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TDR’s U.S. Stock Market Preview For The Week Of October 24, 2022

A weekly stock market preview and the data that will impact the tape. Sunday Evening Futures Weekend News And Developments 9 out of 10 schools will have…

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A weekly stock market preview and the data that will impact the tape.

Sunday Evening Futures

Weekend News And Developments

9 out of 10 schools will have run out of money by the next school year due to the cost-of-living crisis, the National Association of Head Teachers is warning the Government.

Canadian Pacific (TSX: CP) (NYSE: CP) said it would appeal a decision issued by the Court of King’s Bench in the case of Remington Development Corporation v Canadian Pacific Railway Company and His Majesty the King in Right of Alberta, as represented by the Minister of Infrastructure and the Minister of Transportation.

Credit Suisse is considering a capital increase of around 2 billion Swiss francs ($2 billion) and the issue of convertible debt to help finance its turnaround plans, Swiss paper SonntagsZeitung reported, citing unnamed sources.

DNB, the financial services giant, loaded up on shares of firm Nvidia and electric-vehicle maker Rivian in the third quarter. It cut stock market investments in Ford and General Motors.

Elon Musk said in a tweet on Sunday pushed back by a month the date for Neuralink’s “show & tell” event to Nov. 30 and did not provide further information.

Former U.K. Bank of England governor, Mervyn King, sees significantly higher taxes on the average person would be needed to finance higher public spending in the country.

Goldman Sachs Chief Executive David Solomon and his executives sparred over the strategy of the bank’s consumer banking business, before a retreat for the Marcus division was announced last week, the Financial Times reported on Sunday.

Hu Jintao, China’s former top leader, was unexpectedly led out of Saturday’s closing ceremony of the Communist Party Congress, in a moment of drama during what is typically a highly choreographed event.

Kuwait Airways, the state-owned carrier which hasn’t made a profit in more than 30 years, expects losses this year of as much as 60 million dinars ($193 million), and to break even in the 2024 fiscal year.

Kuwait Airways has received 18 aircraft from Airbus out of an order for 31, the state carrier’s chairman said on Sunday.

Mediterranean Shipping Co.: The shipping giant will buy Italy’s Rimorchiatori Mediterranei SpA, according to an emailed statement on Sunday. Deal terms weren’t disclosed.

Merck (NYSE:MRK) announced the presentation of findings from a Phase 3 clinical trial that assessed safety and efficacy of PREVYMIS (letermovir) compared to valganciclovir for cytomegalovirus (CMV) prophylaxis in 601 adult kidney transplant recipients at high risk for CMV disease (D+/R-).

Meta Platforms has warned Canada it is prepared to block the sharing of Canadian news content—like it did in Australia last year—unless the Liberal government amends legislation that would compel big digital companies to compensate domestic media outlets.

Midterm elections: Americans favored the Republican Party over Democrats on the economy in an ABC News/Ipsos poll, maintaining the GOP’s advantage on the issue heading into the Nov. 8.

Prediction markets currently anticipate GOP control of the Senate following Nov. 8 midterm election

Nigeria’s bonds sank to near record lows in October as the finance minister failed to calm investor nerves after unintentionally implying the government may ask for a haircut on its debt. 

Och-Ziff “deteriorated” under the “mismanagement” of its founder Daniel Och, forcing those who succeeded him to spend years stabilizing the Wall Street firm, the company said in court filings

Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT), announced detailed results from an investigational Phase 2 study evaluating the efficacy of vonoprazan in non-erosive gastroesophageal reflux disease (NERD) and other data will be presented at the American College of Gastroenterology 2022 Annual Scientific Meeting.

Rishi Sunak gained momentum in the race to become UK prime minister, securing the public backing of senior Conservative Party lawmakers ahead of an initial leadership vote on Monday and putting pressure on Boris Johnson to declare his hand.

Saudi Arabia’s crown prince on Sunday launched an initiative to attract investments in supply chains to and from the kingdom, with an aim of raising an initial 40 billion riyals ($10.64 billion).

Sharing of technology has emerged as a sticking point between Renault SA and Nissan Motor Co Ltd as the pair negotiate an overhaul of their decades-old partnership, two people familiar with discussions told Reuters.

Shell Plc is investing in Qatar’s latest liquefied natural gas development, months after buying into another of the Gulf nation’s expansion projects.

Slovenians are voting Sunday for a new president who may consolidate the position of the left-leaning government or give ousted nationalist leader Janez Jansa an opening to exert his influence on the euro zone state.

