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  • US jobs surge means no March rate cut

    From think.ing.com

    January’s US employment report is crazy strong. Payrolls surged 353k versus 185k consensus, where the even highest forecast of 300k was well shy of the outcome, especially when we add in the 126k of upward revisions to the past two months of data. As the chart below shows, the momentum in job creation is on the rise again, but this time, it isn’t merely the leisure & hospitality, government and education & healthcare services, which accounted for 80% of the jobs added in 2023. For sure, education and health were the biggest drivers, adding 112k, but the government added a relatively modest (by its ... (full story)

"On top of that, we have average hourly earnings rising 0.6%MoM/4.5% YoY, whereas the market had been predicting only a 0.3% increase. Meanwhile, the unemployment rate remained at 3.7% rather than rising to 3.8%. This combination of strong jobs and wages with unemployment falling indicates clear strength in the US economy and even though inflation is still tracking towards 2% the Federal Reserve simply won’t consider cutting rates at the March FOMC meeting.

But there are areas of concern and data contradictions
However, we have to point out there are some less positive stories here. Nearly all the jobs the American economy is adding are part-time, and the average workweek fell to 34.1 hours – that is recession territory! Note that while the number of unemployed fell, the household survey (remember there are two surveys - the establishment survey of employers to generate the payrolls number and the household survey to generate the unemployment rate) showed employment falling 31k."

...

"So, as is the case in so much of the US data flow, there are huge contradictions between data releases and even within data releases. There will be no March interest rate cut (barring a return of financial system stress), but we are sticking with the May rate cut call with 150bp of cuts this year and 100bp in 2025"
Seeking Fair Value
Inflation is out of control

Easy.

How many CPI y/y %'s have we had below 2% of late?
Quoting makingmoves
"On top of that, we have average hourly earnings rising 0.6%MoM/4.5% YoY, whereas the market had been predicting only a 0.3% increase. Meanwhile, the unemployment rate remained at 3.7% rather than rising to 3.8%. This combination of strong jobs and wages with unemployment falling indicates clear strength in the US economy and even though inflation is still tracking towards 2% the Federal Reserve simply won’t consider cutting rates at the March FOMC meeting. But there are areas of concern and data contradictions However, we have to point out...
'we are sticking with'

lovely story... how's that working out for them?

I've got broken watches that are more accurate.
Inflation literally… very literally as per fed’s mandate is NOT under control.
Quoting Macrofxdata
{quote} Read my post up, and pay attention to macro data and what is happening. USA inflation is LITERALLY, under control.
If it is literally under control; you would be able to make a statement that defines it as such.

Inflation is above 2% mandate. FOMC want it below 2%. When FED first increased rates to control inflation; they anticipated faster disinflation than that which we have seen. Therefore there is currently zero evidence to support inflation is in anyway under control. Current disinflation could just be from base effect and exogenous factors. Genie is still out of bottle.
Ladies and Gentlemen:

You are tilting at windmills! Inflation is out of sight, it is under control, it is not under control, you can do anything with statistical data and other sophistry like that. In addition, inflation is 3.2% and somebody above is incensed that it is 70% higher than the FED's target of 2%.

The facts of the matter are as follows:
- Inflation is 3.2%. That can hardly be called "out of sight" when the average annual inflation for the past 50 years was 3.6%.
- The 2% target is there only because we dread the disinflation that causes the uncontrollable decline in prices, producers cannot recover their costs and a waive of bankruptcies ensues.
- We have just come out of nearly two decades of unprecedently low interest rates that may or may not repeat itself in the future.
- Only those whose memory does not go farther than the inception of Twitter in March 2006 go into convulsions because the mortgage rates, that were 2% for a while are now back to the more usual 8%.
For the record then, my 30y. fixed rate mortgage loan was at the rate of 8.5% in 1978 and the next one at 12.5% in 1981, when the Fed Funds Rate, now 5.5%, reached 22.38% with inflation 13.5% in the preceding year of 1980. This is how Chairman Volker rapidly killed inflation by inducing a recession.
- The upshot is that I sold each house in a few short years with the capital gains exceeding 100% of the purchase prices.
- Last but not least, my father used to say that statistics is the exact work with inexact numbers. Along those lines, somebody claims above that he can show anything by manipulation the statistical data. The key word is "manipulation."
- The truth of the matter is that those who eschew hard statistical data and claim that they have much better "feeling" for what is going on based on faith, unfounded assumptions and a political bias are just pure charlatans. (Charlatan: One who claims to have knowledge he does not posses.) Just like the gentleman at the supermarket counter in front of me the other day who was paying $96 for groceries and said: "This would cost $50 a year ago." So much for that.
- In case I would be accused of toeing President Biden's line then I am not. I am a 79y. old conservative. It is unseemly when people on my side of the isle, including presidential candidates, claim that "the economy is in shambles" (DeSantis) and the communist "rich are getting richer and poor are getting poorer" (Haley). A memo to my fellow conservatives: The national economy can be in good shape when the Democrats hold the White House. This is the country with the highest standard of living achieved on the Earth ever. What those knowledgeable in economics should criticize in the administration's policies is the profligate spending on its programs that is highly inflationary and if not kept in check, the inflation will raise its ugly head in the future years as it always demonstrates itself with such a delay:

