Us Economy Added Just 22,000 Jobs in August, Unemployment Highest in 4 Yrs

What's interesting is that Trump should be happy with a weak labor market, as it helps him with that interest rate on debt problem he seems to have.

From Wikipedia:

> Antoni graduated from St. Charles Borromeo Seminary with a Bachelor of Arts.[3] He then graduated from Northern Illinois University with a Master of Arts[3] and later a doctorate in economics in 2020

How can someone get a doctorate in economics when they studied "Bachelor/Master of Arts"?

An insurrectionist recommended by Bannon, go figure

A critique of his thesis:

* https://old.reddit.com/r/badeconomics/comments/1n23ixd/ej_an...

Won't the stock market go only up, if interest rates are cut?

(For the avoidance of doubt, I'm not saying this is either a good or bad thing)

The rate cut is already completely priced in. Also, almost every market crash has started with a rate cut. It's a sign of economic distress.

Rate cuts are priced in at about 100% for a 1/4 point. It might go up for a 1/2 point, but that may also signal fear which could have the opposite effect. I think it's hard to say at this point.

- high unemployment means the fed will do a rate cut, so markets go up

- low unemployment means the economy is booming, so markets go up

hmmm... the more I learn about the stock market, the more I believe in the limits of human understanding

> the USD will become even weaker

You imply that it is already weak, but this doesn't seem to bear out considering current vs historical exchange rates.

Overarching goal seems to be increasing the ratio of capital to labor.

Labor is decreased by launching immigrants down the garbage shoot.

Capital increase by tariffing foreign goods which hypothetically might spur domestic production investments.

Labor being rare relative to capital should increase employment.

But really, no guarantee the capital doesn't just flee to the other 95% of the world where they can import capital equipment needed to make stuff for much cheaper, create a cascade effect, and gut the USA even worse. Especially since we have absolutely no clue what the tariffs will be 1/5/10 years from now.

> Is this an attempt to reduce the infamous American consumerism?

Ngl I didn't expect degrowth emissions reductions from this administration. But I can dig it.

I think your assumption that there's even a plan is pretty optimistic

JPow has to be annoyed. He was about to stick the perfect soft landing after killing inflation, then Trump showed up and through a tariff grenade into the economy. And, ironically, the fed was already on track to cut rates until the tariff nonsense. Now when rates are cut it's going to be because we're heading into a self inflicted recession instead of the soft landing we were headed towards before. The growing worry now is stagflation again with rising prices and slowing economy. I guess one bright spot is that we won't really know how bad it gets since it seems anyone who reports real numbers is getting fired. Fun times!

Trump is a populist president elected on the back of disparaged unemployment-belt blue collar workers.

That's why he hates fentanyl (these places have insane opiate use rates), that why he loves coal (symbolic of the "great days"), that's why he hates immigrants (undercutting wages), why he hates china (that's were the factories went), and that is why he loves tariffs (American manufacturing protectionism).

Watch a video showcasing what West Virgina is like today, listen to what the people who live there say, and you can totally understand what Trump is trying to do, and why these people treat him like a messiah.

I'm not saying Trump is a messiah, or a good leader, or that the people in west virgina (or categorically adjacent places) are level headed. But simply that his plan is coherent if you put yourself in the shoes of the people who are clinging to the past and were left out of the future.

No this is an attempt to shift the burden of taxation to the middle class and poor. It is a consumption tax pure and simple. If you tax everything like sneakers and toothpaste the tax burden shifts to the middle class and poor because a billionaire can make income 100 times larger than a middle class person but he does not use a hundred times as much toothpaste and does not buy 100 times more sneakers.

This of course will depress consumption which will seriously damage the economy but the current administration just does not have the brains to consider these effects.

Furthermore, the immigrant chasing is seriously reducing jobs openings. This seems quite the opposite from the intended effect. But it is done so chaotically and with such cruelty that it is flat out destroying businesses rather than allowing them to hire citizens to replace illegal immigrants.

It occurred to me that tariffs are really a backdoor way of introducing consumption tax (aka sales tax, VAT, etc). It has been a conservative policy goal for many years, as the conservatives believe that income tax penalizes entrepreneurship, but the politics make it virtually impossible to switch to because consumption tax is regressive, and it is a huge change. The tariffs debate and the general political atmosphere created a misdirection: voila, we have both income and consumption tax! The next development will be the politicians discovering to their horror the high levels of taxation, and abolishing the income tax. Brilliant!

Weakening USD was and is still part of Trump's plan. Paying the deficit back with a weak dollar while raking in tariff revenue.

Trump is a real estate guy. His real estate is worth more with high inflation and low interest rates ( like in 1970)

See: Volcker shock.

This is an attempt to do repeat what countries like Turkey like tried. They often think cut interest rates -> increase demand -> better employment.

But often they find that combination of worsening inflation and unemployment matched with cutting interest rates is a bad situation to be in. There is often no good way to come out of this. You end up in a cycle of : High unemployment -> cut rates -> employment improves but causes hyperinflation -> increase rates to cool markets -> high employment.

