Morning Report: The jobs report says the recession ended last month

Vital Statistics:


Last Change
S&P futures 3173 64.1
Oil (WTI) 38.84 0.39
10 year government bond yield 0.92%
30 year fixed rate mortgage 3.29%


Stocks are higher this morning after the jobs report showed the economy added jobs in May. Bonds and MBS are down.


Jobs report numbers:

  • Nonfarm payrolls rose by 2.5 million.
  • Unemployment rate fell to 13.3%
  • Average hourly earnings up 6.7% YOY
  • Labor force participation rate 60.8%

The message from this report is that the economy turned the corner in May and the recovery has begun. Street expectations for this report were way off. The average forecast for payrolls was a loss of 7.7 million jobs, and the forecast for unemployment was 19.8%. The average hourly earnings numbers are interesting. They were down 0.1% MOM, but up 6.7% YOY. I suspect that the higher paid furloughed workers were brought back first, and now we will see the lower paid workers return as retail and restaurants re-open.


The big takeaway from the jobs report is that the recession probably ended last month. I expect to see big upward revisions in the Q2 economic forecasts.


Black Knight reported that the number of loans in forbearance fell slightly last week. “After rising sharply in April and then leveling off toward the end of May, the number of American homeowners in forbearance plans has now decreased for the first time since the crisis began,” said Jabbour. “There were a net 34,000 fewer homeowners in forbearance as of June 2. The decline was actually greater among government-backed mortgages, which saw 43,000 fewer total forbearance plans than last week, but this was partially offset by an increase of 9,000 new plans on mortgages held in bank portfolios and private-label securities.”


Invitation Homes (a single family home REIT) reported that it collected 97% of historical rent in May, so despite the scary numbers from the survey about New York City rent, the rest of the country seems to be doing much better.


The jobs report sent bonds lower, with the 10 year trading around 0.9%. After such a huge move in the long bond, a retracement was to be expected. That said, mortgage rates might not go anywhere as aggregators fight for business and mortgage backed security spreads tighten.

37 Responses

    • Now that’s funny!


    • I was watching CNN late Monday night and they were interviewing a bunch of drunk and fat white guys (with a couple of AA’s in there as well) who were all armed and guarding the entrance of their local Target. They were pretty raucous and having a good time. When the reporter turned away and started speaking with whatever anchor was on in Atlanta the Philly boys start chanting, first it was “Four more years!” and then “USA!”

      It was rather hilarious.


  1. It would be interesting to have seen Trump’s numbers after this report if George Floyd had never been killed.

    I think his response here may have sealed his fate, regardless of the economy. Had he been running as a challenger and Biden was presiding over the response then he’d be a shoe in.

    But as the clueless incumbent, a belligerent version of Jimmy Carter, he can’t really run as the outsider.


    • idk, memories are short,

      i don’t think trump is necessarily running against Biden either. He is running against the left. I think Biden is an empty vessel that the left wing of the party is going to fill with their policy and virtue-signalling wishes.


      • You all know my opinion on Trump’s electoral prospects but the ads where all the Dem’s raised their hands in response to providing free healthcare to illegals will be epic. Also, video shots of rioting and looting with Biden campaign staffers proudly bailing them out as well as supporting the Defund The Police movement.

        Pure spectacle!

        The sheer nastiness of this campaign will be AMAZING!! It may even rival your average 19th century campaign.


    • I think everyone involved is trying to lose.

      Liked by 1 person

  2. Still blown away by the jobs report. Whats the revision going to look like in a couple of weeks?


    • There was this in the notes:

      However, there was also a large number of workers who were classified as employed but absent from work. As was the case in March and April, household survey interviewers were instructed to classify employed persons absent from work due to coronavirus-related business closures as unemployed on temporary layoff. However, it is apparent that not all such workers were so classified. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue.

      If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis). However, according to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.

      So, unemployment was probably 16.3%, not 13.3%. I don’t think this would affect payrolls, which are part of the establishment survey.

      Also, the household survey was conducted from 5/10 – 5/16, just as some states were beginning to open up. I suspect the numbers are vastly different now


  3. NoVA you around?


    • what’s up


      • If you are still EMT’ing, be aware that people were passing out contaminated water bottles to protesters here. They had put laxatives in them trying to be cute, but it could have been something much worse, so that’s something to keep an eye out for if there’s something that looks like poisoning calls from a protest.

        Hopefully no one gets a similar idea in your neck of the woods.


        • thanks for the heads up
          i’ll pass that along to the safety officer.

          my certs are up to date, but i’m not currently active.


  4. Interesting read. I like the term “chaos tourist”.

    This is good too:

    “We have this idea of elections as this kind of sacred ritual that one is undertaking, that you should be inspired and in love with with the candidate. But I often think people need to think about it more like taking out the trash.”

