Not that anyone cares that much today, but for the second consecutive time the American job market is recording a surprisingly fragile figure compared to expectations.


For September, the BLS reports a gain of 194,000 jobs with 317,000 individuals. The consensus was over 450,000 jobs with Goldman analysts forecasting over 600,000 jobs.

Of course, the upward revisions have improved the previous 2 months but the dynamics are clear, we have extremely difficult months ahead of us, also given the slowdown in consumption.

We are still less than 5 million lost seats since the start of the pandemic.

The average weekly hours of all private employees increased by 0.2 hours to 34.8 hours. The average weekly hours of all private employees providing services remained stable at 33.6 hours. Producers’ average weekly hours remained stable at 40.4 hours.

Year over year, wages increased from 29.50 to 30.85. This is a gain of 4.58%.

We are not here to repeat the reasons why the increase in wages is seriously distorted by the dynamics of the pandemic, by the lack of skilled labor, we leave to others the illusion that wage inflation has started.

Participation in work proves that phantom unemployment is a reality in America, the official unemployment rate dropped to 4.8%, just an unimportant figure.

If you start counting all the people who want a job but no longer look for it because you are disheartened, those who have left the lists because the unemployment benefits are finished, you discover that unemployment is actually higher than 10%

Even Powell admitted that many truly unemployed people are counted as still at work.

The biggest negative contributor was the loss of 161,000 state and local government education jobs. The private sector added 317,000 jobs in September. Employment in public education fell by 431,000 from September 2019 levels, a decline of 4.8%. But schools are back to full capacity practically everywhere.

Continued wage growth, especially for low paid workers, is fueled only by the leisure and hospitality sector, the annual rate of wage growth over this period was 18.1 percent, which explains it all.

In summary, the limit to employment growth is largely on the supply side, not a lack of demand. Workers are not returning to low-paying jobs, at least not without getting significantly higher pay and improved working conditions.

This explains the data on the ephemeral increase in wages.

Most states turned off their subsidies taps a few months ago, the latest in September, if those benefits were discouraging people from looking for work, we should have seen most of the effect of their termination by September.

In addition, speculation on the supply chain, sectors where supply disruptions limit employment. It is not possible that suddenly many supply chains will experience shortages and blockages in many sectors, the pandemic has nothing to do with it.

Many aspects of the employment report that have given ambiguous signals about the short-term future of the economy, many are starting to speak of recession.

The fairy tale about the debt ceiling postponed to December is not enough to justify the bad data that led the business banks to negatively revise the growth prospects for the next quarters.

According to the latest data, consumer credit is very weak, the horse does not want to drink.

In the meantime, the bets on reflation and stagflation continue, the dollar remains strong, Poland is putting the fragility of the euro back into play, not only Poland but also 12 states that want new walls against immigration and the recent resignation of the frugal Austrian on duty, they tell us how fragile democracy in Europe is.

We remain convinced that this is a simple illusion, the higher rates rise and the more terrifying the deflationary implosion will be, we call it stagdeflation rather than stagflation.

It will take patience, but we have no doubt debt deflation is the main secular trend.

The manuscripts from the beginning of the year are more than enough to understand how to seize it, the last great opportunity, the most colossal in history, because today they are all on the wrong side of a boat that is about to sink again.

I remind all those who need that ICEBERGFINANZA is also a 360 degree consultancy, in the midst of this perfect storm.

By clicking on the link below and sending an email to [email protected] it is possible to have strategic advice on possible macroeconomic and financial developments in the coming months, in addition to receiving our manuscripts. Good day Andrea

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