Blunt tariffs is playing a large part. and once Jerome Powell leaves and replaced by a crony is when the real problem will start.

Received wisdom of central banking is to worry more about inflation than the economy, so leave rates be. Or increase if inflation gets worse.

Hang on a minute, the tariffs mask the devaluation of the USD from actors within the economy?

Ron Vara's book actually outlines a whole bizarro universe where devaluing USD constitutes a strength, from some idea that the best way to compete with China is by putting ourselves where China was 30 years ago. So yes, an outright goal of theirs is to weaken USD. I have no idea if they earnestly believe this nonsense, or if they are just getting paid by our adversaries to sell it to the public.

>I believe in zero-sum economics, I.E, I don't believe that there can be a "global market crash", all crashes have an equal and opposite effect somewhere else. I'm expecting to hear that jobs are booming in some other countries. In fact, there is data on this.

Yeah this isn't right. Changing policy can reduce the value of assets across the board, everywhere. It's very possible. The money just disappears because those assets are no longer worth the same in the new environment. Sometimes everyone loses.

I would suggest that 1929 is a pretty decent example of a global crash.

Economics can be positive sum, zero sum, or negative sum, depending on the situation.

But in this instance, if the US is removing itself from the global scene, there may in fact be booms in other places.

How much are you timing when to buy vs buying in little bits continuously? If you just buy a set amount per month your cost will balance out better I think

I believe USD has devalued by a comparable amount since Liberation Day, so a big portion of that is the USD falling relative to stock.

Edit: https://www.morganstanley.com/insights/articles/us-dollar-de...

This is why you dollar cost average. Buy every month, be in it for the long haul.

Trying to time the market is futile unless you have insider information. Then it's illegal.

Remember that assets rise to counter inflation. So if the market believes there will be inflation, it will naturally rise to counter that.

People are trading dollars for shares to shelter from the dollar losing value.

Ideally, you'd set your asset allocation some time ago, and you'd mostly be in or out already, with surplus income going in every paycheck (or so). You only sell when you shift your asset allocation or need money for something, and you adjust your allocation (and risk profile) depending on your future needs.

It's good to have some humility and accept the market is smarter than you. The best price you're going to get is today. Every next day it's going to be more expensive by daily (risk free rate + equity risk premium) +/- variance you are not able to predict.

Maybe some people are able to predict it but it's not you.

>When we were kids, my dad felt like he was always the last one to buy into the stock market. He would buy, it would peak, and then it would crater.

But if your dad bought and held when you were a kid he'd be up 1000% now. You simply cannot time the market, ever. But over time, "stocks go up" is pretty much guaranteed. The people in charge won't let it not be.

Stop trying to time it. Auto invest weekly/monthly and never look at the balance.

He sounds like the fictional 'Bob' and likely made out like a bandit, assuming he held.

https://www.wealthmorning.com/2023/09/15/648774/meet-bob-the...

Time in the market beats timing the market.

Apart from the infamous timing the market, there are two adages to keep in mind - the stock market is not the economy and markets can remain irrational for a long time.

The whole tariff cycle has been irrational move. The tariffs were supposedly "removed" even when it was not - there was always a 10% default tariff. Maybe everyone is expecting a rate cut due to this tariff madness.

Is there much to indicate the losses are due to AI.

I see a lot of stories but not a lot to make it clear if that is the case.

I usually see it claimed with legit job numbers, but then very iffy connections to AI.

AI is the smoke screen companies are using to cut costs because they see things slowing down (tariffs and the general admin causing enormous uncertainty), and many are still recovering from all the over hiring during COVID.

> then high unemployment is a good starting point

This strikes me as overly simplistic and optimistic. The real world is not a zero-sum-game where if someone loses someone else wins.

Macroeconomics in today's world is an interconnected hot mess where I wouldn't dare to infer much except for that simple cause and effect chains surely do not work.

What you deduce might be true in an otherwise stable and sunny economic climate, but we're far from that.

- Trumps active hand in messing with the US economy (Going on an immigrant (labor) hunt, firing a FED governor and threatening Powell, buying into Intel, imposing tariffs coughed up by an LLM)

- Unprecedented amounts of money are being singularly invested into "AI" and not much else

- Consumer prices for Americans as a compound combination of tariffs and an expected weaker dollar if interest rates go down aren't playing well with peak unemployment

Taking that all in, comparatively to only a couple of months ago, this setup is by far not the most desirable investment climate in the US for foreign investment.

And while bringing back offshored industries sure sounds nice on paper, I'm wondering how that's gonna play out with a) historically high CoL in the US leading to b) higher wages required for the supposed high quality jobs coming back leading to c) high prices to purchase said goods.

These same numbers come out and are reported on every month. It would be more conspicuous not to report on the August numbers.

Mission accomplished then.

> AI hype is fading too

Source?

I see it growing in my business.