Thursday we got the new jobless claims and continuing claims numbers, and Friday we got the BLS Jobs Report for the month of August. The initial jobless claims and continuing claims number are always important, but they will serve to lay the foundation of the BLS Jobs Report that can really move the markets.
For the past several FED meetings, the governors have pointed to the steady decline in initial claims and the growth of jobs in the market to show that the economy is still too robust to stop raising interest rates. Despite the fact that the BLS just released an important report stating that from April of 2022 to March of 2023, they have overstated the number of jobs by more than 300,000 jobs! That’s not a small number. In fact, when put into real terms, that is a miss of more than 9% on a monthly basis. When you add into the numbers that ADP numbers have been wildly out of touch with reality to the point that people are now almost completely ignoring them, it makes you wonder that with all the actual technology we have at our disposal, how are these “season adjustments” “phone surveys” and the “birth/death model” need to be looked into and either improved or replaced. NOBODY but the FED really believes the numbers!
Please watch the reports today and on Friday. They both can move the markets, but if the BLS numbers show a weaking in the job market and softer wage pressure, we could see big improvements in the bond market. Strong numbers and we could see rates go higher quickly as it will give the FED ammunition for yet more rate hikes!
On the brighter side, purchase activity is strong despite 7% rates as many are understanding its about the Monthly VALUE of the payment, and not the rate! We also need to focus on our accountant list so we cam make our calls next week and start connecting with those filing those tax returns for the clients who have extensions! It will be a busy few days before an opportunity packed Labor Day weekend!
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