1. Excessive stimulus of $2 trillion (Trump's stimulus of $4.5 trillion was also excessive as $1 trillion of it remains unspent. The whole stimulus in 2008 was a paltry $1 trillion.)
2. $2 trillion for "infrastructure."
3. $10 trillion over the next ten years, all funded by printing money.
4. President's "Inflation Reduction Act of 2022" that has become the butt of jokes in Washington, D.C. because it is highly inflationary because due to its excessive investment in "renewable energy."
5. "Student Loan Forgiveness Program" that will cost at least hundreds of billion dollars. It is a political stunt to obtain votes for Democrats. Yet, it has not been well received by the target voters because it is limited to $10,000 per person whereas good education costs $50,000 to $200,000.
6. The astronomical increase in the money supply over the recent 23 months by 40% from $15 trillion to $21 trillion due to funding the administration's pet programs by printing money. More money in circulation is servicing the same production expressed as GDP. Thus, the value of money has to decline to get into a new equilibrium with the production - hence inflation.
Quoting Eurorally
Ladies and Gentlemen:
Always fascinating seeing the world through the eyes of a baby boomer.

"That can hardly be called "out of sight" when the average annual inflation for the past 50 years was 3.6%."

Does this factor in hedonic adjustment when measuring inflation? Inflation as measured today would translate into figures almost double if measured as per the method prior to the 90s, for example. Combine that with the amount of leverage in the system today, and I'm afraid the baby boomer anthem "it was even worse in my day, snow flake", gets boring.

All inflation is naughty, but so is deflation. A little inflation is a good surrogate marker for an active economy (sufficient cash chasing investments and assets). Inflation is also a non-linear beast and needs keeping in check. If price rise expectations become de anchored, they tend to trigger second round effects and exponential price spirals.

The moral hazard here is that inflation helps governments spend (as long as market trust they can service the debt); and becomes a back door tax, especially to those that are asset poor (effectively taxing the young and yet to be born, whilst shielding those that are more likely to vote, such as boomers).

I could rant on for 1000s of words but suffice it to say...

-Inflation is out of control
-Inflation has been out of control on many occasions in the past too
-Hedonic adjustment + leverage + moral hazard, means the current lack of control is even more concerning
-People believing (baby boomers or otherwise) that hedonic adjusted inflation above 3% is under control when the fed's mandate is 2%; is case and point for de anchored price expectations..hence:

INFLATION IS OUT OF CONTROL

[you may want to go back through my comments history and see when and how often I repeat that phrase and plot it against subsequent inflation].

Yes I agree with you; government spending (in addition to QE and ZIRP) are driving this. It all comes from the ponzi like social contract we are all living by. One that is exacerbated by ESG, declining birth rate and moral hazard.
Quoting Vancarbon
{quote} My advice ww3361 Delete your posts on this forum and save your breath. It really isn’t worth contributing when people have tunnel vision , fixated with political bias or follow an agenda.
u have to delete your posts to hide when u are wrong. u called for US shares to go down 2 weeks ago after options expiry with a 5 to 10 % drop which was the 20th Jan. well u were wrong again.
It is so weak to delete your posts. Man up and leave your posts
Ladies and Gents:

To make sure that I am understood, I did not mean that you should learn from your elders.

Rather, I wanted to say that in order to understand the economics and the national economy, you must not believe that the last two decades represented the "new normal," such as the 30-year mortgage loans at the ridiculously low rate of interest of 2%, and that it is entirely misguided and wrong to cry about the more normal rate of 8%.

The same is true about many other parameters of our national economy as you should not understand them through the somewhat blind prism of the last two decades only.

