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Melting Jobs Market Mocks Trump’s ‘Golden Age’ Narrative
How seriously should we take alternative measures of the world's most important macro readout?
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New title, “Fool’s Gold.”
The BLS jobs report is less and less reliable, even absent intentional manipulation. The survey response rate is plunging, illustrated by – but not remedied through – large revisions. The birth-death adjustment is always wrong at economic turning points. Many BLS personnel have left. Investors will increasingly rely on private labor data. Algos may be later to switch. The private labor data, and much other govt and private data, show the non-AI economy rolling over into recession in real-time. The prospect of a zombie Fed and a 40% AI weight has so far insulated the S&P500 index. Bonds don’t have AI “insulation”. The 70bp drop in 10Y yield is not a good sign. Neither is the -160bp drop in short yields.
The more apparent goal in Washington is to grind everything to a halt, perhaps in the hope that it can never be restarted again.