Slowing! Nonfarm Payrolls Up 142k, 2,358 Jobs Added In August (Considerably Below The Average Of 5,254 Jobs Added Since April 2021)

2023 and early 2024 saw numerous months where BLS reported jobs added increasing by 200k or more. but after May 2024, jobs added have been slowing,

In August 2024, US nonfarm payrolls rose by 142K, with job gains in construction and healthcare. The unemployment rate held at 4.2%, and the labor force participation rate remained steady at 62.7%. Average hourly earnings increased by 0.4% to $35.21.

2,358 jobs were added in August. This is considerably below the average jobs added since April 2021 of 5,254 jobs added monthly.

Both previous months were revised sharply lower, so once again expect the August print to suffer the same fate. Specifically, the BLS said that the payroll print for June was revised down by 61,000, from +179,000 to +118,000, and the change for July was revised down by 25,000, from +114,000 to +89,000. With these revisions, employment in June and July combined is 86,000 lower than previously reported It also means that 4 consecutive job prints have been revised lower, and 6 of the past 7.

Weekly hours worked remains below pre-pandemic average; a fraction of an hour per week may not sound like much, but multiply that by over 150 million people and 52 weeks per year, and that’s a significant difference in man-hours worked and aggregate income.

Yes, the US economy is slowing.

ADP Jobs Report: 1.3% YoY Jobs Added As Federal COVID Spending Runs Out of Steam (Grizzly Bear Economy)

We are dancing the Grizzly Bear with jobs reports.

The more truthful ADP report is out and it shows a wimpy 1.3% YoY addition in jobs. So much for a dynamic, growing economy under Biden/Harris. The Covid era Federal spending has run out of steam.

Ahead of tomorrow’s “most important data point in history” payrolls print, this morning we get the ADP employment report and jobless claims (and ISM Services) as an aperitif to tease the day traders and test the reaction functions of the algos.

Against expectations of adding 145k jobs (a slight improvement over July’s 122k), ADP’s Employment report printed a dismal +99k for August – the weakest print since January 2021 (and July’s +122k was revised down to +111k)…

Source: Bloomberg

That is also the fifth straight monthly decline in the ADP employment report’s jobs additions.

The highest-paying jobs segments including Manufacturing and Professional Services saw the largest job declines…

This was the weakest Services job growth since March 2023 as Manufacturing job growth also slowed…

“The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” said Nela Richardson, chief economist, ADP.

“The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown.”

Source: Bloomberg

Finally, as a reminder, ADP has underestimated the official BLS data for 10 of the last 12 months…

Source: Bloomberg

So jobs growth weak (great news for the doves) but wage growth has stopped is disinflatinary trend (not a great picture).

Then we had that awful JOLTS report.

Under Biden/Harris inflation, …

Time Has Come Today! 2Y Yields Plunge To Below 4% As Fed’s Powell Says Time Has Come To Lower Rates

The time has come today! Or People Get Ready! Rates may drop!

US 2y yields plunge to 3.95% as Fed’s Powell says ‘time has come’ to cut interest rates. Says Fed doesn’t seek, welcome further cooling in labor market.

Of course, there is a Presidential election in 60 days and The Fed doesn’t want the Orange Man to win. Instead, they want the Green Gal to win (Kamala Harris). Here is Green Gal (Harris) with Green Porker (Walz).

Here is Kamala Harris at a DNC campaign rally.

Hey Big Spender! US Gov’t Pays $3 BILLION In Interest Per Day (Federal Unfunded Liabilities At $219 Trillion While Total US Assets At $213 Trillion)

Hey Big Spender! (Federal Government).

The US government now pays out on average $3bn in interest expenses per day…If the Fed cuts interest rates by 1%-point and the entire yield curve declines by 1%-point, then daily interest expenses will decline from $3bn per day to $2.5bn per day.

Even worse, unfunded Federal liabilities total $219 trillion while total US assets total only $213 trillion. In other words, if China (for example) forced us to pay off our unfunded liabilities like Social Security, Medicare, etc., we couldn’t.

Notice how NO politician ever discusses The Federal goverment spending LESS money. Particularly not Joe “The fool on the hill” Biden or Kamala “Word salad Kammie” Harris.

