by Chris Marcus, Miles Franklin:
In a rather wild sequence of events this past Friday, a flurry of news indicated that we might be getting a bit closer towards the collapse of the stock, bond, and real estate bubbles.
Consider some of the following CNBC screenshots from Friday, beginning with the release of the March labor report.
The non-farm payroll figure for March came in at 103,000 vs. an expectation of 193,000.
Not a small miss.
Perhaps it’s still early, with one report not being enough to determine a trend. But given that this is exactly what you would expect in a rising-rate environment following a decade of monetary easing, it’s likely to not be a purely random coincidence either.
Also worth noting is that “in addition to the weak March growth, January’s total was revised down from 239,000 to 176,000, though February got a boost from 313,000 to 326,000.”
Again, one month of data is not enough to say that the bubble is popping. Especially when we’re referring to data as flawed as what the Bureau of Labor Statistics produces. But it sure is interesting to see the weak data at the same time rates are going up.
Ironically, just a few hours after the report was released, Federal Reserve chairman Jerome Powell was giving a speech in Chicago, where he indicated that growth is still steady enough to justify further rate hikes.
So despite the labor report and an escalating trade war with China, it appears as if the Fed is still going forward.