Morning Report: Volatility isn’t going to influence the Fed much 8/28/15

Stocks are taking a breather after a big two-day rally. Bonds and MBS are up.

Personal Income rose 0.4% in July, in line with expectations. Personal Spending rose 0.3%. The Core PCE Index (The Fed’s preferred measure of inflation) rose at 1.2% YOY. Nice to see a little wage inflation. On the other hand, the low PCE inflation is going to worry the Fed.

Note that the National Labor Relations Board just issued a pro-union decision to make a company that hires a temporary agency for workers a joint employer. This will supposedly make it easier for workers to unionize and it makes the ultimate employer liable for what happens to temps. This was considered a big win for the unions. Does it ultimately result in higher wages, or simply more campaign cash for Democrats? I am betting on the latter.

St. Louis Fed Head James Bullard says that the recent volatility in the markets isn’t going to be much of a factor in the FOMC’s decision-making next month. The Fed Funds futures however discounted the probability of a Sep rate hike from about 50% to about 30%.

Pending Home Sales rose 0.5% in July. The real estate market is inching better, but tight supply and affordability issues are holding things back a little.

Consumer sentiment fell in August, according to the University of Michigan. The 91.9 reading came in below expectations.

16 Responses

  1. “Does it ultimately result in higher wages, or simply more campaign cash for Democrats? I am betting on the latter.”

    Or less use of temp agencies. And some temp agencies going out of business.

    I should be more concerned, but I’ve never been a fan of temp agencies.

    Oh, and . . . Frist!


  2. It’s definitely going to cause the parent companies to pay more attention to the HR practices of their franchisees. Look for more class action law suits.


  3. I guess it is a payoff for the trial lawyer lobby then.. Figures. The other big D constituency…


  4. The other big or the biggest?


    • Best line I have seen on the Virginia shooter’s apparently disturbed inclination to find racism and other affronts in even the most innocuous and innocent of things (eg he apparently he complained about a reference to a reporter being “out in the field” as being a reference to the “cotton fields”, and concluded that 7-11 was racist because it offered watermelon flavored slurpees):

      “instead of going on a killing spree, this guy should’ve gotten a columnist gig at the Guardian.”


  5. I know, right?

    Republicans dog-pile Clinton for comparing them to terrorists on women’s issues:


  6. Does it ultimately result in higher wages

    There should be the possibility of contrasting data. Of course, one cannot compare a factual to a non-factual. However, there may be similarly situated “joint employers” and we might be able to watch if unionized ones pay more, or if they force the entire competitive industry to pay more, or if the price competition for services/products forces the differential wage to approach zero.

    What will be more difficult to compare, and what will be compared anecdotally, is working conditions. I did find some unions to be very precise in noting affordable betterment of working conditions and campaigning very hard for them. Typically, this would be when a Local led its own negotiations and did not bring in a hired gun from national.


    • The biggest problem, it seems to me, is that labor law is being written and enacted merely by 3 unelected bureaucrats in the first place. I’ve scoured the constitution and can’t seem to see where such an eventuality is authorized.


  7. The Olive Garden table app was caught short changing the wait staff on their tips.


    • What a weird event. Abortion comedy. Seems unlikely to find much appeal outside of the radical feminist crowd.

      I suppose props are in order for at least not hiding behind a veil of the usual euphemisms and cliches. “I laid waste to a child and it was awesome!”

      Funny stuff, eh?


      • Movies about women having abortions have been a minor arthouse staple lately. The romantic comedy “Obvious Child” last year starred Jenny Slate as a stand-up comedian who gets pregnant after a one night stand and then gets an abortion. Currently in theaters is “Grandma” starring Lily Tomlin as the titular matriarch who just broke up with her girlfriend and needs to find $600 for her granddaughter’s abortion. Hilarity ensues.

        I vaguely recall $500 being the going rate for an abortion way back in 1988 from “Story of My Life” by Jay McInerney. That book has an interesting political asterisk on it. The novel was written in the first person, loosely based on McInerney’s former girlfriend Rielle Hunter. In the novel, Allison Poole [SPOILER ALERT] extorts $500 from a boyfriend with a fake pregnancy scare but then winds up pregnant for real. Drama ensues. In real life, Hunter was the woman John Edwards knocked up and then had an aide claim paternity to cover it up. The $500 might have been cheaper in the long run.


        • yello:

          Movies about women having abortions have been a minor arthouse staple lately.

          I saw “Obvious Child”. I think there is a difference between a romantic comedy centering around the life of a woman contemplating abortion and a stand-up comedy show in which women celebrate and laugh about what abortion actually is.

          Maybe I am out of touch, but I think jokes about “laying waste to a child” and how “awesome” it was to have an abortion will have an extremely limited appeal. There are legitimate PR reasons why the wider pro-choice movement hides behind euphemisms like “women’s health” and has developed slogans like “safe, legal, and rare”.


        • I saw “Obvious Child”.

          You are one up on me here. I’m a fan of Jenny Slate’s silly Marcel The Shell videos but hated her character on “Parks and Recreation”. I’d watch the movie if I stumbled on it but it’s not in my queue at all.

          The show I have been working my way through is “Grace and Frankie” starring Lily Tomlin and Jane Fonda as an updated odd-couple thrown together when their respective husbands (played by Martin Sheen and Sam Waterson) declare that their partnership has moved beyond professional.


        • yello:

          You are one up on me here.

          I streamed it on Amazon Prime. Not what I would call a must see.


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