Today the BLS reported 194,000 jobs created a big miss from estimates; we did have 169,000 positive revisions to the previous jobs report. However, now we can start the 12-month push that I believe will lead us to get all the jobs back lost to Covid19. For those who have followed my work during this recovery period, I have stated two consistent labor market forecasts on my social media outlets
1. Jobs openings will get to 10,000,000, which has been checked as we are near 11,000,000 currently.
2nd. No one was more bullish than me in April 2020. However, the jobs data was going to lag always. This is why I have stated that we should get all the jobs lost to Covid19 by September of 2022 or earlier. This was before the Delta Variant and other factors kicking in. However, I don’t believe in the Dorian Gray Labor Market premise; we have limits. Aging and death are powerful economic forces. We have parts of the United States of America that don’t have population growth coming from young people while they age out the old. This is why I wasn’t a big job boom person in the previous expansion, which all my forecasts for job growth will show and even more now with the baby boomers leaving and dying off. Most Americans are always working; this notion of mass unemployment since 1945 is beyond crazy! However, know the limits of your demographic profiles, and you won’t be led astray.
Today – 147,553,000 jobs
Feb 2020 –152,553,000 jobs
4,980,000 jobs left in 12 months
415,000 jobs per month
4.8% unemployment rate
It sounds like a stretch, I get it, however, I chose that September 2022 data for many reasons and even with Delta pushing cases up again. I did not change my forecast.
From BLS: https://www.bls.gov/news.release/pdf/empsit.pdf
Total nonfarm payroll employment rose by 194,000 in September, and the unemployment rate fell by 0.4 percentage point to 4.8 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, in professional and business services, in retail trade, and in transportation and warehousing. Employment in public education declined over the month.
The job gains and losses today.
Here is a breakdown of the unemployment rate and educational attainment for those 25 years and older. Remember, it’s always about prime-age labor force data ages 25-54. Most people are always working; the lower portion of the educational and skilled attainment population tends to have a higher unemployment rate. This is why I created the #ATighterLaborMarketIsAGoodThing. We want to have college-educated unemployment rates for everyone! Trust me, we have tons of jobs that don’t need a college education or a particular required skill set that a functional human being has.
Less than a high school diploma, 7.9%
High School graduate, no college 5.8%
Some college or associate degree 4.5%
Bachelor’s degree and higher 2.5%
We are early in the economic expansion; the AB recovery model, written on April 7th, 2020, and was retired last December 9th, 2020, needed one thing to happen in 2021. While I believed we needed to see the 10-year yield head back to 1% in 2020, the real goal was to create a range between 1.33% – 1.60%. That could not happen last year but was a must for this year.
Currently, the 10-year yield is at 1.60%. The most beautiful economic artwork I will ever see in my life!
The 2021 bond yield range forecast was 0.62% -1.94%, and I recently talked about this and when we could see 4% mortgage rates on HousingWire this week.
For more on the AB recovery model and the entire journey from then to now, this podcast interview from Bill Brewster goes over everything; I mean everything! This interview was recently done.
Another piece of economic data today. For those who have followed my work on Housing Wire, I created the name Forbearance Crash Bros last year. This was in dedication to the terrible YouTube, Twitter, Facebook, and Clubhouse housing crash people who believed housing would crash last year but moved the goal post to 2021 due to Forbearance. It was always a joke from several professional housing doom and gloom grifters who are always predictable. Today, Forbearance data had the most significant decline in 12 months. We went from near 5,000,000 in Forbearance to now 1.39 million. More people will get off this program. I talked about how we should get forbearance data under 1,000,000 by 2022, and we might even get there before the year is done.
From BlackKnight: https://www.blackknightinc.com/blog-posts/largest-weekly-forbearance-decline-in-12-months/
Here is the most recent HousingWire article that documented the journey of why the Forbearance Crash 2021 bros blew it. Again, most of these people are not data people; they troll the internet for attention. Also, I don’t write about housing on this blog anymore. All my future work can be found on HousingWire.
The Economy is early in its economic expansion. However, some of the data will moderate. Retail Sales are booming in a deviation from historical trends that have never been seen in recent economic history. Learn to not freak out when hot data moderates, for some of you this is a new thing because economic data has never been this wild.
Transfer payments that boosted incomes and savings during the Covid19 crises have run their course, so we fall back to demographic consumption economics or back to normal again. I know we have some child credits and a fiscal spending bill that will pass soon. However, fall back on consumption always for economic expansion work. Also, don’t forget that the low bar that housing had from 2008-2019 is no longer here in 2020-2024.
The Leading Economic Index is still healthy; when this falls 4-6 months, let’s talk about this more helpfully. Note: A lot of economic data will moderate, so you’re going to have learned how to read reconciling high-velocity data early in an expansion.
The St. Louis Financial Stress Index is still calm at -0.8858%, zero is normal stress. We haven’t had a real 10% stock correction since the lows in March 2020. It won’t be like this forever, so be mindful of that reality.
Last for my trolling stock traders friends who hide behind fake names screaming about the Federal Reserve for many years. It’s been a fun battle with you for many years. Especially from March 2020 when your doom and gloom positing didn’t match that you were net long the entire time.
It won’t hurt you guys and gals to show your real name and face plus returns. Come on now, I know some of you are ballplayers, don’t be shy! We all made money!
Have a wonderful weekend; economics done right is always boring. Always be the detective and not the troll. The cycle is early; let’s run this together, ditch the doom and gloom crowd.
Don’t be part of the graveyard crew; the American Bears have all failed since 1790. They’re just a trolling doomsday cult and a lot of them are Baby Boomers. Our country has toasted the extreme left and right for centuries.
Logan Mohtashami is a Lead Analyst for Housing Wire, financial writer, and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami, now retired, spends his days and nights looking at charts and nothing else