I remember being a teen in the 70’s and rolling my eyes when my dad would tell me things I didn’t want to hear. He was generally right, which annoyed me even further. I thought he was too conservative, a naysayer, and so often splashed cold water on my blue-sky thoughts.
Well, I feel like I’m turning into my father as I so often report about the downside of our economic forecast and find myself the bearer of bad news. This month’s article will be no exception.
On Friday, August 1st, the July Jobs Numbers were released, and they were dismal. 73K jobs were added nationally, well below expectations. Worse yet is a pattern I’ve come to expect where the numbers are later revised, almost always lower than originally announced. For example, the June numbers, just last month, originally stated 147K jobs were created, which was head-scratching to me, as I’ve seen and heard of nothing but slowing in hiring and constriction of business – particularly manufacturing – so I found them unbelievable. And now they’ve been revised to just 14K new jobs! I can only imagine how bad July numbers will end up once they’re revised next month.
Why the extreme contrast between what is reported initially and what is later revised? It seems good news is shouted from the rooftops, and bad news, like revising good numbers to bad numbers, is whispered quietly a month later. This is not new, nor unique to this administration, although clearly more exaggerated now. This tendency to broadcast good news, watch the stock market wag its tail for a few days, then change numbers is frustrating and adds doubt to the US Department of Labor reporting of such numbers. Is this politically motivated or just chronically bad math?
These are just the initial reports which barely account for the impact of the self-made tariff war the entire world is now facing, and the constant capitulations create much more uncertainty than stability.
In a nutshell, the labor market isn’t just ‘not robust’ but is weak and getting weaker very fast. Our bipolar stock market runs for the exits with every bit of bad news one day and glums on to the good news with great optimism the next.
US News & World Report states, “U.S. hiring is slowing sharply as President Trump’s erratic and radical trade policies paralyze businesses and raise doubts about the outlook for the world’s largest economy.” Geez! That could have been written by my father!
When the stock market rebounded after initially tanking once Trump announced his tariff war, it seemed inevitable that we’d feel it eventually. That time seems to be here and now. Also from US News, “We’re finally in the eye of the hurricane. After months of warning signs, the July jobs report confirms that the slowdown isn’t just approaching – it’s here.”
Hang on to your hats, and more importantly your jobs, as I do not feel this is just a temporary glitch.
I suppose many are rolling their eyes at me as I once did my father. Karma!
