Haywire Labor Data Points in Every Direction

Thought to Ponder ...

“I think of all the people I have spoken to who have said, ‘When I know exactly what the next thing is, I will make a move.’ I think of all the people whom I have taught to track who froze when they lost the track, wanting to be certain of the right path forward before they would move. Trackers try things. The tracker on a lost track enters a process of rediscovery that is fluid. He relies on a process of elimination, inquiry, confirmation; a process of discovery and feedback. He enters a ritual of focused attention. As paradoxical as it sounds, going down a path and not finding a track is part of finding the track. Alex and Renias call this ‘the path of not here.’ No action is considered a waste, and the key is to keep moving, readjusting, welcoming feedback. The path of not here is part of the path of here.”

-- Boyd Varty, "The Lion Tracker's Guide to Life"

The View from 30,000 feet

Last Weeks Macro Events

Employment Data

  • JOLTS (job opening data) had a massive surprise, three standard deviations below consensus estimates, the driving job openings to unemployed workers ratio back to pre-pandemic levels.
    • From Powell press conference May 1, 2024. “I think there’s also other paths that the economy could take, which, which would cause us to want to consider rate And those would be—two of those paths would be that we do gain greater confidence, as we’ve said, that inflation is moving sustainably down to 2 percent, and another path could be, you know, an unexpected weakening in the labor market, for example.
  • The euphoria the JOLTS report didn’t last for long because on Friday Nonfarm Payrolls (Establishment Survey) surprised four standard deviations above consensus estimates, indicating that 272k jobs had been created last month.
  • However, concerns about strength were muted by the Unemployment Rate (Household Survey), that rose to 4.0%, calling into question the validity of contradicting survey data.