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  • US jobs numbers could soon start to turn

    From think.ing.com

    The ISM manufacturing index has long been regarded as one of the best indicators of the health of the US economy. Unfortunately the December report is soft, falling to 48.4 from 49.0. This is the second consecutive month of contraction, where it has come in below the 50 break-even level. New orders have been sub-50 four months in a row and production has now followed for the first time since May 2020. Export orders and the backlog of orders are also weak so there appears to be little prospect of a swift rebound in output. Another interesting story is that the prices paid component measure of inflation pressures fell ... (full story)

The report is fine in "normal" conditions which it no longer is. The war in the Ukraine, the sable rattling of China, are all pointing towards more industry being pulled back from other countries which means the labour requirements will stay strong.

The reduced disposable income levels means that all the "nice to have" products will be less in demand and the "essential" products will tend to shift demand towards the more durable offerings (in the other words: the focus will be more towards "Total Cost of Ownership - TCO - i.e.: purchase price - selling off recovery + maintenance cost). Business with low quality goods will feel the pain. A normal business cycle here.

The great unknown is if the Covid pandemic is going to rear it's ugly head again or if it will continue much as it is at the moment.

The above means inflation is not yet under control and the employees will be squeezed even more because unfortunately the FED seems to be still stuck in its archaic thinking.
With due respect to all (who might have a different viewpoint).
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