Business

With soft survey data scrambling the macro traders minds currently (China manu good, services crash; Canada bad - despite surging GDP?), all eyes swing to US data this morning with Markit's Manufacturing PMI weaker than July (though beating expectations modestly) with a "renewed stuttering of the manufacturing economy during August." However, for those who need some good news, ISM's survey of the same manufacturing economy saw them the most exuberant since April 2011!

The biggest money is made when you identify a major trend and get in early.

In early 2017, we forecast to our clients that the $USD would be collapsing this year. At that time the financial media was rife with “gurus” talking about how the $USD was going to roar higher. Indeed we repeatedly read that “2017 was going to be he year of the $USD.”

Since that time the $USD has dropped like a brick against every major world currency.

One of the justifications for today's poor payrolls report is that calendar effects and seasonal adjustments (which oddly are never mentioned when the jobs report is stellar) had an undue influence. And, to an extent, that is true: as the chart below shows, August (and September) have traditionally been the weakest payrolls month over the past two decades.

Conveniently, there is a simple way to normalize for seasonal adjustments: look at unadjusted data.

We warned readers yesterday to "Prepare For Disappointment" with today's jobs report, and sure enough that's precisely what we got when moments ago the BLS reported that in August just 156K jobs were created, a big miss to the 180K expected, and following a sharp downward revision to June and July, which were revised to 210K and 189K, respectively, a 41K drop combined.

Authored by Charles Hugh Smith via OfTwoMinds blog,

The point is the present system cannot endure.

Despite all the happy talk about "recovery" and higher growth, wages have gone nowhere since 2000--and for the bottom 20% of workers, they've gone nowhere since the 1970s.