I've talked before about my composite index made up of private sector time series. The aim was to provide some sort of indicator while official government data were not being produced due to the shut-down.
Now that the shut-down is over, the BLS has released payrolls data for September, and I've also updated my index with NFIB (small business) components. The next update will be in the first week of December, when more of the component series are released.
The chart below shows my index versus the 3-month change in non-agricultural payrolls. I have only shown the data from the beginning of 2022 onwards, to exclude the huge swings caused by Covid.
I wouldn't be surprised if payrolls continue to barely grow, or even go negative. This is consistent with the steady rise in the unemployment rate. Will this be combined with rising inflation, too? I suspect the answer is yes. That's called "stagflation", and the public doesn't like it (bad for Trump and the Republicans); the markets don't like it (bad news when share markets are so over-extended) and it makes the Fed's job very difficult (easier to make a mistake).
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