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Week Ahead: Has the US economic boom been mostly priced in?

Vaccine rollout success in the US has Wall Street quickly pricing in rapid growth during the recovery stage.  The trend in daily new cases is rising in the US but the successful vaccine rollout will make any sharp accelerations short-lived.  The Biden…

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Vaccine rollout success in the US has Wall Street quickly pricing in rapid growth during the recovery stage.  The trend in daily new cases is rising in the US but the successful vaccine rollout will make any sharp accelerations short-lived.  The Biden administration is vaccinating 1.2% of all adults per day and that should make it very easy to hit the new goal of delivering 200 million COVID shots in hisfirst 100 days.    Economic data is starting to get better in the US as jobless claims declined to a pandemic low.  The country is about to quickly reopen, and the economy could run even hotter if Biden is able to deliver infrastructure spending this year.

Investors are prepared for some hot inflation prints but if expectations grow that the acceleration will last more than a few months, global bond yields could surge.

The upcoming week should be less busy with traders focusing on China’s PMI data, an important OPEC+ meeting on output, and the US nonfarm payroll report.

Biden will unveil his multi-trillion dollar plan to rebuild America’s infrastructure

China’s PMI data is expected to show the recovery is intact.

Will OPEC+ maintain output in May or can they deliver another surprise?

Country

US

Now that President Biden has doubled his vaccination goal for his first 100 days, expectations are growing that the economy could run even hotter this summer.  COVID cases are starting to trend higher in the US but the risk for a major reversal with the reopening theme seems unlikely.  The US is vaccinating around 2.5 million Americans a day, which is about 1.2% of all adults per day.

Some soft inflation data has helped provide a steading US Treasury yield curve and that has brought some calm to financial markets.  The focus for the upcoming week will be primarily on the labor market.  Now that some states have fully reopened, the nonfarm payroll is expected to post the strongest job increase in months.  Traders are expecting to see 628,000 jobs created in March, a significant increase to the 379,000 positions filled in February.

Much attention will also remain with the Biden administration’s effort to move forward with his legislative agenda.  On Wednesday, President Joe Biden will unveil his multitrillion-dollar infrastructure plan in Pittsburgh.  If Wall Street becomes optimistic that Biden might have a chance to win over enough Republicans, GDP growth forecasts could massively get upgraded.

EU

The vaccine rollout in the EU has gone poorly, prompting EU officials to threaten to halt export shipments of AstraZeneca vaccines. The bloc has blamed AstraZeneca for failing to deliver on promised doses, but critics charge that the EU is demonstrating ‘vaccine nationalism’. The EU threat to halt vaccine deliveries to the UK has damaged relations between the two sides and weighed on the British pound.

The vaccine crisis overshadowed the EU Summit on Thursday. EU leaders stopped short of a ban on vaccine exports but agreed to toughen export controls and called on AstraZeneca to “catch up” on its deliveries to Europe.

On the fundamental front, manufacturing remains a bright spot in the eurozone economy, highlighted by Germany, which showed strong growth in February with a read of 66.6. The second-estimate PMIs are expected to confirm the initial readings and show manufacturing growth throughout the bloc.

In Germany, retail sales were dismal in January, coming in at -4.5% MoM and -8.7% YoY. The February data is expected to improve, with a street consensus of +2.0% MoM and -4.9% YoY. Unemployment surprised in January with a read of +9 thousand, its first rise in seven months. This was considerably worse than the forecast of -9 thousand. The February estimate stands at -1 thousand.

UK

The British government has set up a timetable to gradually lift health restrictions and the “stay at home” order should be lifted on March 29th. However, working from home is encouraged and many restrictions remain in place.

UK Mortgage Approvals have been slowing and fell below the 100K level in January, dropping from 103 thousand to 99 thousand. The February data will be released on Monday.

The UK will release Final GDP for Q4 of 2o20 on Wednesday and the final PMI readings on Thursday.  The majority of the focus will be on strongly the economic activity picks up following he end of many pandemic restrictions.

Emerging Markets

Turkey

Global currency markets were rocked last week as the Turkish lira plummeted 15 per cent on Monday and fell close to its all-time low. The lira sank after Turkish President Erdogan fired the Governor of the Turkish Central Bank, Naci Agbal. The currency managed to recoup half of its losses after the country’s finance minister pledged that Turkey would adhere to free-market rules, but the potential for lira weakness to accelerate in Turkey’s toxic political environment remains a strong possibility.

Poland

Poland, which is the European Union’s largest eastern member, saw its currency fall to its lowest level since 2009. The Polish zloty fell 0.2% in early Friday to 4.6433 per euro. The zloty has declined by 2.6% in March, making it the second-worst performer in the emerging markets after the Turkish lira.

