Speak Your Mind 2 Cents at a Time
We estimate nonfarm payrolls rose by 275k in April ... Our forecast reflects a favorable evolution in the April seasonal factors and a continued boost from above-normal immigration. ... We estimate that the unemployment rate edged down but was unchanged on a rounded basis at 3.8%From BofA:
emphasis added
We look for another month of solid job gains in the April employment report this week. We expect nonfarm payrolls to rise by 250k on the month, with private sector job gains totaling 200k. Elsewhere, we expect the unemployment rate, weekly hours, and the participation rate to hold steady at 3.8%, 34.4, and 62.7%, respectively.• ADP Report: The ADP employment report showed 192,000 private sector jobs were added in April. This was above consensus forecasts and suggests job gains slightly above consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report.
• Active inventory increased, with for-sale homes 33.3% above year-ago levels.
For the 25th straight week, there were more homes listed for sale versus the prior year, giving homebuyers more options. As mortgage rates have climbed to new 2024 highs, we could see sellers adjust their plans, since nearly three-quarters of potential sellers also plan to buy a home.
• New listings–a measure of sellers putting homes up for sale–were up this week, by 10.4% from one year ago.
Since February, the number of homes newly listed for sale has surpassed year ago pace by double-digit with the exception of a few weeks around this year’s spring holidays. As reported in the Realtor.com April housing report, newly listed homes trailed behind every prior year except for the pandemic-induced starting point of 2020 and the record low of 2023.
Here is a graph of the year-over-year change in inventory according to realtor.com. – by New Deal democrat The snooze-a-thon in jobless claims continues, as both initial and continuing claims are well-behaved within the narrow range where they have been generally for the past six months. Initial claims were unchanged least week at 208,000, while the four week moving average declilned -3,500 to 210,00. With the usual one […]
The post The snooze-a-than in jobless claims continues; what I am looking for in tomorrow’s jobs report appeared first on Angry Bear.
Doug Smith Los Angeles Times Monthly payments for housing could get thousands of homeless people off the streets. It sounds like a voucher idea where the funds could only be used only for housing, apartments and heat and electricity. Or paid directly. A stipulated basic income to house thousands of homeless people in various situations […]
The post Monthly payments could get thousands of homeless people off the streets appeared first on Angry Bear.
The roller-coaster ride of US durable goods and factory orders continued in March (final data just released) as the flip-flopping data series
Having plunged by the most since COVID lockdowns in January, US factory orders continued to accelerate in March, +1.6% MoM (as expected) - but February was revised lower... again. This pushed the YoY factory orders up 1.7% (nominal)...
Source: Bloomberg
This is the 17th monthly downward revision in the last 22 months... come on!!!
Source: Bloomberg
Core Factory Orders also rose MoM (+0.5% vs +0.2% exp)...
Source: Bloomberg
The final durable goods orders data prints for March were in line with the preliminary data but more problematically - Capital Goods Shipments Non-Defense Ex-Air was flat MoM, downwardly revised from the initial print...
Source: Bloomberg
...strongly suggesting the capex cycle is stalling.
Tyler Durden Thu, 05/02/2024 - 10:11By Pam Martens and Russ Martens: May 2, 2024 ~ When the Financial Crisis Inquiry Commission released their final forensic report on the causes of the 2008 financial collapse on Wall Street – the worst collapse since the 1929-1932 collapse – it pointed to hidden leverage in off-balance sheet entities at the megabanks on Wall Street as a key driver of the crisis. It wrote: “From 2000 to 2007, large banks and thrifts generally had $16 to $22 in assets for each dollar of capital, for leverage ratios between 16:1 and 22:1. For some banks, leverage remained roughly constant. JP Morgan’s reported leverage was between 20:1 and 22:1. Wells Fargo’s generally ranged between 16:1 and 17:1. Other banks upped their leverage. Bank of America’s rose from 18:1 in 2000 to 27:1 in 2007. Citigroup’s increased from 18:1 to 22:1, then shot up to 32:1 by the end of 2007, when Citi … Continue reading →
The Fed held its benchmark Federal-Funds rate steady yesterday at 5.25% – 5.5%, leaving the possibility of cuts in the future. Jerome Powell repeated his “Data Dependent” mantra. “Persuasive evidence” that higher interest rates were no longer necessary to bring down inflation is what the FOMC wants, and today I want to share a few pieces of that evidence.
