Last week's employment report was widely interpreted as good because jobs growth rebounded and the unemployment rate dropped. Dr Ed and Elias disagree. Our inflation-adjusted Earned Income Proxy fell as inflation surged, a bad sign. Moreover, the jobs growth required to keep unemployment stable (the "breakeven rate") has collapsed, so a dropping unemployment rate must be evaluated in that context. Both labor supply and labor demand have contracted in recent months but remain roughly in balance. In sum, it's too simplistic to evaluate payroll reports against the old benchmarks. Folks who do are likely to draw the wrong conclusions. Also noteworthy: Retiring Baby Boomers are weighing on real disposable income while simultaneously bolstering consumer spending.
🔒
Exclusive Early Access for Paid Members: Below, you'll find Dr. Ed's latest webcast. Paid members can enjoy immediate access to the video. This content will become available to the public at a later date—don't miss out on early insights, consider upgrading today!
