Post by Marron's Inverse Index

Stephanie Roth at Wolfe Research, LLC today, Oct-07, on Bloomberg: The U.S. economy is currently navigating a government shutdown, which is complicating the analysis of a slowing labor market where official data is unreliable and may be masking a more stable jobs trend, while consumer spending remains resilient despite the gradual impact of tariffs. Payroll Trends and Data Reliability ..Current payroll data (especially summer data) likely misrepresents actual economic conditions ..The true trend in payrolls is estimated closer to 60,000 jobs (not the $29,000 three-month average) ..60,000-70,000 jobs is considered the "break-even pace" and would represent a steady state trend ..Recent August jobs figure of 17,000 is within margin of error and could easily be 60,000 if measured at the actual trend pace ..Significant data revisions are creating uncertainty in economic analysis Government Shutdown Impact ..October economic data will be severely compromised due to government workers being furloughed ..September data remains "clean" and will provide an accurate economic reading before the shutdown effects ..Furloughed government workers should technically show up as unemployed, but survey response accuracy is questionable ..The shutdown could impact unemployment rate by 0.2-0.4 percentage points ..Approximately 150,000 negative payrolls are expected for federal workers due to the shutdown Consumer Spending and Tariffs ..Recent upward revisions to consumer spending data indicate consumers are "still feeling largely okay" ..Consumer spending patterns suggest continued economic activity despite other concerns ..Tariff impacts are being gradually passed on to consumers rather than all at once ..Currently about 40% of expected tariff costs have been passed to consumers ..Full pass-through of tariff costs is not expected (will likely never reach 100%)