Morning Report: Strong jobs report

Vital Statistics:

S&P futures4,54010.2
Oil (WTI)99.24-1.79
10 year government bond yield 2.44%
30 year fixed rate mortgage 4.79%

Stocks are lower this morning as we start off the second quarter. Bonds and MBS are down.

The economy added 431,000 jobs in March, according to the Employment Situation Report. The unemployment rate slipped 0.2% to 3.6%, which the labor force participation rate was flat at 62.4%, which is still below pre-pandemic levels. Jobs grew the most in leisure / hospitality and professional / business services. Average hourly earnings rose 5.6%, which is below headline inflation, and implies that real (inflation-adjusted) wages are falling.

Personal incomes rose 0.5% MOM in February, according to the Bureau of Economic Analysis. The personal consumption expenditures (PCE) inflation index rose 0.6%. On a year-over-year basis, the headline PCE index rose 6.4%, and ex-food and energy it rose 5.6%. This index is the Fed’s preferred measure of inflation, and this is the fastest pace since 1983.

The ISM Manufacturing Index fell 1.5 points in March. “The U.S. manufacturing sector remains in a demand-driven, supply chain-constrained environment. In March, progress was made to solve the labor shortage problems at all tiers of the supply chain, which will result in improved factory throughput and supplier deliveries. Panelists reported lower rates of quits and early retirements compared to previous months, as well as improving internal and supplier labor positions. March brought back increasing rates of price expansion, due primarily to instability in global energy markets. Suppliers are not waiting to experience the full impacts of price increases before negotiating with their customers. Panel sentiment remained strongly optimistic regarding demand, with six positive growth comments for every cautious comment, down from February’s ratio of 12-to-1. Demand expanded, with the (1) New Orders Index remaining in growth territory, supported by weaker growth of new export orders, (2) Customers’ Inventories Index remaining at a very low level and (3) Backlog of Orders Index continuing in strong growth territory.

Consumption (measured by the Production and Employment indexes) grew during the period, though at a slower rate, with a combined minus-0.6-percentage point change to the Manufacturing PMI® calculation. The Employment Index expanded for a seventh straight month; panelists indicate their ability to hire continues to improve, to a greater degree than in February. Challenges with turnover (quits and retirements) and resulting backfilling continue to plague panelists’ efforts to adequately staff their organizations, but to a lesser extent compared to February. Amid signs of staffing and supplier delivery improvements, production expanded at disappointing levels, likely due to timing issues. Inputs — expressed as supplier deliveries, inventories, and imports — continued to constrain production expansion.”

House prices rose over 20% YOY, according to the Clear Capital Home Data Index. The West and the South are experiencing the fastest home price appreciation, while the Midwest and Northeast lag. The fastest growing MSAs include places like Nashville and Phoenix. I have to imagine that as remote working takes off, more companies will relocate to where it is cheaper. IMO, it kind of explains why the Motor City became the Mortgage City.

27 Responses

  1. Ezra Klein begging an economist to tell him that he’s not wrong.


    • For all the left’s bleating about “science” they are driven by feelz not reelz


    • A liberal economist who would agree more on what constitutes desirable policy with Ezra than disagree. But sometimes no matter how religious you are you have to acknowledge at least a little reality.


    • The thing is, left econ has pretty much gotten everything it wanted. We had temporary UBI, the Fed has printed a ton of money, and fiscal policy was incredibly loose.

      Left Econ has run the show since 2008, and it cannot blame the results on anyone but themselves.


  2. Wait, this states fissures in NATO appeared after August of ‘21. I thought Trump had destroyed NATO and Biden saved it?


  3. This is funny:

    “The 20-somethings Scaring Liberal Think Tanks

    Fearful of bad PR, left-leaning groups are rushing to embrace staff unions and boost salary floors — while upending some longstanding D.C. assumptions about paying your dues.

    By Michael Schaffer
    04/01/2022 04:30 AM EDT

    It was an easy call — at least for a liberal organization in Washington, and at least in the political environment of 2022.

    The Center for American Progress, the Clinton-inspired institute that has helped staff successive Democratic administrations, reached a deal last week that averted something that would have been a first in the annals of Beltway history: A strike at a think tank.”


    • I feel like while such things are a belated alignment of practice with principal, there’s a bit of letting the inmates run the asylum that comes with it that will not bode well for them.


  4. Smart electoral politics.


    • Yup. Need to get that message out everywhere. Nothing will serve candidates on the right than painting the Democrats as the elitist royalty they imagine themselves to be, over and over again.


  5. Trump interview removed from YouTube for saying the same thing Hillary said in an interview that remains up on YouTube.

    I don’t understand why people don’t sue YouTube (and Twitter) for fraud. It is plain that they apply their “rules” selectively, and that therefore their stated rules are not in fact the actual rules, and that their claimed reasons for censorship are lies. They are obviously engaging in a fraud with users, and would appear to be easily provable in court. Someone should just sue the shit out of them.

    And discovery ought to be quite informative.


    • It will happen at some point. I would think. It is inevitable that the longer they pay no price for corrupt practices the more obvious and corrupt they will become until there is no avoiding a reckoning.


      • In politics you have to reciprocate or else the unwanted behavior will continue. Durbin’s opening statements should have been interrupted multiple times and there should have been victims and relative of victims of pedophilia in the audience interrupting throughout the course of the hearings. That they didn’t do it says a lot about their desire to win I think.


  6. I’ve thought this for a loooooong time and find this to be very compelling.


    • People who can think rationally have though this for a loooong time because it’s transparently obviously the case to anyone not actively deluding themselves. And parents have been imagining they are things in their kids that aren’t there when they are too young to articulate individual personality forever. Why teen-to-young adult years can be so hard on those parents.

      But these folks go so far sometimes, I think Munchausen-by-proxy would be a reasonable diagnosis.


    • I suspect it is a way for a kid to get attention as moms trip over themselves validating the kid to establish their woke bona fides.

      A nobody kid can become a somebody immediately


    • This is interesting:

      Fifty-three percent of the mothers of boys with GID compared with only 6% of controls met the diagnosis for Borderline Personality Disorder on the Diagnostic Interview for Borderlines or had symptoms of depression on the Beck Depression Inventory. Results of the Summers and Walsh Symbiosis Scale suggested that mothers of probands had child-rearing attitudes and practices that encouraged symbiosis and discouraged the development of autonomy.


    • If you want to know who rules over you, look to who you are not permitted to criticize.

      Patriarchy = Projection


  7. Scott, you were asking about the use of the term queer a few days ago. This may be of interest:


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