Soft Landing Thesis
The Real Question
Key Comments
- DiMartino Booth: “Amazon first announced it was going to be laying off 100,000 workers, and we really did get validation of the slowdown with Target, Walmart, Kohl’s saying we’re sitting on way too much inventory, demand is not there.”
- Adam Taggart: I think the “Great Resignation” is poised to flip over into the “Great UnRetirement/Please-May-I-Have-My-Job-Back” movement way faster than most can imagine
- Case Capital CEO Kenny Polcari (from video clip): “If we are not in a recession, we certainly are headed there.”
Democrat analyst Laura Fink noted the strong points: Consumer outlook on the future, the April, Jobs report, and US growth is outpacing China for the first time since 1976.
Jobs Discussion
The April Jobs report was not all that strong. On May 6, I commented In April, Jobs Rise by 428,000 but Employment Drops by 353,000
In the past few years, discrepancy between the Household Survey (employment and unemployment) vs the Establishment Survey (Payroll Jobs) always resolved in favor of the Establishment Survey.
At turning points the opposite happens but when does it show up?
Lagging Indicators
More on Lagging Jobs
Cycle Compression
Adam Replies: “Just to clarify: I don’t disagree. That will be the likely progression: hiring freeze> hours cut > layoffs I just expect we’ll progress through it faster than most are currently imagining.”
So, will the Fed hike faster than the #CycleCompression?
That seems to be what we are really debating!
My guess is yes. A rare policy error in the opposite direction.
US vs China
China has been in a lockdown for a month. Ports are just starting to clear. Regardless, alleged relative strength is not strength.
Mythical Credibility
Scroll to Continue
Already in Recession
Another Recession Vote
Declining strip club attendance is a proposed leading indicator.
“The strip club is sadly a leading indicator and i can promise y’all we r in a recession,” says ReverseCowgirl69.
Exhibits A & B
Retail Sales Easily Beat Expectations, US Treasury Yields Jump in Response
On May 17, I noted Retail Sales Easily Beat Expectations, US Treasury Yields Jump in Response
I thought that ruled out a second-quarter recession. But the presumption was the report accurately reflected sales.
On May 18, I asked Target Plunges 25%, What About Yesterday’s Big Retail Sales Blowout?
It’s not just Target, but Walmart, Amazon, and Kohls all warning about too much inventory and slowing sales.
Factor in a housing slowdown.
Recession When?
A recession may have already started. A huge revision in consumer sales coupled with continued weakness in housing could do it.
Regardless, look for a recession that starts no later than the third-quarter of 2022.
This post originated at MishTalk.Com.
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