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Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here. |
Today's bonus chart examines the decline in business applications for retail businesses, which have fallen by 16% since November, from 100,786 to 84,103. While this represents a significant decrease, it's important to note that current application levels remain well above pre-pandemic figures, which were around 48,000. A similar trend is observed in manufacturing business applications, experiencing a 25% drop since December. These observations provide context as we approach the discussion from the Friday jobs report.
The economy produced 223K private sector jobs, modest wage growth of only 0.1% month-over-month, and adjustments to the previously overheated January figures. The recent three-month average for private sector job creation stands at a robust +204K, showing a slight improvement from the lows observed in late 2023. That’s all fine.
What’s less fine is the U6 rate. The U6 unemployment rate, which offers a comprehensive measure of underemployment by including part-time workers seeking full-time employment and those marginally attached to the labor force, is on a gradual rise. This is your "gig economy as a replacement for unemployment." Additionally, the hiring trends within cyclical industries, including manufacturing, trading, transportation, and construction, are notably weak, marking the softest full-time hiring pace since 2011. How the market adjusts to this in the future will have everything to do with the Fed’s reaction. We will delve into a real rates discussion in future bonus content.
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Learn more about the Market Situation Report written by Tier 1 Alpha. |
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