I heard part of the Powell news conference today. He asserted the labor market was “in balance” it immediately made me think of your prior analyses on the “jobs recession”
Powell has been cherry-picking his data at least since the 2022 hyperinflation cycle. What is surreal about his stance now is the extent to which he's digging in his heels on not lowering rates. His assessment of the economy and of labor markets is quickly and easily rebutted with just a few data sets from FRED, a resource Powell apparently never uses.
So now it’s later in the day and, Peter, YOU WERE RIGHT AGAIN.
Powell didn’t cave to Trump’s pressure, and left rates unchanged. You called it, of course.
You are endlessly impressive with your assessments, Magnificent Man. I flutter my eyelashes in your general direction. You are indeed the Sage of San Antonio!
Predicting Powell was going to stand pat was not difficult. Literally everyone expected Powell to do what he did--and more and more media commentators even in corporate media believe that Powell is wrong for not cutting the federal funds rate. Even Mad Money's Jim Cramer pondered (on live TV no less) "What the f*ck is the Fed doing?"
Yes, most others were predicting Powell would stand pat. But Trump has swiftly negotiated the end to conflicts between Pakistan and India, between Iran and Israel, between Congo and Rwanda, plus multiple tariff situations, such as the new EU agreement. Trump gets his way! I thought he might have a trick up his sleeve regarding Powell. Well, Trump has bigger fish to fry, and might just ignore Powell for the rest of Powell’s term. You were right, as usual, Peter.
Trump’s strategy for dealing with Powell is about as good as one could have, I suspect.
The whole point of his appearance at the ongoing remodeling fustercluck of the Fed’s DC office buildings was to showcase how much Powell was visibly “not in charge” of even his own agency.
The constant drumbeat of “Too Late” has pushed into even the corporate media a narrative that the Fed is behind the curve on rate-setting to maximize economic performance in the US. While corporate media has been willing to run interference for Powell, the fact that tariffs have demonstrably not led to broadly higher prices has caused the media to run out of talking points, which is how you get Jim Cramer dropping the F-bomb about the Fed on live television.
The net effect has been that the markets are starting to look past Powell and start pricing in his replacement next year. Powell’s presser spooked markets yesterday, but he’s done more damage with his post-FOMC pressers before, so perhaps Trump’s marginalizing of him is partially successful at containing his impact.
What has happened is that, whether or not the Fed is behind the rate-setting curve, Powell is definitely behind the narrative curve. How helpful that is economically is debatable, but it has had a salutary effect of highlighting the muscular nature of Trump’s Presidency.
Peter, 5 days ago you wrote this article Trump Gets Another Win — This One From The Job Market Jobless Claims Numbers Surprise. Can The Good Times Last? Now this, Job Markets Are Not OK. So which way is it going or can you believe any numbers on anything anymore??????
The unemployment claims last week were a clear political win for President Trump, and were overall positive for the economy as well.
However, economic data is never monolithic. There are positive movements even in an overall negative trend. To reiterate a point I made in that other article:
"Could the United States be about to finally break out of the jobs recession it has endured for nearly two years?
While that is certainly the hope, there are data points which remind us that it is still premature to claim “victory!” over the toxic US job markets."
A point I made then still stands--we would need to see many more weekly unemployment claims reports like last week's before we could plausibly consider the jobs recession to be at an end, and there are reasons to doubt that we will see many more weekly unemployment claims reports like last week's.
Additionally, we should also note that the unemployment claims data does validate the total separations data from the JOLTS report. The weeks-long decline in initial claims matches up with the downward trend in separations. Unfortunately, the continuing claims data also validates the downward trend in hiring from the JOLTS report.
Will July be better for employment? The ADP numbers also came out today, and the top line number was very positive. How well that stacks up against the Employment Situation Summary is something we shall find out on Friday.
Last week's unemployment claims were a clear political win for Donald Trump and overall an economic win for the US. Fewer initial claims and even a small drop in continuing claims is a positive result for the US economy, and that's what we had last week.
However, that positive result takes place against a backdrop of an ongoing jobs recession which the June JOLTS data shows getting demonstrably worse. We'll know by Friday if we have reason to believe July has the makings of a trend reversal.