Our starting point is the shelter component of the Consumer Price Index. At about 40%, Shelter is the largest portion of the CPI. As the Bureau of Labor Statistics (BLS) explains:
“The data used as inputs in the construction of the index for shelter, as well as the indexes for rent and OER, are collected in two surveys. The Consumer Expenditure (CE) Survey asks households the share of their budget which goes towards different categories of goods and services, and is subsequently used by the CPI program to create weights for index estimation. The Housing Survey collects price observations of rental housing units across the United States.”
Here is the BLS table showing the weighting:
Let’s hold the problems with survey data for another post, and instead zoom in on actual measures of rents.
As our chart (top) shows, the CPI model that measures rent year over year appears to lag other real-time measures by 18 months. The Apartment Rent Index peaked in November 2021 at ~17% year over year; as of April 2024 its down -0.8% year over year. The Zillow Observed Rent Index, with a different mix of rental apartments and houses, peaked around March 2022 at about 15%; it is now at about +3.8% year over year.
BLS measures of Shelter peaked much later, around May 2023 — a lag of 14-18 months. There are several technical reasons why OER lags so much in the BLS measure of shelter inflation — some of the lag is in how the BLS data is collected and assembled, but hold that aside for a moment. I want to focus on a very important aspect that makes the BLS measure of shelter inflation data so different from the observed rents like the Apartment Index and Zillow.
In a word, Renewals.
Almost two-thirds of all existing leases for apartments or house rentals get renewed. Nearly all of these renewals were signed one or two years ago. Leases are contracts, and they lay out the specific terms for renewals within the document.
What rates do you think landlords built into their lease renewals 12-24 months ago when they were drafting and negotiating those 2022 and ’23 leases? They obviously reflected the inflation rates then — which were peaking.
What do contracts negotiated and executed two years ago have to do with the rate of inflation today? You might assume “nothing,” but as we see in the BLS data, it has an outsized impact. It is very visible in BLS’ New Tenant Rent Index — that data, unlike OER, does not include renewals.
No surprise, it too peaked in 2022, and is now at +0.42% year over year:
Back out shelter, which is overweighted by renewals, and the CPI is at 2.3%:
Where the rubber meets the road is in mortgage rates: 61% of all homeowners have a mortgage; of those homeowners with mortgages, 78.7% have rates at or below 5%. Consider also 59.4% are at or below 4% mortgage rate. It should be well understood by now that these rates have become golden handcuffs, locking people who might want to move (trade up, new location, etc.) in place.
Going from a 3.75% mortgage rate to current rates of 7.5% will increase your monthly payments by about 50% — for the same-priced house! Imagine moving up to a more expensive house — one that might be larger or in a nicer neighborhood; it would double or event triple your mortgage expenses even for a modest increase in price.
This is why single-family house inventory is down 75% from its peak of 4 million annually to about 1 million today. That lack of supply has kept prices elevated. Higher rates not only are affecting existing home supplies, it is limiting new home construction, and making that more expensive as well.
I said this a few years ago, but it bears repeating here: If the Fed wants lower inflation, they should be lowering rates now.
Previously:
How the Fed Causes (Model) Inflation (October 25, 2022)
For Lower Inflation, Stop Raising Rates (January 18, 2023)
CPI Increase is Based on Bad Shelter Data (January 11, 2024)
How Everybody Miscalculated Housing Demand (July 29, 2021)
Sources:
Fed Says Inflation Progress Has Stalled and Extends Wait-and-See Rate Stance.