    They completely avoid addressing the primary difference between the “right wing” protests and the BLM ones, namely no one expects to see buildings and buses burned or graffiti at a “right wing” protest. Instead they scratch their heads and wonder why the police react differently. Must be racism.


    • What would it mean to build the state around principles of nonviolence, rather than reserving that exacting standard for those harmed by the state?

      It would mean no state. The only purpose the state serves is to legitimize specific forms of violence. A state organized around non-violence as a principle is incoherent.


    • I expect a lot of trash will be taken out in upcoming elections.


  5. This could be interesting:

    “Once one statue comes down, who owns the land? ”


  6. I understand The Lancet has a peer reviewed study establishing the science behind this policy.


    • Mark:

      Interesting stats.

      On this:

      Over on Twitter, I’ve been puzzled to see that some interpret reporting such statistics as denying a problem between police and the black community exists, or as undermining attempts at police reform.

      If he is truly puzzled, then he is foolishly naive. This is how the SJW left routinely operates, especially on social media.


      • Mind boggling.


        • It was the job of responsible public officials to remind peaceful protesters to distance from each other and wear masks, even though the advice would not have been widely followed. That the apparently idiotic Mayor of NYC actually said peaceful demonstrations were an exception to the guidelines was reckless. Encouraging people to spread disease…what can one really say? “F__k off” comes to mind. YMMV.

          Whenever there are mass demonstrations, bad actors will take advantage of the police predisposition to mass around the demonstrators. The greatest culprits in terms of numbers are burglars/thieves who can steal without fear of being caught, and who will also start fires as distractions. Of course various anarchists on the fringes love this stuff as well. I saw conservatives blaming lefty anarchists and liberals blaming militias for this and I have no personal knowledge about which is the more voluminous evil, but for both to be present in a racially charged climate would not surprise me.

          Sweden now thinks it should have run its experiment tighter, so we will never get a final say on how it would have worked out.

          The Economist has an interesting summary of what we have learned about this virus.

          Some takeaways if you cannot get in:
          About 10-15% of those who are diagnosed—which may mean less than 5% of those infected—eventually become ill enough to need a hospital.

          Tests which look for genetic material from SARS-CoV-2 in swabs from the nose and throat frequently find it present in people who show no other sign of it at all: in one British survey 70% of those who tested positive were asymptomatic.

          Early in the pandemic critical-care doctors in various countries added to the problem by flushing fluids from the body in order to keep the patients’ damaged lungs from filling with liquid. They appreciated the risk of crashing the kidneys that this involved. Their thinking in doing it anyway, Dr Johnson says, was “I have to do everything I can to try to help their oxygen levels, because if I don’t win that then the whole game is lost.” Once doctors began to see high rates of kidney failure in covid-19 patients, though, they stopped “running them dry”.

          In some people the antibody-making process can go awry, and their newly developed antibodies may confuse a healthy cell for an infected one, marking it for destruction by the immune system. That seems to be what happens in a rare sort of inflammation of the heart seen in some children with antibodies to SARS-CoV-2.

          When inflammation gets completely out of control the body enters what is called a cytokine storm. Such storms drive the most severe outcomes for covid-19, including multi-organ failure. There is thus an obvious role for anti-inflammatory drugs.

          just 58% of those who have gone into British ICUs and are not still there have been discharged alive. The rest have died

          A big worry is what happens to the brain.

          I think the best news there is that 85%+ of those who get the virus don’t get very sick, or at all sick. Of course, that makes it a sneaky one when asymptomatic folks mingle with the susceptible. The article says the susceptible are the obese and those suffering hypertension, as well as the senior citizens in general. I will be home bound long after you guys are water skiing again, I fear.


        • Mark:

          I saw conservatives blaming lefty anarchists and liberals blaming militias for this and I have no personal knowledge about which is the more voluminous evil, but for both to be present in a racially charged climate would not surprise me.

          I would definitely be more surprised to find right-wing militia types at a BLM SJW protest than lefty anarchists. Not least because protesting is pretty much the raison d’ etre of the latter. In my mind, militia types were much more likely to be found at the anti-lockdown protests, and I don’t recall seeing much looting, rioting, and beating people at those.


        • I would definitely be more surprised to find right-wing militia types at a BLM SJW protest than lefty anarchists.

          Exactly. Limited government / 2A types share almost zero common ground politically with SJW types. Is it possible that a couple are doing fake flag stuff? Perhaps. But it is much easier to believe that Antifa and SJWs (who have almost identical goals) traveling together in riots


        • This is how Voice of America presents it to the world, FWIW:

          and from Barr:

          Barr said a “witch’s brew” of extremists with many different motivations were involved. On Wednesday, authorities revealed that the FBI arrested three members of a radical right-wing group called Boogaloo in Las Vegas, accusing them of planning to attack police during the demonstrations.

          All I am saying is that police concentration on the demonstrations opens the door to anyone with base motives. This is acute insight into the obvious, I know.


