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Eurodollar University’s Making Sense; Episode 26, Part 1: Why Do We Keep Seeing July?


















Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, a professional gentleman of leisure in no need of unemployment insurance. Artwork by David Parkins. 
26.1 The HUGE Improvement in Unemployment is UN-REAL
A great improvement in the US unemployment rate (JUL: 10.2%, AUG: 8.4%) suggests the Reopening Boom hints at economic recovery. UNFORTUNATELY, we have heard this story before — indeed, for over a decade. Other employment data imply the unemployment rate is unreal. AGAIN.


How much is several? What is a few? If you were to put a numerical value on “probably” would it be more, or less, than “likely”? To your podcaster’s great consternation the linguistic gatekeepers of Middle English were rather disinterested. As a result we’re constantly late or early. ‘I thought we were to meet in a few hours, no?’ ‘No! It was several.’ ‘Oh, right.’ Women seem to revel in these nuances, arriving for a date with this podcaster when it pleases them and then claiming etymological immunity.

Which brings us to the word transitory. Admittedly there is SOME lexicographic nuance: momentary, transient, impermanent, temporal. However, the Federal Reserve – like the proverbial camel – stuck its thesaurus-nose into that nuance and CHARGED into the economic-tent of the past decade. Why did the 2009-10 Green Shoots recovery fail? Transitory European Sovereign Debt Crisis, gummed Bernanke. Why did the economy swoon in the first quarter of 2014? Transitory Polar Vortex, chomped Yellen. Why did inflation not accelerate despite ‘full-employment’? Transitory cellular data-plan price war, gnawed the FOMC. Why was Globally Synchronized Growth tripped up? Transitory political trade wars, chawed Powell.

So here we are, 10 transitory-filled years later. Now, unless there are glaciers listening to this podcast – and it needs all the ratings assistance it can get – it’s likely the audience is in unanimous agreement that the definition of “transitory” has been tortured to death. Indeed, the Federal Reserve agrees! And Transitory has been retired. Or cremated. Still, instinct informs your podcaster that much like our zombie economy, the transitory excuse is undead and will walk again!


00:52 US employment data shows a *fabulous* improvement in the unemployment rate
02:49 A difference has developed between the BLS “Household” and “Establishment” Surveys
05:03 A survey by Automatic Data Processing corroborates the LESS-positive Establishment Survey
07:17 Another survey, the JOLT Survey, corroborates the LESS-positive Establishment Survey
10:09 (Regular) unemployment claims data corroborates the MORE-positive Household Survey
12:16 (Irregular) unemployment claims data corroborates the LESS-positive Establishment Survey
15:57 Two unemployed groups: temporary virus shutdown vs. permanent economic damage


Unfortunately Like Old Times: Back To Being The Star of the Payroll Show:
Even More Suggesting Something Did Happen In July:
Alhambra Investments Blog:
RealClear Markets Essays:


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