I should also point out that challenging questions are very helpful as vehicles to connect the economic dots. With the wealth of economic data we have at our fingertips, there is a constant need to reconcile what can appear to be contradictory data points and trend lines, and robust debate is an excellent means to achieve that.
The challenge in writing about economic data is fitting everything that's relevant into an article that can be readily digested, especially when the data sets have political significance as well as economic significance. That challenge is only increased by the reality that the economy is always a moving target.
What the corporate media insists on getting wrong about the economy--along with so many other things--is that they insist on sticking to the same narrative no matter what. The economy is always changing, and the narrative arc used to illuminate the data has to change with it.
Does anyone else have a problem with one, unelected guy determining interest rates for the entire US, and really, the world? It’s utterly ridiculous that this is how it works.
Thanks for your great analysis (as usual!). I am trying to reconcile this soft jobs picture with the 3% GDP growth just announced (and the GDP growth in Q1 after adjusting for imports). At some point the two should be telling the same story.
The decline over the past two years is mostly Biden’s fault. The decline in June may be, in part, due to the corporate media’s endless warnings that Trump’s tariffs would cause huge inflation (which hasn’t happened). “ Despite all the corporate media pearl clutching and FOMC prevaricating over tariffs, inflation remains ridiculously absent from the economic landscape.”
So, my optimistic thought is that maybe the July data will show more job openings and hires. Once employers see that the tariffs are not causing the hyped havoc, they may decide it’s okay to hire again. We’ll see it in the data a month from now, or maybe two.
And President Trump is actively calling for Powell to lower rates today. This time it feels like more than just a nudge, nudge - it feels like Trump is saying, “last chance to do the right thing, Powell!”
I heard part of the Powell news conference today. He asserted the labor market was “in balance” it immediately made me think of your prior analyses on the “jobs recession”
Powell has been cherry-picking his data at least since the 2022 hyperinflation cycle. What is surreal about his stance now is the extent to which he's digging in his heels on not lowering rates. His assessment of the economy and of labor markets is quickly and easily rebutted with just a few data sets from FRED, a resource Powell apparently never uses.
So now it’s later in the day and, Peter, YOU WERE RIGHT AGAIN.
Powell didn’t cave to Trump’s pressure, and left rates unchanged. You called it, of course.
You are endlessly impressive with your assessments, Magnificent Man. I flutter my eyelashes in your general direction. You are indeed the Sage of San Antonio!
Predicting Powell was going to stand pat was not difficult. Literally everyone expected Powell to do what he did--and more and more media commentators even in corporate media believe that Powell is wrong for not cutting the federal funds rate. Even Mad Money's Jim Cramer pondered (on live TV no less) "What the f*ck is the Fed doing?"
Yes, most others were predicting Powell would stand pat. But Trump has swiftly negotiated the end to conflicts between Pakistan and India, between Iran and Israel, between Congo and Rwanda, plus multiple tariff situations, such as the new EU agreement. Trump gets his way! I thought he might have a trick up his sleeve regarding Powell. Well, Trump has bigger fish to fry, and might just ignore Powell for the rest of Powell’s term. You were right, as usual, Peter.
Trump’s strategy for dealing with Powell is about as good as one could have, I suspect.
The whole point of his appearance at the ongoing remodeling fustercluck of the Fed’s DC office buildings was to showcase how much Powell was visibly “not in charge” of even his own agency.
The constant drumbeat of “Too Late” has pushed into even the corporate media a narrative that the Fed is behind the curve on rate-setting to maximize economic performance in the US. While corporate media has been willing to run interference for Powell, the fact that tariffs have demonstrably not led to broadly higher prices has caused the media to run out of talking points, which is how you get Jim Cramer dropping the F-bomb about the Fed on live television.
The net effect has been that the markets are starting to look past Powell and start pricing in his replacement next year. Powell’s presser spooked markets yesterday, but he’s done more damage with his post-FOMC pressers before, so perhaps Trump’s marginalizing of him is partially successful at containing his impact.
