September 2nd - September 5th Overview of economic data: Loss of objective "reason", subjective "malicious" speculation version!
Given the "game" of GDP and PEC data this week, I have lost "interest" in the economic data before and after the interest rate cut, but let's still take a quick look.
Let me first make a "malicious" guess. Since the Federal Reserve can create data, market sentiment and media to maintain stability and build momentum,
Since I have chosen to be "shameless", then I will be "shameless" to the end. All the data, big and small, after my "malicious" speculation may be "good for" the US economy.
Let’s take a look at next week’s data:
September 2, Monday is Labor Day in the United States. There is no data and the U.S. stock market is closed.
September 3,
The important data ISM Manufacturing PMI, the previous value was 46.8 and the expected value was 47.5. I guess it is in line with expectations. This data proves that the US manufacturing industry is recovering at an accelerated pace. Of course, it cannot be exaggerated. Although the recovery is accelerating, it is still below 50. Only when it returns to above 50 is it an expansion period.
Small data, service industry PMI service industry final value, the previous value was 48, the expected value was 48, and the blind guess is that it may be greater than 48. The service industry is the foundation of the US economy. A good service industry is also a manifestation of a good economy.
The monthly rate of construction expenditure in July was -0.3% in the previous month and 0.1% in the expected month. Needless to say, it was in line with expectations. Construction expenditure is the main data used for infrastructure. Only when the economy is good and the government has money will it be willing to invest in infrastructure.
September 4,
The main data shows that the number of job vacancies in the past seven months was 8.184 million, and the expected number was 8.10 million. The blind guess was in line with expectations.
How to interpret this data?
The negative interpretation of job vacancies is a decrease in labor market demand and a cooling of the labor market.
Positive interpretation: Under the interest rate cut cycle, the economy has landed and the growth rate has slowed down, which naturally reduces the demand for recruitment by enterprises. Another explanation is that the unemployment rate has dropped, leading to a slowdown in demand. The unemployment rate expectations this week have indeed dropped, as you know.
Small data, such as factory orders in July and durable goods orders in July, will basically meet expectations, because meeting expectations means that factory efficiency has improved, production performance has improved, and the economy is stable.
September 5,
The main data, ADP employment, the previous value was 12.2, the expected value was 14, and it is a blind guess that it is in line with expectations. If the previous data is to assist in lowering the unemployment rate on Friday, then the small non-farm data is also likely to meet expectations and show employment growth.
The initial unemployment claims on August 31 are basically negligible, with a small probability of continuing to decline, demonstrating the health of the labor market.
September 6,
Key employment data, unemployment rate and non-farm payrolls,
The unemployment rate was 4.3% in the previous period and expected to be 4.2%. The non-farm employment was 11.4% in the previous period and expected to be 16.5%. I would guess that the unemployment rate is likely to return to 4.2%, reducing the possibility of expectations of an economic recession due to the increase in the number of unemployed people. The previous theory of economic recession was also caused by employment data. Now that the employment data is good, the possibility of an economic recession is greatly reduced.
As for non-farm employment, it may not be as high as expected, but it will be higher than the previous value, which is also data that shows good employment.
As for other subsidiary data, the annual/monthly wage rate has increased slightly. Although this will bring pressure on inflation, previous data have gradually proved that US inflation has weakened from the supply side. If the pressure on the supply side continues to weaken, wage growth will instead promote consumption and stimulate economic growth.
Summarize:
This week's data has basically lost its objective interpretation. As I said at the beginning of the article, it is just a subjective and "malicious" guess. If it is really as I said, no data, big or small, is missed, and all of them show that the US economy is "good", then the data before and after the interest rate cut will really lose its reference value.
The "malicious" speculations I made above are all interpreted based on highlighting the "good" U.S. economy. Whether they can be verified or proven wrong, we'll see next week.
Especially the unemployment rate and non-farm data. In fact, the layoffs of major well-known companies have been exposed recently. If the unemployment rate rises and the employed population increases in this environment, it would be really "cute"!
I will verify the answers to the above data one by one and give feedback next week. I hope I can be proven wrong, at least to prove that the data is still authentic!
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