The post Why the FED Should Be <i>Already</i> Cutting appeared first on The Big Picture.
How it started:
How it's going:
Biden finally managed to unify the country https://t.co/Oppf7ssAXn
— zerohedge (@zerohedge) May 2, 2024
In early March, President Biden and the Democrats called for the "Unity of all Americans."
Fast forward to the Marxist revolution spreading like stage four cancer at the nation's colleges and universities, anti-Israel and counter-protesters found common ground, or perhaps a glimpse of solidarity, when both sides were heard chanting "F**K Joe Biden" this week at the University of Alabama.
"It finally happened. Joe managed to get both sides of the protest to hate him for different reasons," X user Alex The Ghost wrote.
It finally happened. Joe managed to get both sides of the protest to hate him for different reasons @ShamashAran @ClairNova4k @Carlkeck1 @DefiantlyFree @Piper010100 @Katie_likes_it @ImissPresTrump @CreativeVerveM
— Alex The Ghost (@GhostOfAlex1) May 2, 2024
Others on X agreed...
See, he really did unify the country.
— Jason Lambeth (@JLambo79) May 1, 2024
Finally!
— flyby (@Barbara88625178) May 1, 2024
America agrees on one thing!
He’s finally found a way to unite the country after 3.5 years. Bravo. pic.twitter.com/t3L9weU4c7
— Shooting News Weekly (@SN_Weekly_) May 1, 2024
Finally something we can all agree on. Thanks Joe.
— Bernard (@BBD100) May 2, 2024
The president and the radical left are walking a very fine line between supporting the Marxist kids at schools and their right to protest while simultaneously denouncing antisemitism. The surge in criticism from both the left and the right of the elderly president's Israel policy risks the unity of both sides in their hatred of the president.
Meanwhile, Axios reports Democrats are in full-blown' panic mode' behind the scenes as campus takeovers by extremists of their own party produce terrible optics ahead of the presidential election in November.
"The longer they continue, and the worse that they get, the worse it's going to be for the election overall," one House Democrat said.
The House Democrat warned that school chaos will only "bring out [the public's] most conservative side."
What's clear is that campus protesters are becoming a political liability for Biden and Democrats.
Republicans are now seizing on the opportunity from New York to California to inform voters that under this administration, the destruction and chaos of America continues. Add this chaos to the long list of failures by the Biden administration, including the migrant invasion, worsening drug overdose crisis, violent crime proliferating across metro areas, disastrous foreign policy moves in Eastern Europe and the Middle East, risking World War III, and, of course, the failure of Bidenomics that has ignited stagflation, crushing America's middle class.
"[Democrats] were trying to make a big deal out of these Trump trials, but they've taken a back seat" to the protests, John Feehery, a Republican strategist and former congressional aide, told Financial Times.
This week, the White House has been awfully silent on the campus takeover crisis.
"When will the president himself, not his mouthpieces, condemn these hate-filled little Gazas?" Tom Cotton, the Republican senator from Arkansas, told reporters on Wednesday.
"President Biden needs to denounce Hamas' campus sympathizers without equivocating about Israelis fighting a righteous war of survival," Cotton added.
A recent poll showed that 81 percent of voters aged 18 to 35 disapprove of Biden’s handling of the conflict in the Middle East.
Michael Moore, who correctly predicted Trump’s victory in 2016, even issued a plea to Biden urging him to accomplish a ceasefire or face defeat.
“We’re going to lose the election. We’re going to lose Michigan if we don’t turn this around. If President Biden doesn’t turn this around, that is going to do more to put Trump back in the White House. And I refuse to have Donald Trump back in the White House,” said Moore.
To sum up, the Democrats are in serious trouble if anti-Israel protesters and counter-protesters begin to march in solidarity around their hatred of Biden.