What has happened is that, whether or not the Fed is behind the rate-setting curve, Powell is definitely behind the narrative curve. How helpful that is economically is debatable, but it has had a salutary effect of highlighting the muscular nature of Trump’s Presidency.
Peter, 5 days ago you wrote this article Trump Gets Another Win — This One From The Job Market Jobless Claims Numbers Surprise. Can The Good Times Last? Now this, Job Markets Are Not OK. So which way is it going or can you believe any numbers on anything anymore??????
The unemployment claims last week were a clear political win for President Trump, and were overall positive for the economy as well.
However, economic data is never monolithic. There are positive movements even in an overall negative trend. To reiterate a point I made in that other article:
"Could the United States be about to finally break out of the jobs recession it has endured for nearly two years?
While that is certainly the hope, there are data points which remind us that it is still premature to claim “victory!” over the toxic US job markets."
A point I made then still stands--we would need to see many more weekly unemployment claims reports like last week's before we could plausibly consider the jobs recession to be at an end, and there are reasons to doubt that we will see many more weekly unemployment claims reports like last week's.
Additionally, we should also note that the unemployment claims data does validate the total separations data from the JOLTS report. The weeks-long decline in initial claims matches up with the downward trend in separations. Unfortunately, the continuing claims data also validates the downward trend in hiring from the JOLTS report.
Will July be better for employment? The ADP numbers also came out today, and the top line number was very positive. How well that stacks up against the Employment Situation Summary is something we shall find out on Friday.
Last week's unemployment claims were a clear political win for Donald Trump and overall an economic win for the US. Fewer initial claims and even a small drop in continuing claims is a positive result for the US economy, and that's what we had last week.
However, that positive result takes place against a backdrop of an ongoing jobs recession which the June JOLTS data shows getting demonstrably worse. We'll know by Friday if we have reason to believe July has the makings of a trend reversal.
Thanks for clarifying, you damn near wrote a new column, LOL
I should also point out that challenging questions are very helpful as vehicles to connect the economic dots. With the wealth of economic data we have at our fingertips, there is a constant need to reconcile what can appear to be contradictory data points and trend lines, and robust debate is an excellent means to achieve that.
The challenge in writing about economic data is fitting everything that's relevant into an article that can be readily digested, especially when the data sets have political significance as well as economic significance. That challenge is only increased by the reality that the economy is always a moving target.
What the corporate media insists on getting wrong about the economy--along with so many other things--is that they insist on sticking to the same narrative no matter what. The economy is always changing, and the narrative arc used to illuminate the data has to change with it.
Does anyone else have a problem with one, unelected guy determining interest rates for the entire US, and really, the world? It’s utterly ridiculous that this is how it works.
Thanks for your great analysis (as usual!). I am trying to reconcile this soft jobs picture with the 3% GDP growth just announced (and the GDP growth in Q1 after adjusting for imports). At some point the two should be telling the same story.
I guess the GDP in Q2 was the inverse of Q1 because of imports.
I have more to say on the GDP numbers in tomorrow's article, but the TLDR is that the 2Q GDP numbers are not at all good.
Exactly
The initial effects of AI and rapid pace of advanced automation are taking effect on the job market.
Good point! How are the bureaucrats tracking that new effect? Has it started, is it accelerating, or will it fizzle - who knows, for now.
The decline over the past two years is mostly Biden’s fault. The decline in June may be, in part, due to the corporate media’s endless warnings that Trump’s tariffs would cause huge inflation (which hasn’t happened). “ Despite all the corporate media pearl clutching and FOMC prevaricating over tariffs, inflation remains ridiculously absent from the economic landscape.”
So, my optimistic thought is that maybe the July data will show more job openings and hires. Once employers see that the tariffs are not causing the hyped havoc, they may decide it’s okay to hire again. We’ll see it in the data a month from now, or maybe two.
And President Trump is actively calling for Powell to lower rates today. This time it feels like more than just a nudge, nudge - it feels like Trump is saying, “last chance to do the right thing, Powell!”
Powell is a criminal.
I was going to say, “clueless imbecile”, but sure, we can run with “criminal”…