MacroEdge Weekly Ozone Report 9/8, August MacroEdge Labor Market Report, Vision Update
In this MacroEdge Weekly Ozone Report + August Labor Market Report - the team dives into all of the critical employment trends that have pushed financial markets into a mid-air stall. #MacroEdge
August Labor Market Report - Soft Liftoff Period Continues (@DonMiami3, MacroEdge Chief Economist)
Good Sunday evening to all MacroEdge readers and to our community. This weekend went by quickly and we’re now in a long stretch leading into Fall without holidays and much focus on the employment markets and the election. The cool Friday labor market data (and cool data from ADP) gave ammunition to the recession/employment weakness narrative again on Friday and when you strip out government/education and healthcare hires from the data, the labor market continues to look pretty awful. As we labeled the Fed agenda back in June the ‘summer of policy errors’ - it appears they are now realizing that they messed up waiting so long to lower rates and probably should’ve started back in April or May. With hindsight being 20/20 and market participants continuing to broadly anticipate a 1995 experience over a 91/00/07 experience (or combination of many past cycles) and with many sell-side ‘economists’ continuing to paint ridiculous portraits of broad economic strength with upside acceleration probabilities into rate cuts, we are taking the opposite side of that view, as we have largely since August 2023 as it pertains to employment data. Revisions to employment data also remain very large, meaning that we should take each initial report at face value even though markets may not - as markets remain largely asleep at the wheel.
While the data for August was no catastrophe, it again serves as an important goalpost along our larger roadmap of weakening employment data. As the easing cycle begins, we will begin to pivot the focus towards initial and continuing claims, and broader employment metrics focused on cyclical areas of the labor market that usually see significant issues when the Fed begins easing in response to labor market woes. This is a period we’re labeling the ‘soft liftoff’ as the expectation for a soft landing continues but the data continues to worsen. The cycle continues to evolve and as real estate and other cyclical sectors continue to soften post cuts, views will change slowly.
Let’s dive into the comprehensive August Ozone Weekly Report and Labor Market Overview and make sure to catch more on our new real estate division, RESights, with more information on it this Wednesday evening in the midweek report. You can access everything MacroEdge through Ozone access for two weeks at:
