Wednesday, Apr 5, 2023

Stagflationary gold, ETH awakens, the jobs data's hidden message, Bitcoin development and some links...

“Do the best you can until you know better. Then when you know better, do better.” – Maya Angelou ||

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MARKETS

Jolted awake

The stagflation narrative got a sharp jolt yesterday (hehe) with the latest JOLTS data. The monthly Job Openings and Labor Turnover Survey collects hiring and exit information from approximately 20,700 US businesses of different sizes, and then extrapolates to get a national estimate. For February, the estimated national number of job openings dropped below 10 million for the first time since May 2021. Also, this is the first time that the JOLTS data has come in under expectations since October 2022. In spite of this data being an estimate, and in spite of evidence that many job openings are fake anyway, the Fed pivot crowd got very excited, with yields dropping sharply along the curve.

(chart via TradingView)

They’re right in that this is a strong (but not yet conclusive) sign of a weakening employment outlook. We could see further evidence of this in today’s ADP non-farm payroll data and Friday’s official employment figures, although we’ve had head-fake dips before that then recovered.

This dip was particularly sharp, however. The below chart shows that the only other times this century in which the monthly JOLTS data has dropped by so much year-on-year were in recession years.

(chart via the St. Louis Fed)

Before we conclude that this is proof a recession is upon us, we should remember that, while the drop was steep, the overall level of job openings is still historically high, and even now is approximately 30% higher than the average for 2019. So, the employment situation is not dire yet.