Tyler Durden Thu, 05/02/2024 - 09:35Authored by Simon White, Bloomberg macro strategist,
Most of the hawkish tilt in yields and rise in Federal Reserve interest rate expectations this year has come in non-US trading hours. A dovish repricing would therefore require (other things equal) a change of trading direction only in overnight hours when volumes are typically lighter.
US yields have risen steadily since their end-of-December lows. Expectations the Fed was going to make over six rate cuts has dwindled down to barely one. The risk-reward now favors a dovish repricing as liquidity conditions are set to worsen as the year goes on. And that is more likely to come from domestic trading rather than from abroad, if recent history is anything to go by.
We can get hourly data going back to October for US Treasuries and fed funds futures, and separate it out into a US day session and an overnight session (both contracts trade 22-23 hours a day). The chart below shows the cumulative sum of the daily change in the day session and the overnight session for the 10-year yield. This year, almost all of the rise in 10-year yields has taken place in non-US trading hours.
Making the assumption that it’s predominately US-based volumes driving trading in US hours, US-based traders pushed yields lower from their October peak. But there has been little further movement all of this year. In contrast, predominately overseas trading (and no doubt some US-based algos and insomniac traders) has pushed the 10-year yield higher all this year – driving the 80 bps rise in the 10y in 2024.
The delineation between US and non-US trading is even more pronounced when looking at Fed rate expectations. The chart below is the same as the one above, but with the twelfth generic fed funds future, which gives an approximation for what’s priced for the Fed in ~12 months’ time.
Here we can see US-based trading drove the proliferation of rate cuts expected at the end of 2023. Since then, US-based traders have not changed their dovish view.
Almost all of the hawkish tilt this year - eradicating most of the cuts expected - came in trading during non-US hours.
It looks like mainly US-based traders took Powell’s pivot in December more seriously than those predominately based abroad. Either way, risk-reward now favors siding with the domestic team for a more dovish rate outcome than is currently priced.
Tyler Durden Thu, 05/02/2024 - 09:15
Remember how AI was going to save the world, give us all more leisure time because of its massive boost to productivity?
Well, in Q1 in the US... it failed to show up as non-farm productivity - or nonfarm employee output per hour - rose at a measly 0.3% annualized rate after an upwardly revised 3.5% gain in the prior period (well below expectations)...
Source: Bloomberg
On the flip-side of that - and echoing the market-worrying ECI data earlier this week - Unit Labor Costs soared 4.7% in Q1 (well above the 4.0% expected and the 0.4% rise in Q4)...
Source: Bloomberg
So wage inflation is confirmed - rising at the fastest pace in a year - as all the gains we have been told to expect from AI just aren't there in the data.
While quarterly productivity figures are quite volatile, a sustained slowdown represents another hurdle for the Federal Reserve’s inflation fight. With interest rates expected to stay at a two-decade high for awhile longer, business investment in equipment will likely continue to be a weak factor in overall economic growth.
Today's data corroborates other data that showed gross domestic product cooled in the first quarter while employment costs rose by the most in a year. As a result, inflation is proving stubborn, supporting the Fed’s pivot to a more hawkish stance that will keep interest rates higher for longer than anticipated.
Of course, Fed Chair Powell told us yesterday that he "doesn't see the stag or the flation" in US data...
Maybe he needs to subscribe to ZeroHedge to see the real picture.
Tyler Durden Thu, 05/02/2024 - 09:05As I’ve written about before, that “new” vs. “renewal” rent growth gap has been observed by publicly-traded companies that are in the residential rental business.There is much more in the article.
On that score, here are some data from Invitation Homes quarterly earnings supplement on rent growth trends.
Note that while rent increases on new leases were extremely low over the last two quarter, rents on renewals, while down from 2022, were still rising at a relatively rapid pace.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $69.4 billion in March, down $0.1 billion from $69.5 billion in February, revised.
