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Started By
Message
April jobs number 175k, well below 240k estimates. Markets rally
Posted on 5/3/24 at 7:36 am
Posted on 5/3/24 at 7:36 am
LINK
quote:
The U.S. economy added fewer jobs than expected in April, reversing a trend of strong job growth that had kept the Federal Reserve cautious as it looks for signals on when it can start cutting interest rates. Nonfarm payrolls increased by 175,000 on the month, below the 240,000 estimate from the Dow Jones consensus. The unemployment rate ticked higher to 3.9% against expectations it would hold steady at 3.8%.
Posted on 5/3/24 at 7:42 am to slackster
quote:
reversing a trend of strong job growth
LOL, the aforementioned job growth has been in low paid part time jobs. Mostly filled by illegals. We’ve been losing full time jobs for a while now.
Posted on 5/3/24 at 7:44 am to slackster
It's good that we're finally starting to see enough impact to start impacting job numbers, but we need a full summer of this before JPow should even consider a rate cut (ie: September meeting).
Posted on 5/3/24 at 7:49 am to Bard
Finally starting to crack
Rate cuts are back on the menu
Rate cuts are back on the menu
Posted on 5/3/24 at 7:49 am to slackster
And these usually get revised down.
Imagine how bad the real numbers are.
Imagine how bad the real numbers are.
Posted on 5/3/24 at 7:51 am to SDVTiger
quote:
Rate cuts are back on the menu
What is the effect of rate cuts in the face of raging inflation?
Posted on 5/3/24 at 7:53 am to SloaneRanger
quote:
What is the effect of rate cuts in the face of raging inflation?
We are gonna find out especially if the unemployment continues to increase
Posted on 5/3/24 at 8:00 am to SDVTiger
quote:
Rate cuts are back on the menu
Not quite yet, but it's hopeful.
Summertime usually sees a lot of economic activity, the real tell is going to be how GDP plays out over Q2. If it comes in below Q1's growth, the natural assumption would be that inflation comes back down thus cuts could be up for September (June would be too soon and absent an economic crash, there's no way inflation hits the 2% mark by the June meeting). This becomes more likely if inflation has indeed started moving down by the release of the June numbers (August numbers will be out just before the September meeting, if inflation has fallen throughout the summer, a September cut becomes the safe bet).
Posted on 5/3/24 at 8:03 am to Bestbank Tiger
quote:
And these usually get revised down. Imagine how bad the real numbers are.
Downward revisions have been the norm, but March was just revised upward.
Posted on 5/3/24 at 8:04 am to SloaneRanger
quote:
What is the effect of rate cuts in the face of raging inflation?
Define “raging” inflation?
Posted on 5/3/24 at 8:04 am to Bard
Im sticking with them looking at PCE saying its been tamed or dropping, umemployment rising over 4% right before Nov for at least a .25 cut for a big rally before the 4th
Posted on 5/3/24 at 8:08 am to SDVTiger
quote:
We are gonna find out especially if the unemployment continues to increase
Sort of. In our current environment, rising unemployment is a requirement before rates can be cut. Unemployment has to go up so that consumers have less money to spend. Fewer consumers with fewer Dollars to spend means fewer Dollars moving around the economy AND more products sitting on shelves because they are no longer being bought (ie: supply goes up while demand goes down meaning prices go down).
This is the true ground the Fed has been fighting all the debt creation to get to and it's the pain people talk about when talking about getting through this back into a low-inflation and high-growth economy. So Unemployment rising isn't the end that signals that it's time to cut rates, it's just the beginning.
Posted on 5/3/24 at 8:16 am to SDVTiger
quote:
Im sticking with them looking at PCE saying its been tamed or dropping, umemployment rising over 4% right before Nov for at least a .25 cut for a big rally before the 4th
It's a possibility. I think we need Unemployment to hit 5% and with inflation at or below the 2% mark for a couple of months before they should make a cut though. I agree there will likely be a big rally when that happens, my worry is that too much optimism over just a single cut spurs the growth of too much demand and we end up with inflation quickly climbing right back up.
Another side of this is there's a frickton of consumer debt at high interest out there. The time length of prolonged rising unemployment could well pop the consumer credit bubble, causing a domino effect as consumers started filing for bankruptcy en masse. That would make GDP plummet as so much of its growth has been built on debt creation. If anything drags us into a deflationary environment, it would be that sort of scenario and that would be... bad.
This post was edited on 5/3/24 at 8:18 am
Posted on 5/3/24 at 8:17 am to Bard
quote:
I think we need Unemployment to hit 5%
They only need 4.2 to cut
If it hits 5% they will do massive cuts
Posted on 5/3/24 at 8:21 am to Bard
quote:
I think we need Unemployment to hit 5% and with inflation at or below the 2% mark for a couple of months before they should make a cut though
no.
Posted on 5/3/24 at 8:57 am to slackster
I think that you underestimate the length of time it takes for interest rate changes to have an effect on the economy. They need to start cutting 4-6 months before we hit their target numbers or we swing too far the opposite way economically.
They have been waiting on the labor market to move down. One more month of this and start cutting.
They have been waiting on the labor market to move down. One more month of this and start cutting.
Posted on 5/3/24 at 8:57 am to SDVTiger
quote:Look up stagflation
We are gonna find out especially if the unemployment continues to increase
Posted on 5/3/24 at 9:14 am to Maderan
quote:
think that you underestimate the length of time it takes for interest rate changes to have an effect on the economy. They need to start cutting 4-6 months before we hit their target numbers or we swing too far the opposite way economically. They have been waiting on the labor market to move down. One more month of this and start cutting.
That’s why I laughed at waiting until 5% unemployment. By then the pendulum is going the wrong way with momentum.
Posted on 5/3/24 at 9:33 am to llfshoals
quote:
Look up stagflation
We throw this term around far too casually. We’re nowhere near such a phenomenon.
By definition it’s a combination of slowed growth, high unemployment and high inflation.
I’ll admit that growth feels slower despite some numbers being released. Unemployment is still at historic lows. And while our lens to the world tends to be the here and now; from a historical context inflation is not anywhere close to periods of stagflation. The 70’s era UK period that coined the term had years of 25% inflation and interest rates in excess of 15%.
I think many of us have lost sight of the fact that we’ve spent most of our adult lives where interest rates were at unprecedented low levels. Literally free money it seemed.
While the prospect of paying 7-8% on a home loan seems blasphemous to many. Odds are your parents happily refinanced to get that rate 30 years ago.
Not my intent to be argumentative; just find that term is often thrown about in the most sensationalist context.
Posted on 5/3/24 at 9:50 am to SloaneRanger
quote:
reversing a trend of strong job growth
LOL, the aforementioned job growth has been in low paid part time jobs. Mostly filled by illegals. We’ve been losing full time jobs for a while now.
_______
My guess is you are lost. The OT board is a different page. Or Poli board.
reversing a trend of strong job growth
LOL, the aforementioned job growth has been in low paid part time jobs. Mostly filled by illegals. We’ve been losing full time jobs for a while now.
_______
My guess is you are lost. The OT board is a different page. Or Poli board.
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