That is all.
Quoting Vancarbon
Steven It’s “you “, not U . Really now ! How old are you ? Genuine question . I delete my posts everyday , irrespective of what I comment on. Why leave a digital log . It’s a litigious culture these days . They generally get people agreeing with their content , although unlike you, I don’t have an ego. I’m glad it irritates you , obviously I hit a nerve with previous posts .
Oh dear - gees it is sad u mention ego. It is all about keeping u accountable. u are guilty for saying wild statements on here and by deleting your posts u delete your track record. well not anymore. your track record is appalling and bad. u called for US shares to go down after Jan option expiry and was wrong wrong wrong. Not any more. Time to hold u accountable. I shall copy and paste your posts to record them to hold u accountable for the rubbish u say. Time u learn quality not quantity is better - u post too much rubbish here
Quoting Ferna
Omg Steven, you behave like a girl Manopause already
Really - with some of the rants u say??? the rants u said last weekend were bordering on "crazy person" thinking - seriously Ferna u need to keep out of this
Time to stop this rubbish Ferna - i am going to copy and paste/time stamp your crazy person rants - it has to stop
Quoting Vancarbon
Don’t stop him Fern He makes my day Is he related to Tudor? A distant relative .
When are u going to admit u were wrong in your statements - grow up and admit u were wrong

it is funny u cam't answer the question u were wrong - u keep avoiding it - u are a BAD LOSER
Quoting Vancarbon
{quote} Steven You can hyphenate “It is” to “ it’s “ . “ You are ” to “ you’re “ . Genuine question -How old are you ? Oh dear - Ferna on the hit list now .
Answer the question - u were wrong on the US option expiry on Jan for US shares to go down - own up to it.
Ferna says a lot of rubbish on here - time to hold him accountable too - deleting posts and therefore records is childish - man up and own mistakes when u get it wrong
Quoting Vancarbon
{quote} You first . How old are you ?
Answer the question - U can't handle been wrong - that is sad - man up and admit u wrere wrong. u can't handle been held accountable
Quoting Vancarbon
{quote} You first . How old are you ? You forgot to record my dyslexic post . I’m trading intraday on the 5min , 1hour here. Multitasking eh ! Who said only women can do it .
u said u were looking for a 5 to 10% correction after the Jan 19 options expiry. Now u say u trade 5 min charts - 10 % corrections don't happen on the 5 min chart - u are full of rubbish - keep changing the story. U are wrong wrong wrong. admit it. stop posting rubbish. time to hold u accountable to the rubbish u post
Quoting Vancarbon
{quote} What! So , let me understand your thinking here . We can’t trade intraday on 5m or hourly whilst viewing the Daily,Weekly,Monthly. I’ve heard it all now. You’re just way too smart for me . Did you work in Guantanamo Bay by any chance? Your water boarding techniques and repetition are impressive. If not think about applying .
I don't care what timeframe u trade. It is what u say in your comments is what counts. U said after Jan 19 2024 options expiry u were looking for a 5 to 10 % correction - well the chart shows u were wrong wrong wrong. admit it u got it wrong and move on - it is bad u can't admit u got it wrong
VanCarbon u have to delete your posts to cover up where u got it wrong
Quoting Ferna
Hey steve, u wrote that the dollar is goin down.. have u been held accountable yet? It looks like it is goin up.. The chinese must be buying? *drumroll… waiting for steven to live up to what he say by admitting he is wrong . 10 years later: ”Steven? Did you read my message? *echo: STEEEVEEEEEn!…”
Yes the US dollar is going down later this decade - i never said this month or year - i trade weekly charts - not intra-day
https://www.forexfactory.com/news/12...y#post14726073
jan 20TH 2024 SO FUNNY - silence from vancarbon
Vancarbon u said 6 weeks ago the US indexes would have a reversal and go down and u were wrong
US shares are in a bullmarket - lots of shares are hitting all time highs which proves a strong market.
Yes they will have a pullback at some stage but no reversal into a downtrend
Stockmarkets all around the world are hitting all time highs - all time highs is bullish not bearish
The big picture (weekly and monthly) has the US indexes going much higher - they have formed a bullflag and breakout and the measured move target is much higher as the red lines show
Permabear thinking does not help anyone- i view forexfactory only to see what the crowd is saying - the crowd is bearish as anything - nobody is bullish - the crowd is always wrong
I will give u a hint to where the markets are going longer term - the Dow is going to 100 k by the end of this decade- yes doubling from here
Look at the last big bullmarket from 1933 to 1966 - where did it finish???? just over 1000 - markets like big round numbers to excite the crowd to buy at the top - this time 100 k will excite the crowd
Every year since the GFC i hear people say the shares are overvalued and will crash and keep been wrong year after after year - permabear thinking is just plain silly in bullmarkets