South Korea’s government will expand its corporate bond-buying program among other liquidity supply measures amid growing worries about a credit crunch in bond and short-term money markets.

U.K. can’t shake pound negativity after weeks of political chaos.

Ukraine’s Security Service said it detained executives from the aviation company Motor Sich PJSC in what authorities called an investigation into collaboration with Moscow.

United Airlines EVP and chief growth officer Gregory Hart disclosed the sale of 30,000 common shares of the company on October 20 at a price of $39.5426 per share.

U.S. travel industry expects this holiday season to be busy enough to make last summer’s turmoil seem orderly.

Source: Statista

U.S. Centers for Disease Control and Prevention director Rochelle Walensky has tested positive for COVID-19.

Viridian Therapeutics, Inc. (NASDAQ:VRDN), presented positive proof-of-concept data from the 10 mg/kg cohort in its ongoing Phase 1/2 clinical trial of VRDN-001, an anti-IGF-1R antibody, in patients with active thyroid eye disease. 

Warner Bros. latest DC Extended Universe film “Black Adam” tallied $67 million at the domestic box office during its opening weekend.

What The Analysts Are Saying…

“As we start to see the economy come around, we’re going to see the investment in bitcoin rise and subsequently the price. We could see legislation signed into law before the end of the year.” — Kristin Smith, Executive Director of the Blockchain Association

“Many indicators suggest we are near a short-term market bottom and a reflexive rally remains likely as we move toward year-end. Notably, next week will mark the end of the “stock buyback blackout” period. Such could provide as much as $4.5 billion in a daily bid to markets as corporations return to repurchases.” Lance Roberts realinvestmentadvice.com

“You’ll see a lot of discounts, but a lot of those discounts will be year-over-year based on higher regular prices because of inflation. My hypothesis is that consumers will start [holiday shopping] early and they are going to pick out really discounted items.” Bruce Winder, consumer retail analyst

What We’re Watching

Americas: US Q3 GDP, PMI, PCE prices and durable goods orders, Canada and Brazil interest rate decisions

October’s flash PMIs will be watched to gauge economic performance at the start of the fourth quarter. Recent US survey data have alluded to weakening economic performance amid high prices and tightening financial conditions. While third quarter GDP data will likely signal robust growth, with the consensus expecting a 2% annualized uptick, US house price and homes sales data will be eagerly assessed amid concerns over the impact of rising interest rates, as will consumer confidence numbers. Also watch out for retail inventories, PCE price data and trade numbers plus durable goods orders.

Central Banks globally are raising interest rates in an effort to quell high inflation and stock market pressures

In Canada, the central bank will convene where a 50 bp hike is priced in by markets. The BoC has already hiked rates by 300 basis points this year, and many are expecting interest rates to hit 4.5% next year. —IHS Markit

Stock Market Tech Bellweather Apple Reports

Apple (AAPL $144.01) report earnings after Thursday’s close, with the iPhone maker set to release its fiscal fourth-quarter results. Morgan Stanley analyst Erik Woodring (Overweight, the equivalent of Buy) says the setup for AAPL’s September quarter report is constructive due to several factors. These include “remarkably stable” iPhone, iPad and Mac production, as well as higher average selling prices (ASPs) for iPhones, which should offset headwinds from unfavorable foreign exchange. 

Apple earnings trend remains up after all of these years. Source: macrotrends.net

CFRA Research analyst Angelo Zino (Buy) echoes that view, telling clients that Apple will benefit from “a strong start to the iPhone 14 cycle.” Although the analyst concedes that iPhone 14 momentum will likely ease over the next few quarters as the cycle runs its course, “we think the combination of greater Services revenue and an attractive hardware pipeline will continue to drive higher free cash flow and share price appreciation in the coming years.”

For AAPL’s fiscal Q4, analysts, on average, expect earnings of $1.27 per share (+2.4% YoY) and revenue of $88.9 billion (+6.6% YoY). — Kiplinger