March exports were $257.6 billion, $5.3 billion less than February exports. March imports were $327.0 billion, $5.4 billion less than February imports.
emphasis added
Click on graph for larger image.
The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.Authored by David Harsanyi via The Epoch Times (emphasis ours),
“I condemn the anti-Semitic protests ...” President Joe Biden told reporters after days of anti-Jewish demonstrations at Columbia University and other Ivy League schools. “I also condemn those who don’t understand what’s going on with the Palestinians ...”
President Joe Biden speaks during the White House Correspondents' Association (WHCA) dinner at the Washington Hilton, in Washington on April 27, 2024. (Brendan Smialowski/AFP via Getty Images)
Any morally clearheaded American already has a very good idea of what’s going on. Biden is bothsidesing the actions of keffiyeh-wearing terror cheerleaders on Columbia’s Gaza Quad—who target American Jews who have absolutely no bearing on Israel’s actions—with those who refuse to accept the blood libel of “genocide” in Gaza. It is the kind of odious moral relativism one expects to hear from a “Squad” member or clout-chasing far-right “influencer,” not the president.
Hamas, the governing authority in an autonomous Gaza—still supported widely by the Palestinian people—flooded over the border on Oct. 7, 2023, raping, murdering, and kidnapping more than a thousand men, women, and children in Israel, including American citizens. Afterward, Hamas retreated and hid among civilians to generate as many Palestinian martyrs as possible. The Israelis retaliated against this nihilistic death cult, keeping the civilian-to-combatant casualty ratio lower than perhaps any other instance of modern urban warfare.
That’s what’s going on. But because a not-insignificant contingent on the contemporary left is now both anti-Semitic and anti-“colonialist,” the president demanded Israel stop before the job was done. And he is willing to sell out a longtime ally and forsake the lives of American hostages to try to entice the votes in Jew-hating enclaves like Dearborn, Michigan, Yale University, and The Washington Post newsroom.
A number of people have pointed out the similarities between Biden’s condemnations and former President Donald Trump’s post-Charlottesville, Virginia, march “very fine people” comment. It’s a good gotcha. After all, Biden has risibly claimed that Trump’s comments impelled him to run for president (for the third time).
There is, however, a key difference. Trump’s garbled line was almost surely not aimed at tiki-torch neo-Nazis. Believe what you like about Trump’s motivations, but he also later unequivocally condemned the white supremacists on more than one occasion. Biden, on the other hand, can’t even get himself to call out brownshirts without throwing them a bone.
Also, incidentally, unlike the nuts in Virginia, these people will be working at our top law firms, in media organizations and in the State Department. Oh, the president also wants you to pay their loans.
Earlier, The Washington Post, like most outlets, claimed that “Biden denounces antisemitism on college campuses amid Yale, Columbia protests.” While technically true, the framing ignores the president’s equivocation. The denouncement was a pro forma White House Passover press release that spent as much space prattling on about a two-state solution as it did the “protests.” For comparison, Biden’s Ramadan press release noted the “terrible suffering on the Palestinian people,” repeated fake Hamas causality numbers and condemned “Islamophobia,” but said nothing about the widespread outbreak of anti-Semitism.
Then again, Democrats are increasingly incapable of even talking about anti-Semitism without diluting any condemnation with mention of “Islamophobia.”
You might recall a few years back a certain Democratic congresswoman was going on about “Benjamin”-grubbing rootless cosmopolitans hypnotizing the world for their evil. After a handful of Jewish Democrats complained about her rhetoric, then-House Speaker Nancy Pelosi finally agreed to pass a resolution condemning Rep. Ilhan Omar. By the end of debate, of course, the resolution was teeming with platitudes and condemnations of a rainbow of thought crimes, with references to Alfred Dreyfus, Leo Frank, Henry Ford, and “anti-Muslim bigotry,” but not Omar.
