A byproduct of the Pandemic Emergency Unemployment Compensation (“PEUC”) program is the job interview "no show", which has become all too common across the Retail sector. The "no show" is where a job candidate skips the job interview because the candidate never intended to obtain a job. Rather, the candidate simply needed to show proof … Continue reading The Job Interview “No Show”
The U.S. Bureau of Labor Statistics ("BLS"), publishes the Labor Participation Rate each month. The Labor Participation Rate accurately reflects the state of labor in the United States. The same government agency also publishes the Unemployment Rate each month (due Friday June 4th). We view the latter as a Government marketing metric as it significantly … Continue reading Labor Participation Outlook: June 2021Premium
We doubled down on our bet that Federal unemployment benefits will be extended beyond September 6th after listening to Joe Biden tell us that the sky is not blue. The longer these enhanced Federal unemployment benefits remain in force the longer the Labor Participation Rate will remain below 2019 levels. This will continue to impact … Continue reading Federal Unemployment Benefits Will Be Extended In September
Low wage services jobs are difficult to fill as we recently wrote (we continue to collect anecdotal data that supports our prior writing). Workers are choosing to stay home and collect Federal unemployment benefits rather than be productive. The moral hazard we warned of months ago is here. Should Biden and The Fed choose to … Continue reading Workers Choose To Collect Federal Unemployment Benefits Rather Than Work
The three-headed Hydra of low labor participation, increased debt levels and higher taxes will cripple U.S. long-term Real GDP growth for decades. Labor participation is not going back to December 2019 levels. To believe that scenario is wishful thinking. For starters, 25% of restaurants and bars are permanently closed. Those jobs are not returning. Second, … Continue reading Brace for Anemic Long-Term Real GDP Growth
Whether one measures EV/Revenue multiples, EV/EBITDA multiples, Stock Market P/E multiples or various other measures there is no doubt the market is frothy and that certain sectors are firmly in bubble territory. Two trends are troublesome. The first is that the Market Cap to GDP ratio (measured by the Wilshire 5000 index to Nominal GDP) … Continue reading Stocks Are at A High. Labor Participation Is at A Low.
Polling should show a Biden lead going into Tuesday's general election given that Democrats have historically participated in early voting in significantly larger numbers than have Republicans. Too Close To Call We believe that Tuesday's election between two fiscally irresponsible parties will be closer than many voters anticipate. Various polls show an early lead for … Continue reading Tuesday’s Election Will Be Closer Than What Polls Show
Credit spreads will widen in our view primarily driven by job losses and increases in the cost of goods and services. There is downward pressure on jobs as we usher in the fall season. Seasonal summer jobs essentially work their way to zero from Labor Day to Columbus Day. Government jobs around the U.S. Census … Continue reading Credit Spreads Will Widen as Job Losses Mount and Supply-Side Costs Increase
Fed Chair Powell's comments on Thursday were in-line with our perspective published on Wednesday. The Fed will continue to work to "stimulate" the economy (it can't of course, it can only inflate asset prices). However, every time Chairman Powell mentioned "full employment" in his speech I couldn't help but think of the job dislocation that's … Continue reading Dovish Fed Policy Speaks to A Weak Economy and Permanent Job Dislocation. We Propose A Solution.
It is going to take several years for the U.S. economy to recover back to 2019 levels. 2019 is a low bar in our view as that economy - much like the present one - was debt-fueled, deficit-ridden and plagued by artificially low interest rates. These factors in the aggregate have stymied sustainable, real economic … Continue reading Markets Are Poised To Grind Lower