The Jobs Report Vs Reality

The economy added 263,000 jobs last month versus 200,000 expected and average hourly earnings increased 0.6% month over month versus 0.3% expected according to the BLS. Apparently the job market is sizzling hot. And yet in the real world Meta, Amazon, Twitter, DoorDash and a myriad of other companies are all laying off employees in the face of a slowing economy. What gives?

The thing to understand is that the jobs report, the CPI and all the other government reports markets obsess about are lagging indicators. For whatever reason their construction is such that they are always behind the reality on the ground. If the Fed has any sense they understand this and should be approaching the terminal rate. If not they may cause a Depression.

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