The EUR/PLN trade is becoming overcrowded, as concerns are growing that the worsening Covid pandemic will hamper Poland’s economic recovery and put a strain on the budget.

China

China releases Industrial Profits on Sunday which should signal whether the official and Caixin Manufacturing and Services PMI’s on Wednesday and Thursday will outperform. A weak number will pressure Asian equity markets on Monday morning. Likewise a downside miss on the PMI’s is likely to weigh more heavily on China equities than upside from a positive print.

China’s “national team” intervened in Mainland stock markets on Thursday sharply reversing a 2.5% slump. However both the Shanghai Composite and CSI 300 are in bearish correction territory. The government backstop threatens to make further downside more painful if it does not appear in force on each dip. If US markets also correct this may become problematic for authorities.

China’s tech crackdown has spread to Tencent and threatens to envelop other major players. Along with geopolitical tensions, especially delisting threats from the US, any rallies in China tech heavyweights will remain limited. China appears to also be threatening boycotts of major Western companies in China that move production from Xinjiang or implicitly criticise the government. That may spook foreign investors.

The Yuan has remained stable just above 6.5000, limiting the contagion of higher US rates and the Dollar in China and Asian EM as a whole.

India

Covid-19 cases are spiraling again in parts of India with the government allegedly bringing in an unofficial vaccine export ban. (India is the world’s largest vaccine producer) Both headlines should weigh on Indian equities which have struggled this week even as the INR shows surprising strength on foreign inflows. If Covid-19 cases rapidly increase from here, that may weigh on oil prices with India the 3rd largest importer.

India releases Q4 External Debt on Monday. As one of the countries most exposed to US Dollar strength, a sharp rise may spook investors. March Balance of Trade on Thursday is expected to improve slightly although higher oil prices will continue to erode it.

The INR has proven invulnerable to US Dollar strength although the Sensex ends the week 3.0% lower. With India forex reserves climbing to the 4th highest in the world, markets appear reluctant to sell the INR and test the RBI. Reserves data on Friday may show an even larger accumulation, limiting short-term INR downside. But a deeper US bond selloff next week (perhaps after Biden announces initial infrastructure package details) leaves both the INR and Indian equity markets vulnerable to an EM taper tantrum.

India remains one of the most vulnerable countries to rising US yields and commodity prices due to its weak current account and foreign currency denominated debt.

Australia & New Zealand

The New Zealand Dollar plunged after surprise government property price control measures took any immediate threat of RBNZ tightening of the table. Fragile risk sentiment and a firm greenback eroded both AUD and NZD and the technical picture on both is in firm downside correction territory.

Australian equities are treading water with steeper yield curves and firm commodity prices supporting banks and resources but weighing on other sectors. The technical charts show the ASX 200 in danger of joining the All Ordinaries in downside correction territory. Both are vulnerable to a weaker Wall Street next week.

New Zealand has no significant data, but Australia releases its Trade Balance, Retail Sales and Home Loans on Thursday. Although likely overshadowed by US Non-Farms on Friday, they should all show the strong recovery continues in Australia but are unlikely to be enough to support equities if external forces are strongly negative.

Japan

Japan has a heavy data release schedule in the coming week. The highlights being Retail Sales on Tuesday, Industrial production Wednesday and the Tankan report on Thursday. It should show an improving manufacturing picture, while highlighting domestic demand remaining soft. That picture is unlikely to change with Japan announcing that no foreign visitors will be allowed for the Olympics.

The Bank of Japan has decided to stop buying Nikkei 224-linked ETFs, concentrating on Topix related ones. That has weighed on Nikkei 225 sentiment with volatile intraday trading as it follows US markets in the past week. The technical picture remains negative with failure 28,300.00 heralding another large move lower.

Watch the 10-year JGB auction on Thursday. This is the first major one after the BoJ also announced a wider trading band for JGB’s. A weak result, with a higher than expected yield will negatively impact local equities. Perversely, it may also spur Yen strength on repatriation flows.

Markets

Oil

Energy markets will remain fixated over the Suez Canal blockage and if OPEC+ has any surprise production cuts in store for next week’s meeting.  The uncertainty over how long it will take to dislodge the massive cargo ship will continue to weigh on oil prices.  The situation could be resolved when tide picks up over the coming days or it could take weeks.  One growing risk is that since the vessel is hung up on bags, if too much stress is relieved at the ends, the hull could crack and lead to an oil spill and worse closing the canal for months.

The upcoming OPEC+ meeting should be a validation of the cautious stance in ramping up output in the coming months.  Expectations are for production to remain unchanged, but given the rise in global cases, a small surprise cut should not be ruled out.  The emerging market and European Covid vaccine rollouts will likely lead to a much slower pickup in demand over the next couple of months.

