in the establishment survey has been revised
from the 2017 North American Industry Classification System (NAICS) to NAICS 2022.
Approximately 10 percent of employment was reclassified into different industries as
a result of the NAICS revision. Implementation of NAICS 2022 resulted in major
revisions reflecting content and coding changes in the retail trade and information
sectors, as well as minor revisions within the mining and logging, manufacturing,
wholesale trade, financial activities, and other services sectors. Many industry
titles and descriptions were also updated to better reflect official NAICS titles.

Revisions due to both the NAICS 2022 conversion and the benchmark process affected
more historical data than typical in the annual benchmark process. The NAICS
revisions are reflected for the entire history of affected industries for both
seasonally and not seasonally adjusted data. Details of the updated titles and new,
discontinued, and collapsed industries (and resulting changes to tables B-1 through
B-9) are available at www.bls.gov/web/empsit/cesnewseries.htm.

The total nonfarm employment level for March 2022 was revised upward by 568,000
(+506,000 on a not seasonally adjusted basis, or +0.3 percent). The average not
seasonally adjusted benchmark revision (in absolute terms) over the past 10 years is
0.1 percent.

The over-the-year change in total nonfarm employment for March 2022 was revised from
+6,425,000 to +7,096,000 (seasonally adjusted). Table A presents revised total
nonfarm employment data on a seasonally adjusted basis from January to December 2022.

All revised historical establishment survey data are available on the BLS website at
www.bls.gov/ces/data/home.htm. In addition, an article that discusses the benchmark
and post-benchmark revisions and other technical issues is available at
www.bls.gov/web/empsit/cesbmart.htm.

The revisions to the data go back to June 2022, and for some reason, were all to the upside

The revisions - in case there was any question - were to the upside, and made the Establishment survey data appear even stronger. A lot stronger in fact: there were upward revisions to all monthly payrolls reports starting with June 2022 as shown in the chart below.

Zerohedge again

But the one place where the revisions were most notable was in the Household survey which is used to calculate the actual number of employed workers. What it showed was an even more remarkable surge in employment in January, which surged by a whopping 894K in January, and together with the upward revised 717K in December, a grand total of 1.6 million in two months.

But heres the kicker

... the number of full-time workers in March 2022 was 132.587 million. Fast forward to January 2023 when it was 132.577: that's right: total US full-time workers declined by 10K over a period of 10 months. Meanwhile, part-time workers soared from 25.908 million to 27.400 million, an increase of 1.492 million!

This is what Bloomberg chief economist Anna Wong put it: "The January jobs report showed extremely robust growth, higher than the highest estimate in the Bloomberg survey. If it seems too good to be true, that’s because it is too good to be true — the gain is mostly due to seasonal factors and revisions to past data. The Fed likely won’t place too much weight on this report in formulating policy."

So, I doubt that this report will do much for the feds thinking.
I rarely agree with their actions, but I have no doubt they know exactly what is going on.
Mick

 

[JohnDe]

There was a short discussion on the radio yesterday morning. Apologies if already posted or mentioned.

Has high inflation peaked in the US?​

The US Federal Reserve's decision to lift interest rates by 25 basis points was widely expected, it's the smallest rate rise in nearly a year.

Justin Wolfers, Professor of Economics and Public Policy told RN Breakfast that he believes the "crisis of high inflation" will soon be over in the US, if its not already.

Guest:Justin Wolfers, Professor of Economics and Public Policy at the University of Michigan

Has high inflation peaked in the US? - ABC listen

The US Federal Reserve's decision to lift interest rates by 25 basis points was widely expected, it's the smallest rate rise in nearly a year. Justin Wolfers, Professor of Economics and Public Policy told RN Breakfast that he believes the "crisis of high inflation" will soon be over in the US...

www.abc.net.au

Further information to the above -

 

[farmerge]

John De wouldn't it be great to be a fly on the wall when the Reserve brains trust are waffling on around the round (oblong, rectangle, square) table knowing full well that their decision (if it is a rates increase) won't affect them one iota.

 

[JohnDe]

John De wouldn't it be great to be a fly on the wall when the Reserve brains trust are waffling on around the round (oblong, rectangle, square) table knowing full well that their decision (if it is a rates increase) won't affect them one iota.

When you don’t need a car because your job covers all transportation, and your income is set to rise automatically on a regular basis, and you live in a gated community, and all your friends are multi millionaires, it’s pretty difficult to know how the rest of the community live & pay bills.

 

[farmerge]

When you don’t need a car because your job covers all transportation, and your income is set to rise automatically on a regular basis, and you live in a gated community, and all your friends are multi millionaires, it’s pretty difficult to know how the rest of the community live & pay bills.

Oh me, oh my, that's my dream of living without a worry, but I don't think it is on the cards somehow.

 

[sptrawler]

When you don’t need a car because your job covers all transportation, and your income is set to rise automatically on a regular basis, and you live in a gated community, and all your friends are multi millionaires, it’s pretty difficult to know how the rest of the community live & pay bills.

If you want to see how that works out, take a watch of this movie, it shows how those who live outside of the gated community live.

Gangster's Paradise: Jerusalema - Wikipedia

en.wikipedia.org

 

[againsthegrain]

If you want to see how that works out, take a watch of this movie, it shows how those who live outside of the gated community live.

Gangster's Paradise: Jerusalema - Wikipedia

en.wikipedia.org

Might watch this, looks interesting

 

[sptrawler]

Might watch this, looks interesting

I found it certainly an eye opener, loosely based on fact.
I saw it a long time ago, but just checked, it looks like it might be on netflix

 

[farmerge]

If you want to see how that works out, take a watch of this movie, it shows how those who live outside of the gated community live.

Gangster's Paradise: Jerusalema - Wikipedia

en.wikipedia.org

sptrawler an interesting read. I don't mind a bit of blood and guts type of story.

 

[sptrawler]

sptrawler an interesting read. I don't mind a bit of blood and guts type of story.

It wasnt so much blood and guts, just a very realistic expose of life in Jo Burg, the ex pat South African guys I worked with said it was fairly mild compared to reality.

 

[farmerge]

Many, many, years ago when i worked in Perth, we had a few Sth Africans and a couple of Rhodesians working with us. Some of their stories, which I never doubted to be embelished, were quite horrific. Bike spokes used on crowded trains, firey necklaces are just a couple that come to mind readily. Certainly then, was not a place for the faint hearted.

 

[mullokintyre]

John De wouldn't it be great to be a fly on the wall when the Reserve brains trust are waffling on around the round (oblong, rectangle, square) table knowing full well that their decision (if it is a rates increase) won't affect them one iota.

That's unfair to the hard working RBA blokes and blokesses, they will probably get villified on social media, about the very worst thing that can happen to a person.
Mick

 

[mullokintyre]

In the week where the RBA once again meets to potentially heap more pain on the mortgage holders, and more joy onto the self funded retirees, it is intructive to have a look at the recent performance of the CPI.

It can be seen that the CPI started its movement upwards back in the June quarter of 2021, but never started increasing rates until may 2022.
A year later, in my mind six months too late.
Despite all the talk, the rate increases since May 2022 appear to have had no impact in reducing inflation.
So we must ask, will this weeks decision be any different? Will another 0/25/50 basis points make any difference at all?
Surely they have to go at least 25Bp, and really should plonk up 50.
Mick

 

[UMike]

40.... To make it a normal number.

 

[Dona Ferentes]

40.... To make it a normal number.

Yeah, they can't do 15 as some would assume it's the last one, and 25 implies staying open-ended.