WASHINGTON (MaceNews) – This week – for many, the last gasp of summer – has less guidance in the form of fresh U.S. economic data than any week this year, and the two major reports that are arriving raise more questions than answers.
Wednesday’s JOLTS report says so much about job openings and the record number of quits and yet so little about vast changes under way in how Americans are going to be employed. Vast changes are nothing new. When Labor Day was made a national holiday in 1894, almost 40% of Americans lived on farms. Today? 1 percent.
In many industries the job openings are far more than the peak number ever employed in that field during normal times, suggesting they won’t be filled without long-term training opportunities which can be hard to find. The jobs category that is most aligned with a growing economy, professional and business services, has nearly 2 million openings, twice the number as ever worked in that field.
The latest unemployment report illustrated how little is understood about the labor market, with literally no forecaster anticipating how August payrolls would be far below even the very lowest outlooks. Misgauging teachers’ employment status was only part of it.
Tiny anecdotal straws in the winds of change. A relative who is a managing director of one the world’s biggest accounting and advisory firms announces she is moving hundreds of miles from headquarters. Because they never again will be working in the office. A sales representative says it’s very hard to schedule presentations in major cities with office personnel so scattered.
Thursday’s report on business inflation in both the retail and wholesale sectors, the Producer Price Index, will doubtless again reflect the current surge of prices. It won’t hint at how temporary are the surges. And it’s the surging that counts, not the price levels to which prices have surged. Put another way, inflation isn’t the increased prices, it’s how fast they are increasing.
It’s at this point the view of Cathie Woods, the Ark Invest founder, becomes obligatory. As she keeps repeating, her view is the economy is in for a visit to macroeconomics’ black hole in the not-too-distant future, massive deflation that shrinks everything as consumption waits for a cheaper price.
A list of 33 non-oil commodities shows a big change but nothing approaching deflation just yet. Twenty-one have sizable three-month price increases. The one-month increases decline to 13, the same as in the latest week. Yet lumber, for instance, that showed big declines – more than 35% – in the three-month rate of change, is accelerating again. Oil-related commodities haven’t stopped climbing for a year.
A few more days, perhaps weeks of blissful cluelessness about employment and inflation is likely to be followed by more and more identifiable trends in October, November and December and those trends may extrapolate to not-so-welcome scenarios as next year comes into focus.
Without more immigration and a higher birth rate the United States is not going to find another source of dynamism according to those societal auditors, the demographers. The U.S. population is growing at its slowest in 120 years. Time for Showtime to debut a gritty survival drama in emaciated small-town America, “American Rust.”
As for long-term thinking on Capitol Hill, the House is back Monday to struggle in a web of budget, reconciliation and infrastructure challenges, hearings into the botched Afghanistan withdrawal, Roe v Wade codification, an impending debt-limit and government shutdown crisis, all while evictions skyrocket and unemployment benefits fade. Yes, both “hard” and “soft” infrastructure spending theoretically could be a second wind for an aging economy – if it happens. Or a tar pit of misdirected debt accumulation if wasted on routine refurbishments instead of productivity enhancers.
The Senate returns Sept. 20, two days after the Proud Boys and Oath Keepers rally on Capitol Hill in behalf of their imprisoned Jan. 6 Capitol attack brethren.
The new U.S. budget year begins in the fourth quarter, less than four weeks away, with the number of legislative days till then relatively few. The next FOMC meeting is even closer, Sept. 21-22. The Beige Book survey of economic conditions in the 12 Fed districts to be presented to the participants will be published Wednesday afternoon. The first report of third-quarter GDP doesn’t arrive until October 28 and estimates continue to be downgraded.
Were anyone to pay attention to China, that country’s State Council last week resolved to train 75 million skilled workers in the next five years. That’s right, 75 million. The U.S. has 43 major job training programs that could cover millions of people a year. Many studies have shown those who could use the progams don’t know about them. Those who use them don’t get jobs. At this moment the Labor and Education Departments are still trying to devise a measure of effectiveness.
Meanwhile, everyone else stateside will be dealing with the tightening vise of a Delta variant plague outrunning efforts to control it, among the negatives piling up on one side of the sentiment see-saw. Covid cases are four times those of a year ago. Boarded up restaurants and boutique retailers are not getting any less obvious on urban boulevards.
On the other side, strong consumer demand and credit card debt that is growing again although that might be a mixed positive. Rebuilding in the debris trail of Ida will be a boost, specially once power is fully restored at the southern end.
President Biden travels to New Jersey and Queens Tuesday to survey Northeast Ida damage. The big event the White House crew has been planning comes the following week when the president travels to New York, Virginia and Pennsylvania 9/11 venues to showcase his observance of that attack 20 years ago.
More currently, his Chief of Staff Ron Klain told CNN Sunday, “We’ll find a way” to get the thousands of U.S.-linked Afghans left behind out of Kabul along with the 100 or so Americans who still want to leave.
The week’s upcoming data points are listed below:
UPCOMING ECONOMIC DATA AND FEDERAL RESERVE EVENTS
Monday, Sept 6 – US Labor Day federal holiday
Monday, Sept 6 – 7:30p ET – Japan July household spending
Tuesday, Sept 7 – 8:55a Redbook retail activity
Wednesday, Sept 8 – 7a ET US MBA wkly mortgage apps (prvs %)
Wednesday, Sept 8 – 10a ET JOLTS July job openings (June 10.1 mln)
Wednesday, Sept 8 – 2p ET Federal Reserve Beige Book survey
Wednesday, Sept 8 – 3p ET Federal Reserve July Consumer Credit (June $37.68 bln)
Wednesday, Sept 8 – 1:10p ET Fed’s Williams speaks, St Lawrence U
Thursday, Sept 9 – 8:30a ET Wkly Initial Jobless Benefit Claims)
Thursday, Sept 9 – 10z ET US Census Bureau 2Q Services Survey (1Q +4.0%)
Thursday, Sept 9 – 11a ET – US EIA wkly oil stocks
Thursday, Sept 9 – 1p ET Fed’s Bowman speaks (ABA)
Friday, Sept 10 – 8:30a ET US Aug Producer Price Index (July +1.0%)
Friday, Sept 10 0 8a Cleve Fed’s Mester speaks, Bank of Finland
Friday, Sept 10 – 10a ET Revised US wholesale inventories (July +0.6%)
Friday, Sept 10 – 1p ET Baker-Hughes oil rig count (prev US -11/497)
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Contact this writer: denny@macenews.com. Opinions expressed are solely those of the author.
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