Gold

Gold is stuck in limbo until we get a much better outlook for inflationary pressures, which will also determine investors’ outlook for global bond yields.  The stronger dollar that has been a drag for gold prices remains in place but could be ending soon.  Gold ETF selling has been relentless but is showing some signs of slowing down.

Bitcoin

Bitcoin weakness stemmed from concerns retail interest is fading.  That might not be the case as many traders were focused on the expiration of nearly $6 billion in Bitcoin options.  Many investors closed out positions leading up to the Friday expiry and could be ready to jump back in next week.

Bitcoin volatility is not going away anytime soon, so traders should not be surprised to see 20% swings in both directions over the next few weeks.

 

Key Economic Events

Saturday, March 27

Economic Data/Events:

  • China industrial profits

Sunday, March 28

– Most European clocks advance one hour on Sunday for Daylight Savings Time.

Monday, March 29

-England’s “stay at home” is expected to end today.

-Fed Governor Waller speaks at an event with the Peterson Institute for International Economics.

Economic Data/Events:

  • UK mortgage approvals, money supply
  • Ireland retail sales

Tuesday, March 30

-New York Fed President Williams speaks on “The Role Small Business Plays in Building Financial Resilience for the 50+”

Riksbank Governor Ingves will speak on “Sweden’s role in an internationalized world and the meaning of Sweden being a small open economy”.

Economic Data/Events:

  • US FHFA House Price Index, S&P Case-Shiller House Prices, and Conference Board Consumer Confidence Mar: 96.0 estimate v 91.3 prior
  • Australia building approvals
  • China Mar Manufacturing PMI: 51.2 estimate v 50.6 prior
  • Japan unemployment, retail sales, supermarket sales
  • Australia ANZ Roy Morgan consumer confidence, weekly payroll and wages
  • New Zealand building permits
  • Eurozone economic/consumer confidence
  • Spain Retail sales
  • Poland industrial production, retail sales
  • Mexico international reserves
  • Finland unemployment
  • South Africa money supply, monthly budget balance
  • Spain CPI
  • Poland CPI
  • Germany CPI

Wednesday, March 31

-The Federal Reserve has signaled the emergency SLR exemption will not be extended.

-Official results in Israel’s election are expected to show Netanyahu has no clear path to remain Prime Minister.

Economic Data/Events:

  • Australia retail sales, trade balance, manufacturing PMI, private sector credit, building approvals
  • Unemployment: Brazil, Colombia, Germany, Denmark
  • Chile unemployment, industrial production
  • China PMI
  • UK GDP
  • Denmark GDP
  • Eurozone CPI
  • France CPI
  • Italy CPI
  • Poland (preliminary) CPI
  • Singapore money supply, foreign-currency deposits
  • Thailand BoP, manufacturing production index, capacity utilization
  • India fiscal deficit, eight core industries growth, BoP
  • Japan housing starts, construction orders
  • Hong Kong budget balance, money supply
  • UK Nationwide house prices
  • Australia private sector credit, building approvals
  • New Zealand ANZ business confidence
  • Netherlands retail sales
  • Turkey trade balance, economic confidence
  • Japan industrial production
  • South Africa Trade
  • Thailand Trade
  • EIA Crude Oil Inventory Report

Thursday, April 1

-OPEC+ meets to discuss production levels for May.

-Philadelphia Fed President Harker speaks at a virtual Fintech symposium.

Economic Data/Events:

  • US construction spending, ISM Manufacturing Mar 61.0 estimate v 60.8 prior, initial jobless claims
  • German Retail Sales
  • Czech Republic GDP
  • Russia GDP
  • Manufacturing PMI readings for Eurozone, France, Germany, UK, Thailand
  • Japan vehicle sales, Tankan index, Jibun Bank PMI, monetary base
  • Thailand business sentiment index
  • China Caixin PMI
  • Czech Republic budget
  • Singapore URA private home prices
  • New Zealand ANZ consumer confidence, CoreLogic house prices
  • Australia trade, AiG performance of manufacturing index, Markit PMI, CoreLogic house prices, job vacancies, commodity index
  • South Africa manufacturing PMI
  • Turkey manufacturing PMI

Friday, April 2

– Many banks across Europe will be closed for Good Friday.  SIFMA recommends an early market close in the US for the trading of U.S. dollar-denominated fixed income securities.

Economic Data/Events:

  • US Mar Change in Nonfarm payrolls: 600K estimate av 379K prior; Unemployment Rate: 6.0% estimate v 6.2% prior
  • Japan monetary base
  • Thailand foreign reserves, forward contracts

Sovereign Rating Updates:

– France (S&P)

– Poland (S&P)

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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4 hours ago

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March 9, 2024

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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8 hours ago

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March 9, 2024

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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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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9 hours ago

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March 9, 2024

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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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