U.S. Economic Calendar

TIME (ET)REPORTPERIODMEDIAN FORECASTPREVIOUS
Monday, October 24
8:30 AMChicago Fed national activity indexSept.0
9:45 AMS&P U.S. manufacturing PMIOct.51.852
9:45 AMS&P U.S. services PMIOct.49.749.5
Tuesday, Oct. 25
9:00 AMS&P Case-Shiller U.S. home price index (SAAR)Aug.-2.90%
9:00 AMFHFA U.S. home price index (SAAR)Aug.-6.90%
10:00 AMConsumer confidence indexOct.105.3108
Wednesday, Oct. 26
8:30 AMTrade in goods (advance)Sept.-$87.3 billion
10:00 AMNew home sales (SAAR)Sept.588,000685,000
Thursday, Oct. 27
8:30 AMReal gross domestic product, first estimate (SAAR)Q32.40%-0.60%
8:30 AMReal final sales to domestic purchasers, first estimate (SAAR)Q30.20%
8:30 AMInitial jobless claimsOct. 22214,000
8:30 AMContinuing jobless claimsOct. 151.39 million
8:30 AMDurable goods ordersSept.0.00%-0.20%
8:30 AMCore capital equipment ordersSept.1.40%
Friday, Oct. 28
8:30 AMEmployment cost index (SAAR)Q34.80%5.40%
8:30 AMPCE price indexSept.0.30%
8:30 AMCore PCE price indexSept.0.40%0.60%
8:30 AMPCE price index (12-month change)Sept.6.30%
8:30 AMCore PCE price index (12-month change)Sept.5.20%4.90%
8:30 AMPCE price index (3-month SAAR)Sept.4.70%
8:30 AMCore PCE price index (3-month SAAR)Sept.5.00%
8:30 AMReal disposable income (SAAR)Sept.0.90%
8:30 AMReal consumer spendingSept.1.20%
10:00 AMUMich consumer sentiment index (late)Oct.59.859.8
10:00 AMUMich consumer 5-year inflation expectations (late)Oct.2.90%
10:00 AMPending home sales indexSept.-2.00%

Meme Of The Week

Key Earnings (US Markets)

CompanySymbolEarnings estimate
Monday, Oct. 24AGNC InvestmentAGNC$0.69 per share
Bank of HawaiiBOH$1.42
Cadence DesignCDNS$0.96
CraneCR$1.85
Discover Financial ServicesDFS$3.54
Logitech InternationalLOGI$0.63
Packaging Corp. of AmericaPKG$2.81
PotlatchDelticPCH$0.64
Range ResourcesRRC$0.52
Schnitzer SteelSCHN$1.81
Zions BancorpZION$1.59
Tuesday, October 253MMMM$2.59 per share
AgilysysAGYS$0.18
AlphabetGOOG$1.26
Archer-Daniels-MidlandADM$1.39
Axalta Coating SystemsAXTA$0.39
BiogenBIIB$4.11
Boyd GamingBYD$1.33
Cleveland-CliffsCLF$0.51
ChemoursCC$1.07
Chipotle Mexican GrillCMG$9.19
ChubbCB$2.61
Coca-ColaKO$0.64
CorningGLW$0.51
Enphase EnergyENPH$1.09
F5 NetworksFFIV$2.52
General ElectricGE$0.49
General MotorsGM$1.89
HalliburtonHAL$0.56
Illinois Tool WorksITW$2.26
JetBlue AirwaysJBLU$0.24
Juniper NetworksJNPR$0.50
Kimberly-ClarkKMB$1.45
MattelMAT$0.74
MicrosoftMSFT$2.31
NVRNVR$121.71
PulteGroupPHM$2.82
Raytheon TechnologiesRTX$1.14
Sherwin-WilliamsSHW$2.58
Skechers USASKX$0.73
SpotifySPOT-$0.86
Texas InstrumentsTXN$2.42
UPSUPS$2.85
Valero EnergyVLO$7.01
VisaV$1.86
Wyndham Hotels & ResortsWH$1.03
Wednesday, October 26Agnico-Eagle MinesAEM$0.44 per share
Automatic DataADP$1.79
BoeingBA$0.09
Boot Barn HoldingsBOOT$0.90
Boston ScientificBSX$1.83
Bristol Myers SquibbBMY$1.91
Churchill DownsCHDN$1.48
CourseraCOUR-$0.11
Digital Realty TrustDLR$1.68
Ford MotorF$0.30
GarminGRMN$1.12
General DynamicsGD$3.16
Harley-DavidsonHOG$1.39
Hilton Worldwide HoldingsHLT$1.23
KLA CorporationKLAC$6.23
Kraft HeinzKHC$0.56
Lending ClubLC$0.32
MascoMAS$1.06
Meta PlatformsMETA$1.86
Norfolk SouthernNSC$3.60
OlinOLN$1.82
O’Reilly AutomotiveORLY$8.48
Owens CorningOC$3.20
Patterson-UTIPTEN$0.17
Pilgrim’s PridePPC$0.78
Ryder SystemR$3.66
Seagate TechnologySTX$0.72
ServiceNowNOW$1.85
Spirit AirlinesSAVE$0.08
Thermo Fisher ScientificTMO$4.82
UpworkUPWK-$0.08
V.F. CorpVFC$0.73
Waste ManagementWM$1.51
WingstopWING$0.36
Thursday, Oct. 27AltriaMO$1.30 per share
AmazonAMZN$0.22
American TowerAMT$2.58
Anheuser-Busch InBevBUD$0.74
AppleAAPL$1.27
Ares ManagementARES$0.49
AutoNationAN$6.15
BorgWarnerBWA$1.03
CaterpillarCAT$3.16
Capital OneCOF$5.04
CohuCOHU$0.68
ComcastCMCSA$0.90
CubeSmartCUBE$0.65
Deckers OutdoorDECK$3.65
DexcomDXCM$0.24
Eastman ChemicalEMN$2.00
First SolarFSLR-$0.26
FiservFISV$1.70
Gaming and Leisure PropertiesGLPI$0.85
Gilead SciencesGILD$1.48
Hertz GlobalHTZ$1.11
HoneywellHON$2.15
IntelINTC$0.33
International PaperIP$1.20
Keurig Dr PepperKDP$0.46
Laboratory Corp. of AmericaLH$4.69
LindeLIN$2.93
MastercardMA$2.57
McDonald’sMCD$2.58
MerckMRK$1.72
Northrop GrummanNOC$6.11
OshkoshOSK$1.19
Overstock.comOSTK$0.11
PinterestPINS$0.06
Royal CaribbeanRCL$0.17
S&P GlobalSPGI$2.82
ShopifySHOP-$0.07
SouthernSO$1.33
Southwest AirLUV$0.42
Stanley Black & DeckerSWK$0.70
STMicroelectronicsSTM$1.03
T. Rowe PriceTROW$1.94
TwitterTWTR$0.02
T-Mobile USTMUS$0.50
U.S. SteelX$1.99
VeriSignVRSN$1.54
WeyerhaeuserWY$0.38
Western DigitalWDC$0.44
Willis Towers WatsonWTW$2.13
Yamana GoldAUY$0.05
Friday, Oct. 28AbbVieABBV$3.55 per share
AllianceBernsteinAB$0.59
AonAON$1.99
Arbor Realty TrustABR$0.45
Bloomin’ BrandsBLMN$0.34
Chart IndustriesGTLS$1.30
Colgate-PalmoliveCL$0.73
Exxon MobilXOM$3.79
GraingerGWW$7.26
LyondellBasellLYB$2.95
Newell BrandsNWL$0.47
NextEra EnergyNEE$0.79
NextEra Energy PartnersNEP$0.71
SanofiSNY$2.65
Source: CNN Business – TDR’s stock market preview sentiment indicator