        • The “far right” racist “right wing” militia types might show up, as they are all–like American Nazis–people with mental illness but semi-functional in day-to-day life. So it’s always possible, but they also aren’t the problem. But there is a closing of the horseshoe there where likely they share antifa’s goal of starting a race war or some such thing just expecting a different outcome, despite being hugely in the minority there. But there are also folks like sovereign citizens who would likely agree the police should be abolished. So there is overlap. I just think a lot of the focus on these folks is to make it out that all the violence is “right wing” and thus really all conservatives and the folks on the left are sainted, peaceful protestors somehow–at least in regards to some of the media coverage.

          The problem is that the mentally ill anarchist/radicals on the “right” have been marginalized and have zero impact on business, government, entertainment, the media, and academia so they are still bad but essentially defanged. On the left these folks have a lot of support and a large presence in all those categories. So looking at the rare mentally disturbed right-wing LARPer is not the best focus, because remove antifa, rioters and looters and they have nothing to hide behind and likely zero impact.


        • So now there is an Admin unternal security assessment that says the biggest threat of lethal violence comes from domestic lone wolf types with racially or ethnically motivated violent ideologies, and footnotes antifa as a minor player.

          Again, I would not put on my blinders and assume anything other than that peaceful large demonstrations turn cops attention away from normal policing and that most of the violence is simply burglary and delinquency run amok in the vacuum, while the rest is fringe activity, as Kev says, the closing of the radical tips of the horseshoe. It is just too comfortable for the left to assume it is all OKC-militia-skinheads and the right to assume it is all antifa-black power, and I for one assume this intel report understates the left contribution, perhaps to disabuse POTUS from making up shit about old white guys who get pushed down and break their skulls in Buffalo NY.


        • Mark:

          Again, I would not put on my blinders and assume anything other than that peaceful large demonstrations …

          I am genuinely curious….what constitutes a “peaceful demonstration”? Specifically, what percentage of “demonstrators” engaging in acts of violence against people and/or property, or what amount of violence against people and/or property, are required before a demonstration ceases to be “peaceful” and becomes a violent one? To me, if a “demonstration” results in burnt out buildings, people beaten unconscious in the street, and mass looting, then it isn’t a “peaceful” one, even if it was a fringe element making up a small percentage of the “demonstrators”.

          I also think that it is a pretty good rule of thumb that the peacefulness of any particular demonstration generally exists in inverse proportion to the number of times the media insists on using the word “peaceful” to describe it. When a demonstration is in fact peaceful, you don’t need to keep telling people that it is in order to convince them, because there is no reason to think otherwise. They only need to keep using the word in order to gaslight you and stop you from believing your own lying eyes. Cast your memory all the way back to 4 or 5 weeks ago when there were protests against the lock-downs. You know, the demonstrations where no one was killed, no buildings were burned, and no businesses were looted. How many times were those described in headlines as “peaceful”?


        • Mind boggling? I’d say predictable. Who wants to be attacked as racist in the modern era? I don’t think there is any worse crime than being racist–which for a lot of those folks is apparently synonymous with, if not simply being caucasian (and when I say those folks I think there may be many more caucasians in that category than minorities)–or at best having a different option than them (which would explain how minorities who disagree can somehow be white supremacists or having “internalized white racism” or just “internalized whiteness” because in the modern lexicon, “white racism” is redundant, as there is no other kind).


  7. two things. watching JK Rowling step on the what is gender landmine is fun.



    • The tweet that Pool was referring to seems to be gone. What did it say?


      • Doctors clapping for protesters, apparently. Same folks who were trying to block “end the lockdown” protesters.

        I love the “solidarity between heroes” response below. Really? Doctors are doing their jobs (though not at the moment they were out there clapping) and the protesters are mostly virtue-signaling and accomplish nothing productive (defend their right to protest, but still) . . . not heroes. Especially given they are protesting something with about which there is general majority agreement. And 100% agreement in popular culture, the media, and entertainment. There is no risk. And nothing positive to actually be achieved–in fact, it could have been counterproductive. So heroes seems a stretch.


    • And she continues to step on it.

      ‘Feminazi’, ‘TERF’, ‘bitch’, ‘witch’.
      Times change. Woman-hate is eternal.

      Feminazi is hate of feminists, particularly 3rd-wave and later feminists. TERF is a “descriptive” slur against radical feminists who don’t believe biological men are women or who should be treated as women–which is apparently the case–and hating TERFs is not hating all women per se, although it does become kind of meaningless when the person hating on you for thinking “men” and “women” are social constructs and not the intrinsic product of birth.

      Also if gender is not intrinsic but and manifestation of one’s feelings about their identity, why isn’t race the same? Actually I feel that’s coming.


      • there was a guy on the PL that argued that … the idea that race is a social construct.

        he’s probably been in his bunk for the past 14 days. hope he hydrates.


Be kind, show respect, and all will be right with the world.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: