Jobs Report Lays an Egg

Well the big news for the week was the jobs report and it was a doozy.

Almost 500,000 below forecast. On the other hand the hourly wages were up .6%–solid wage inflation.

The immediately reaction was for the 10 year treasury to drop 2 basis points on the thought “Powell has cover to delay QE tapering”–but then rates turned and raced higher–now up 3 basis points.

We’ll have to wait and see what happens before the day is out–but I think obviously we won’t see any massive fireworks. We look forward to the next news of the PPI and the CPI coming in the next week or so.

8 thoughts on “Jobs Report Lays an Egg”

  1. Has anyone tried to buy a car lately? I was quoted full msrp plus $2,000 premium. Dealers just don’t have product to sell. Too much money chasing too few goods. Isn’t that the definition of inflation?

    1. If you have to buy a car right now, then you have to pay up. But no, this is not “too much money chasing too few goods”. There has been a microchip shortage in the auto industry for months that is reducing supply. The number of new vehicle sales is way down. Give Google search a try.

      1. The other point I failed to emphasize is vehicle sales is part of our economy and it is running on empty (pun intended). I was offering this up as part of the discussion of whether the economy is slowing.

        1. GDP would be higher if not for low vehicle sales. So eventually there will be a GDP boost when supply issues clear up. As for the overall economy, forecasters have been reducing their expectations recently, for whatever that’s worth to you.

          1. My GF is a Honda Civic honk do to her commuting. She trades every 3years. She bought her last new one a month ago. Price was 3k higher than 3 years ago, but her trade in was $5k higher so she wasnt complaining. Definitely a shortage though. She had to pay a $500 deposit for one that they couldnt even guarantee it would be delivered. Sales lady said 5 people were already in line for it, if she had passed on it. I bought my last new rig a 2018 Explorer for $27k. Glad I bought then.

    2. Yes JV,
      I went looking in June and dealer in town about 20 miles away from me had a F150 that had almost everything I wanted, except it was white. Remember the quote attributed to Henry Ford and the Model T ” You can have it in any color as long as its Black”
      MSRP was about 32,000 They had on the sticker 37,000 I went home to think about it “cooling off ” they called me next day saying someone else was looking and did I still want it? Told them no. I also received a e-mail from Future Ford in Sacramento asking if I was still looking yesterday.
      3 months later ?! they decide to contact me?
      I ordered a red one from local family dealership in July and it was 31,900.00 not counting sales tax. But Build date of Week of Sept. 20th was pushed back to Oct. 20th so I smell the bacon, but still haven’t seen it

  2. Thank you Tim for the summation.
    Call me cautiously optimistic, Sales for August were down. Talking to customers its been slow for them. asked them what they thought and most said prices of material and shortages /availability. Business projection forecast sales to be down by 25% for next 3 months, but of course that makes it easier to beat. Projects slated to happen end of year into 1st qtr. are asking to lock in pricing and can’t commit to that. Lumber and plywood have dropped considerably , but gypsum suppliers have already announced a price increase ( whatever the market will bear )
    What it all means I don’t have a clue.

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