I am unabashedly pro ‘Merica. I’m not going to caveat it with one of those weak “obviously we’re not perfect but…” preambles. We’re #1. Period. That’s my declaration.
I can’t help but think how the World Cup is a metaphor for the US vs. the world. We don’t fake injuries. Roll around grabbing our ankles. Germany had four players who opted out of taking PKs because they weren’t in the right headspace?! The Canada coach lost 3-0 and said, “I’d rather be us than them.” WTF? We’re not back to back World War champs with that mentality.
And that bs red card on our best scorer and now he misses the next game too over a bogus call?! I’m enjoying the WC festivities, but the game itself turns me off.
One of our newer teammates is from England, so a few of us decided to decorate his desk and show him some July 4th love. I bought some shirts with a sarcastic spin on them. Mine says, “It’s only treason if you lose.”
If you look closely enough in the background, you can see a heartfelt personalized message for him…
And if you look really closely, you can see we were performing our civic duty by watching Talladega Nights…
Another team decided to drape themselves in Old Glory. They got to wear shorts if they rocked a sweet tee.
We grilled hot dogs in the office and the kegs might have gotten tapped.
Not shown…my Hulk Hogan socks. But they were there. And they were glorious. Happy 250, America!
Last Week This Morning
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10T: 4.48%
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2T: 4.14%
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SOFR: 3.66%
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Term SOFR: 3.67%
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JOLTs Job Openings: 7594k vs. 7296k expected
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Nonfarm: 57k vs. 113k expected
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Unemployment Rate: 4.2% vs. 4.3% expected
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ISM Manufacturing PMI: 53.3 vs. 53.6 expected
Those Jobs Tho!
The only thing that matters from Thursday’s job report was that over 700k people gave up looking for work.
Had those 700k people kept looking for work, the unemployment rate would have been 4.6%, not 4.2%. Why is no one talking about this?! Can you imagine the market reaction if the only data released on Thursday was “The unemployment rate surged from 4.3% to 4.6%”?
If those 700k people were a country playing in the World Cup, they’d be bigger than two other actual countries playing in the WC (Curaçao and Cabo Verde). And they’d whine less.
The Good
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Healthcare added 47k jobs last month, so there’s that. Of course, the grand total was just 57k.
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The Sixers fleeced the Celtics!
The Bad
- Economists were expecting a big WC boost to certain sectors, leading to many forecasts of more than 200k jobs gained. The opposite happened. Here’s how many jobs the following sectors lost:
- Leisure and Hospitality: 61k jobs (worst since covid)
- Bars and Restaurants: 33k jobs
- Hotels: 9k jobs
- April and May were revised down by a combined 74k
- Full time employment dropped 514k, marking the third consecutive month of full time drops
- In the last 18 months, the US has lost 2.2mm full time jobs
The Ugly
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The real unemployment rate is now 4.6%, but no one seems to care
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25-34 year olds saw their employed rate drop from 80.1% to 78.6%
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25-54 year olds (“Prime Age”) participation rate dropped the most in 78 years (excluding April 2020
Rates
Rates, particularly on the front end, dropped immediately following the print. But over the rest of the trading session, rates basically moved back to unch on the day.
This makes sense since inflation is clearly the driver of Fed policy right now. A gain of 57k isn’t as robust as we hoped, but it’s actually not a bad number. At a minimum, it’s enough for the Fed to focus on inflation.
Markets pushed back a hike to December (80%), but I think the Fed is on hold the rest of the year. Another disappointing job report next month, or an underwhelming inflation print, could drive the 10T below 4.25%.
The Week Ahead
Pretty quiet week, with maybe the FOMC Minutes as the headline event. I’m not sure how much Warsh will allow to be made public in the minutes, so they may lose their value.
Random Fact of the Day
The word “America” comes from Amerigo Vespucci, an Italian explorer. Columbus thought he landed in Asia, but Vespucci was like, “Are you sure?”
In 1507, German cartographer Martin Waldseemüller published a world map. He Latinized Amerigo’s name as Americus Vespucius, then made it feminine because other known continents had feminine Latin names: Europa, Asia, Africa. He labeled the new continent America.
Weird Thought of the Day
I was born shortly after America turned 200. On July 4th, 1976, my mom, raised in Philly and 6 months pregnant, went to Independence Hall where the Declaration of Independence had been signed exactly 200 years prior. Maybe that’s the origin of my love affair with this country.
But here’s the weird thought…if I make it to America’s 300th birthday, I will have been around for 1/3 of America’s existence.
