Post great recession, the Unemployment rate went into double digits … +10% …. Many including us thought the new natural level of unemployment may be near 6% – prior to the great recession most believed 4% would be the all time low…
3.8% Unemployment Rate
The regular monthly Employment report from the Bureau of Labor Statistics reported last Friday, June 1 that the Unemployment rate hit 3.8% — Yes 3.8%!
Wow….
Naysayers would say this will put pressure on wages, pushing up the CPI – Consumer Price Index – indirectly forcing the FOMC (Federal Open Market Committee) to raise rates fast — possible inducing an inverted yield curve…. leading to a recession… got that… sorry for the long domino effect– but this is how Wall Street thinks… perception can become reality… Let’s check the CPI …
The CPI looks fine and has not moved up too much. Here is a possible reason why…
Jolts – Job Opening and Labor Turnover Survey
Essentially this is a relatively new statistic that many follow included the FOMC, that shows what the US Economy is producing in the form of jobs…. an increase in this chart means more jobs are available…
More Employment, but more Jobs… No Inflation —
Nice…
Have a Great “Lower Unemployment” Day!
John A. Kvale CFA, CFP
What Happens When You Get A Decidedly Positive Economic Reading, While Expecting Negative?
Last Friday, June 5, 2020 the Bureau of Labor Statistics (BLS) released its regularly schedule monthly report of hiring and firing report nicked name “The Employment Situation”
Closely followed as a broad measure of the health of the economy and the consumer, experts (so called) from all ports of finance (Economist, bankers, investment bankers, brokers) tally their estimates of what the monthly reading will be.
In all fairness, due to bread crumbs from other reports, usually the forecasts are very close and often garner a quick glance and a carry on to other items attention span.
Fridays expectations were for a loss of just over 7 million folks.
Oops – What Happens When You Miss Big?
With an expectation of ( -7 million) more job losses and announcement of +2.5 million gains, caught Market Participants WAY off guard…
Interest Rates took note as well… which is very logical, as rates go up as economic conditions expand…
Likely ahead of ourselves a bit, but heck it is a start….
Bumps most certainly still ahead… but still a start…
Have a Great “Why We Don’t Forecast Much” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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Posted in Economy, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments
Tagged BLS, Bureau Of Labor Statistics, Employment, Unemployment Report