“We all have a responsibility to speak out against anti-Semitism, Islamophobia, homophobia, transphobia, racism, and all forms of hatred and bigotry, especially as we see a spike in hate crimes in America,” is how Sen. Kamala Harris whitewashed the rising anti-Jewish pronouncements of her party. Which is to say, for years now, Democrats have been downplaying anti-Semitism as it creeped into college campuses, Congress, the Women’s March, Black Lives Matter, and now the mainstream.
And now, here we are. We have a president who can’t make a moral distinction between bigots and their targets.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.
Tyler Durden Thu, 05/02/2024 - 08:45With WARNs high, JOLTS data tumbling - led construction jobs collapsing, and Challenger-Grey layoffs remarkably elevated, why would anyone question the government's official data on jobless claims - that continues to languish (in a good way) near record lows.
Last week saw 208,000 Americans file for jobless benefits for the first time (the same as the prior week), basically flat for the last three years...
Source: Bloomberg
In the real world labor market, 2024 has been a shitshow of layoffs...
1. Everybuddy: 100% of workforce
2. Wisense: 100% of workforce
3. CodeSee: 100% of workforce
4. Twig: 100% of workforce
5. Twitch: 35% of workforce
6. Roomba: 31% of workforce
7. Bumble: 30% of workforce
8. Farfetch: 25% of workforce
9. Away: 25% of workforce
10. Hasbro: 20% of workforce
11. LA Times: 20% of workforce
12. Wint Wealth: 20% of workforce
13. Finder: 17% of workforce
14. Spotify: 17% of workforce
15. Buzzfeed: 16% of workforce
16. Levi's: 15% of workforce
17. Xerox: 15% of workforce
18. Qualtrics: 14% of workforce
19. Wayfair: 13% of workforce
20. Duolingo: 10% of workforce
21. Rivian: 10% of workforce
22. Washington Post: 10% of workforce
23. Snap: 10% of workforce
24. eBay: 9% of workforce
25. Sony Interactive: 8% of workforce
26. Expedia: 8% of workforce
27. Business Insider: 8% of workforce
28. Instacart: 7% of workforce
29. Paypal: 7% of workforce
30. Okta: 7% of workforce
31. Charles Schwab: 6% of workforce
32. Docusign: 6% of workforce
33. Riskified: 6% of workforce
34. EA: 5% of workforce
35. Motional: 5% of workforce
36. Mozilla: 5% of workforce
37. Vacasa: 5% of workforce
38. CISCO: 5% of workforce
39. UPS: 2% of workforce
40. Nike: 2% of workforce
41. Blackrock: 3% of workforce
42. Paramount: 3% of workforce
43. Citigroup: 20,000 employees
44. ThyssenKrupp: 5,000 employees
45. Best Buy: 3,500 employees
46. Barry Callebaut: 2,500 employees
47. Outback Steakhouse: 1,000
48. Northrop Grumman: 1,000 employees
49. Pixar: 1,300 employees
50. Perrigo: 500 employees
51. Tesla: 10% of workforce
Under the hood, California and Massachusetts were the big outliers to the downside (taking New Jersey's place in the hall of fame of made-up data)...
Continuing claims - according to the government - were also flat week on week at 1.774 million Americans, having gone practically nowhere for a year...
Spot the odd one out... (or spot the government-supplied data)...
Source: Bloomberg
Ah, Bidenomics!!
If Trump wins in November, will all this data suddenly be 'allowed' to reflect reality?
Tyler Durden Thu, 05/02/2024 - 08:36In the week ending April 27, the advance figure for seasonally adjusted initial claims was 208,000, unchanged from the previous week's revised level. The previous week's level was revised up by 1,000 from 207,000 to 208,000. The 4-week moving average was 210,000, a decrease of 3,500 from the previous week's revised average. The previous week's average was revised up by 250 from 213,250 to 213,500.The following graph shows the 4-week moving average of weekly claims since 1971.
emphasis added
Click on graph for larger image.
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