“Davidson” submits:
Employment reports show the Household Survey gained 86,000 and the Establishment Survey gained 336,000. Prior months in the Establishment Survey were revised higher. Three charts display 1) the level of self-employed, 2) the correlation of Household Survey with the SP500 and 3) the Household Survey trend pre-COVID and Vehicle Sales.
Employment continues to trend higher with the SP500 gradually catching up to the concept of economic growth vs recession expectations. Current Household levels remain 5mil below the pre-COVID trend and Vehicle Sales at the current employment level suggest they are ~1.2-1.4mil below the prior level market demand. Vehicle manufacturing continues to have supply-chain issues and the Manheim Used Vehicle Price Index remains elevated. Dealer lots remain well below pre-COVID levels, perhaps 60% below by recent observations. The autoworker strike will make this worse in the near term.
My expectations are for higher 10yr Treasury rates as more investors respond to inflation but the need for transportation to get to work will take precedence with a market undersupplied. Inflation is likely to hold in the 4%-5% range. Till the 10yr Treasury produces a Real return close to Real GDP growth i.e. ~2.8% long-term or a 10yr rate in the 7%-8% range today borrowing at less than this has produced economic growth in the past.
https://www.bls.gov/news.release/empsit.nr0.htm
Total nonfarm payroll employment rose by 336,000 in September, and the unemployment rate was unchanged at 3.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in leisure and hospitality; government; health care; professional, scientific, and technical services; and social assistance.
