Goosing US jobs data, before it gets cooked next month!

Now that’s a surprise, an upbeat job growth (gu)estimate released by BIS, in its last update before the November elections. One might almost think they are trying to apply some lipstick to ‘Bidenomics’ to avoid the prospect of their own jobs being culled by that prospective DOGE grim reaper, Elon Musk. What may be less addressed however, is the other side of this ‘upbeat’ monthly net private sector employment advance of +160k (underlying, excluding changes in seasonal adjustments), that being the $380bn increase in US public debt last month. For those struggling with the scale of naughts, that’s almost $2.4m per additional job. Clearly, a clown show!

Unfortunately, when so many have their snouts pressed into the deficit trough, the headlines from today’s Non-Farm Payroll figures will focus on the relative strength of the reported net employment growth and the slightly above inflation increase in average hourly wages. Some may even suggest that the strength in economic activity this implies could limit the extent of further interest rate cuts by the Fed, when in reality this will be determined by the relative competition for all the debt that has to be raised to fund this deficits. The bulls will no doubt hope that these debts and deficits can be magicked away with more money printing, while paying off increasingly militant public sector unions with more inflation busting/causing wage settlements. Those not wishing a return of Arthur Burns and a stagflationary spiral however, might herald some medicine at next months election, albeit a return to living within ones means will not come without some pain in terms of initial consumption.

Looking at the various industry categories meanwhile, there’s not a lot to be alarmed at, with the recent rate cut seemingly stimulating construction activity, notwithstanding most mortgages are based on Treasury 10 year yields, which have barely moved.

The fiction meanwhile carries thru to average hourly wages, which in September were estimated to remain solidly above +4% and this before any potential +50% increase for the Longshoremen (dockers), where negotiations have been deferred until after the election.