ONLY UP 100 POINTS SO FAR - FERNA AND VANCARBON?? WHERE IS YOUR PROOF???? SILENCE - U HAVE NONE

Attached Image (click to enlarge)
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Quoting Ferna
Aha deflection. Imagine criticizing others for having an opinion and having no balls to make any calls himself. Btw you shouldn’t rely on others opinion in trading, this is mostly a forum for discussion. Yes the market goes DOWN and also UP. No shit.
Get your eyes tested - look at the chart above from Jan 20th 2024 i posted - see the red line on the right -that is the flag target for later this year - so far it is up 100 points since then
Quoting Ferna
Get yours, u deflecting - that’s not the dollar.
U have any proof to back up your claims??? NO- u are all talk Ferna - zero substance - I DO from the Jan 20TH post above - so be quiet - it was between VanCarbon and me - not u Ferna
Quoting Ferna
There is no thing as personal in business. If you would focus less in being right i could have tell you how it’s done. This kind of behavior make other less willing to share/discuss or write anything. If we would play tennis and i beat you, i wouldn’t hold you accountable or some girlish shit like that I’d proably just buy you a burger or a protein shake.
U are totally wrong. With trading your account shows proof if u are a good trader or a bad trader. If your account goes down the drain u are a rubbish trader no matter what stories u tell yourself. Trading demands the truth. When your stoploss is hit u have to admit u were wrong on the trade - just saying stories and denying it will only make the pain worse with your account going down. Trading requires the truth. To deny the truth in trading is so bad. Honesty is everything in trading
Quoting Vancarbon
Steven is Asian Australian , it’s pretty apparent to me from his ethos and lack of personality. He takes everything literally and personally. Character traits . He’s also young , naive and has zero social skills
And u don't like been wrong and been held accountable
Quoting Steven1
{quote} And u don't like been wrong and been held accountable
I think you will struggle making a living from trading, if the concept of right/wrong is so important to you.

Maybe I'm wrong.
Quoting ww3361
{quote} I think you will struggle making a living from trading, if the concept of right/wrong is so important to you. Maybe I'm wrong.
Admitting when u are wrong is very important with trading. No trader is always right 100% of the time. I have been trading for 18 years. The concept of been right and wrong is very important which i why i said been able to admit when u are wrong above is important - seems u did not read the comments above
Quoting Vancarbon
{quote} Oh that last one liner was so subtle. I can’t help but like it
Shows u are a newbie trader than . a stoploss shows when u are wrong. Pity u can't admit when your comments are wrong
Quoting Steven1
{quote} Admitting when u are wrong is very important with trading. No trader is always right 100% of the time. I have been trading for 18 years. The concept of been right and wrong is very important which i why i said been able to admit when u are wrong above is important - seems u did not read the comments above
But mate, you aren't the market. So why are you calling users out for wrong calls? I don't get where you are coming from.
Quoting ww3361
{quote} But mate, you aren't the market. So why are you calling users out for wrong calls? I don't get where you are coming from.
VanCarborn called for the SP500 to go down in a 5 to 10% correction on Jan 20 - US instead went up - VanCarbon was wrong wrong wrong
Quoting Ferna
Lol so if we played tennis and i beat you, it means you are a bad tennis player? And should quit forever? Or it just means i have an edge, and you got room to improve through discussion, practice and technique? Just get back on your feet if u were beaten, none of us got the access to all the data and decisions being made. There are hidden markets, deals between government, public market, sales of Boeing aeroplanes and other huge deals being made. Money moves. There are more charts than the price chart. And there is more stuff than interest rates....
Truth is only when u keep your posts. When u delete your posts u have ZERO CREDIBILITY
How are you going to go on forexfactory.com and start beef then continue to have beef. Also, popped in to say told you so.
About everything.
You wanna go nerds? on forexfactory.com? I'm not gonna sit here and watch you losers engage in a flame war where you have to refresh the page.. grow up and join a group chat.. I personally know the 1000 redditors that constitutes "everybody"
Wait don't ban my account i've had this sumbitch forever.
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