U.S. JOLTS: Job Openings Strengthen While Hiring Falters
The Bureau of Labor Statistics reported that the total job openings rate increased to 4.0% during April and returned to its record high. Despite the increase, the hiring rate fell to 3.5%, its lowest level in 12 months. Improvement in the job openings rate was broad-based. (…)
The number of private-sector hires declined 5.2% (+0.7% y/y) to 4.718 million. Hiring in education & health services fell 10.5% (+2.4% y/y) and reversed the prior month’s increase. Hiring in trade, transportation & utilities fell 7.5% (-2.7% y/y) to the lowest level since January 2014. Factory sector hiring declined 5.2% (+18.9% y/y), and the number of leisure & hospitality jobs fell 3.0% (+0.8% y/y). Professional & business service sector hiring fell 2.5% (-5.6% y/y). Construction sector hiring improved 1.6% (12.8% y/y) and government sector employment rose 1.2% (-5.9% y/y). (…)
The voluntary quit rate is steady at its pre-crisis level while quits keep rising about 7% YoY. Workers are not shy switching jobs.
- Actually, 45% of April’s job openings were in the Accommodation and Food Services industry where actual hirings have been declining fo several months. “Some have speculated that this is a shift away from undocumented labor – perhaps due to new pressures from the Department of Justice.” What’s going to happen when they apply similar pressures in San Diego’s and L.A.’s municipal employees?
Anyway, I am focusing more on actual hires than openings and the hires are flattening.
Now, this is amazing an amazing chart (although I don’t know where and how they get the data):
Source: Deutsche Bank, h/t Tom (via The Daily Shot)
OECD Calls for ECB Taper, Cuts U.S. Growth Forecasts The European Central Bank should wind down its bond purchases in 2018 and raise one of its key interest rates by the end of that year, the Organization for Economic Cooperation and Development said.
(…) The Paris-based research body also cut its economic growth forecasts for the U.S. this year and next, saying stimulative measures it had expected from the Trump administration would now likely be implemented later than it had previously anticipated.
(…) it lowered its forecast for the U.S. economy, and now expects growth this year of 2.1%, down from 2.4% in March. It also lowered its projection for 2018 to 2.4% from 2.8%, reflecting a later start for investment programs and tax changes it had expected from the new administration. (…)
Don’t Count on Deregulation to Save the Trump Trade
(…) Now formerly bullish investors and business leaders are starting to curb their enthusiasm. Tax reform is already getting pushed back to 2018 and possibly later. And the Obamacare replacement plan—as well as the tax cuts that are part of it—is going nowhere fast. At least one GOP senator says a deal is unlikely this year.
If those are off the table, can we at least count on regulatory relief?
To some degree, yes… but we may have already seen most of it. If your investment strategy counts on deregulation to boost stock prices, you might want to reconsider. (…)
The actual order, which you can read right here, says agencies must identify two regulations for repeal for each new one they issue.
Identifying a regulation to repeal is not the same as actually repealing it. Many in the media and on Wall Street missed that part.
The reason Trump’s EO was so meekly worded is because even the president can’t wipe out most regulations by the stroke of a pen. There’s a legal process for both making and repealing them. Agencies have to gather information, study costs and benefits, allow public comment, etc.
This takes time—and with good reason. (…)
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Plan to Eliminate a Regulator Draws Criticism from Business Group A proposal in President Donald Trump’s budget to eliminate a regulator and cut government spending is drawing criticism from an unexpected source: Washington’s business lobby.
Private Funding Is Challenge of Trump Infrastructure Plan The president’s proposed infusion of funding for infrastructure turns on a critical question: how the administration will get private investors to put up most of the money.
(…) Under the new approach, Mr. Trump’s advisers said they can get private investors to flock to put up the capital for such projects by curtailing permitting requirements and regulations, and by offering incentives to states and cities to turn to the private sector for financing. (…)
It isn’t clear, however, that private investors will swarm to some of the country’s most seriously decrepit infrastructure projects because not all of them will provide commercial returns. (…)
Private-equity executives and bankers who specialize in infrastructure investing said that finding money for projects isn’t the problem. It is the dearth of attractive investments, they said. (…)
Benchmark U.S. Treasury Yield Falls to New 2017 Low The yield on the benchmark 10-year U.S. government note closed at the lowest level in 2017, extending its big slide since reaching this year’s peak in March.
PROFIT WARNINGS
Macy’s Remarks Spark Selloff Macy’s met with investors to lay out its strategy. Instead, the department-store chain set off a new panic over the beleaguered retail sector.
The department-store chain’s finance chief, Karen Hoguet, warned that Macy’s gross margins would fall about a percentage point in its current quarter compared with a year ago and decline slightly less than a point for the full financial year. (…)
SENTIMENT WATCH
Here they come! Hmmm…
Source: @bespokeinvest, @bespokeintel
Somebody recently coined the expression “return-free risk”. Some people will soon learn its meaning.
CETERIS NON PARIBUS:
Two SIM Cards and Better Selfies: How China’s Smartphones Are Taking On Apple Chinese manufacturers managed to snare more than 40% of the global smartphone market, double what they had five years ago, partly through offering handsets with features targeted to local markets.
Conference Call with James Grant, Grant’s Interest Rate Observer – 6/14/17
Mark sent me this link. Jim Grant is a great mind and a good speaker. Should be worth your time.