Past Week What’s Hot… and What’s Not

Source: TradingView – TDR’ stock market preview what’s hot this past week

Top 12 High Short Interest Stocks

TickerCompanyExchangeShortIntFloatS/OIndustry
BBBYBed Bath & Beyond Inc.Nasdaq39.88%76.43M80.36MRetail (Specialty Non-Apparel)
BYNDBeyond Meat IncNasdaq39.52%56.91M63.67MFood Processing
UPSTUpstart Holdings IncNasdaq38.23%68.88M81.35MConsumer Lending
MSTRMicroStrategy IncNasdaq35.80%9.33M9.34MSoftware & Programming
BIGBig Lots, Inc.NYSE33.67%26.52M28.94MRetailers – Discount Stores
CVNACarvana CoNYSE32.88%95.21M105.80MRetail (Specialty Non-Apparel)
HRTXHeron Therapeutics IncNasdaq32.65%102.38M102.14MBiotechnology & Medical Research
EVGOEvgo IncNasdaq31.61%67.70M69.08MUtilities – Electric
BGFVBig 5 Sporting Goods CorpNasdaq30.40%20.69M22.18MRetailers – Miscellaneous Specialty
FFIEFaraday Future Intelligent EleNasdaq30.09%144.55M263.91MAuto & Truck Manufacturers
IBRXImmunitybio IncNasdaq29.83%82.87M400.30MBiotechnology & Medical Research
NKLANikola CorporationNasdaq29.65%279.44M433.48MAuto & Truck Manufacturers
Source: highshortinterest.com (data as of October 17) – TDR’s stock market preview, Top 12 High Short Interest Stocks

Tags: stock market preview, stock market preview October 24, 2022

The post TDR’s U.S. Stock Market Preview For The Week Of October 24, 2022 appeared first on The Dales Report.

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

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Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January…

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

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