More Disability & A Fix For Mass Formation?

Four reports this week – payrolls, ISM, the Fed balance sheet, and total bank credit

• Nonfarm Payrolls (PAYEMS): +339k, expected +190k, prior +294k.  Expansion.
  • Unemployment (UNRATE) 3.7%, prior 3.4%, expected 3.5%.   Low, Sideways Trend.
  • Employed Part-Time – Could Only Find Part-Time Work (LNS12032196): +7k, but in a downtrend.  Expansion.
  • CLF 16-64, With a Disability, Men+Women (LNU01076955+LNU01076960): +473k.  New all time high.
• ISM Manufacturing: 46.9, expected 47.0, prior 47.1.  Contraction.
• Fed Balance Sheet (WALCL): -50.4B (-0.60% w/w).  Contraction.
• Total Bank Credit (TOTBKCR): -9.6B (-0.06% w/w).  Contraction.

The CME Fedwatch Tool ended the week projecting just a 25% chance of that 25 bp rate increase at the Fed meeting two weeks from now.  That’s a big drop from last week.  It feels like Payrolls might have been a Rorschach Test – so what do YOU think Payrolls told us on Friday?  Most answered: a pivot!

Payrolls told me that With a Disability (Men+Women) continues to make new all time highs, and that most likely explains the shockingly tight labor market.  My “inkblot” is saying – the vax damage just continues to accrue, and that’s keeping a lid on unemployment.  Full time work is easy to find, in spite of all the layoffs because – Disability in the labor force.  It aligns not-so-nicely with that data on excess mortality in Germany, which – also – continues to increase.

Wolf Richter has noticed the shockingly tight job market also.

Still an Astonishing Labor Market: Very Tight or Getting Even Tighter in Some Sectors, Getting Less Tight in Others, Not Loose Anywhere, Despite the Rate Hikes (Source – wolfstreet); check out his chart on job openings in arts, entertainment, and recreation (the last chart in his article).  Labor demand in that sector hit an all time high this month; it just continues to scream higher.  From a (minor) industry contact, I’m guessing that group is very highly vaxxed.  When will Wolf make the connection?  We can use him as a market-timing indicator.  He’s a really smart guy, and when he finally figures out about widespread vaccine injury (disability, increased sick time) and its effects on employment, and he realizes that maybe he can trade on this insight, that will mark another “public knowledge” turning point.