Happy Labor Day! Market Pricing In Nearly 250 BPS In Rate Cuts While Biden/Harris Overstate Job Gains By Almost 1 MILLION Jobs

What a long, strange trip it has been under the gross economic mismanagement by the Biden/Harris team.

First, market participants are pricing in nearly 250 basis points (or 2.5%) in rate cuts by Jan 2026. Down to 3% from the cuurent rate of 5.50.

Why? The economy is a shambles due to bad economic policies by Harris/Biden and their Congressional stooges, especially Schumer in the Senate and Pelosi in the House. Hence, The Fed will feel pressure to lower rates. Although I don’t think that it will happen.

Of course, the Philly Fed disclosed that the Biden/Harris administration overstated jobs added by almost 1 million jobs in Q2. I would love to see Harris interviewed about that and watch her deflect and break into gales of laughter. How do American workers feel about Biden/Harris overstating jobs gains by almost 1 million jobs?? Isn’t that fraud?

Yield beta is expected to accelerate.

Biden/Harris-illusionomcs! Pending Home Sales All-time Low While Consumer Spending Is Just Government Handouts

We’ll be fooled again by Harris/Walz??

The Biden/Harris illiusionomics was built on false hoods.

Look at pending home sales, now the LOWEST in history. The midwest led the decline in PHS at -7.8%.

Why? One reason is the illusion of a growing economy … that wasn’t growing organically. It was just Biden/Harris doling out trillions in handouts. Trillions of dollars in annual “consumer spending” is actually just government handouts being spent by people – it’s increased every month this year:

US Consumer Confidence FINALLY Rises For 1st Time In 5 Months, But Still Depressed At 67.9 (Buying Conditions For Housing Remains Near All-time Lows)

The University of Michigan Consumer Confidence survery rose for the first time in 5 months as inflation is cooling … for the moment. Hope for Fed rates cuts keeps the S&P 500 elevated.

Buying conditions for housing remains near historical lows. Great job Biden/Harris!

Thanks a heap, Biden/Harris!

The Broken Arms of Krupp! ThyssenKrupp Has NEGATIVE Enterprise Value (How The Mighty Have Fallen!)

I read “The Arms of Krupp” by William Manchester. A great book about the rise of ThyssenKrupp during World War II. It is one of the world’s largest steel producers, but it now has NEGATIVE ENTERPRISE VALUE.

The cause? Germany is up the creek without an economic paddle after years of gross mismanagement by Angela Merkel and her party. Mass immigration in Germany and a slowdown in the global economy aren’t helping.

A dire warning for America.

Highway To Hell! US Pending Home Sales Index Falls Below Pandemic Low (Now At Worst Ever Level)

Biden/Harrisnomics is the US ecoonomy’s highway to hell.

US pending home sales just fell to below pandemic lows and is officially the worst in history.

Way to go Biden/Harris. The economy distorters and killers. Welcome to NEW Venezuela!

Dueling Disasters! Harris’ Unrealized Capital Gains Tax Proposal Versus The Federal Reserve (Housing Prices Will Likely Fall By 10% Under Harris’ Tax Plan)

Dueling disasters featuring Kamala Harris on banjo. Her half-wit unrealized capital gains tax idea versus her notion that The Federal Reserve can just print all the money she needs.

The problem, of course, is that The Federal Reserve has created massive asset bubbles with its money printing. And Harris is talking about taxation of UNREALIZED capital gains which is deflationary.

Harris really loves playing the inequality card. Sure, homeowners are seeing massive gains due to The Fed’s money printing, but so are landlords who rent their properties. Harris’ plan for unrealized capital gains tax on housing will crush both sides of the ownership ledger.

Harris’ plan for a 25% tax on UNREALIZED capital gains will cause housing prices to fall by 10%., ceteris paribus (all things equal). Lenders on housing (particularly those making zero down mortgages) will get clobbered.

Thanks to bank regulations, banks are buying some of the Fed’s balance sheet runoff.

Mortgage rates, like the US economy, are in retreat.

The good news? If Republicans retain the House majority, Harris’ tax plan will be defeated, If not, watch out!

Odd how President Biden (I almost wrote Obama) has vanished from The White House and can be found on the beach in Rehobeth Beach, Delaware.