Peter Schiff Says 'Illusion Of A Strong Labor Market' Fading Faster Than Kamala Harris' Post-Convention Popularity Spike As Job Openings Slide To Lowest In 3.5 Years
Ahead of Friday’s all-important non-farm payrolls report, prominent economist Peter Schiff issued premonitory comments about the labor market.
What Happened: More evidence of labor market softness emerged on Wednesday as the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey showed 7.67 million job openings for July, lower than June’s number of 7.9 million and the consensus estimate of 8.1 million.
The report triggered a sharp sell-off in early trading, underlining traders’ concerns about a potential weakening of the labor market and in turn the economy.
Commenting on the data, Schiff said, “The illusion of a strong labor market is fading faster than #Kamala’s convention, media-manipulated popularity spike.” He noted that the job openings for July were the fewest since Jan. 2021. The prior month’s number was also revised lower from 8.18 million, he said.
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Schiff’s reference to Vice President Kamala Harris comes as some pollsters signal that she did not receive the bounce they expected after the Democratic National Convention held on Aug. 19-22. Veteran pollster Nate Silver said in a substack post recently that the vice president went from a lead of 2.3 points to a convention-bounce adjusted lead of 1.5 points. That’s not a game-changing difference, but it’s enough to show up in the bottom line.”
Why It’s Important: The Federal Reserve has recently changed its rhetoric, stating that it is now more focused on labor trends, given inflation is largely under control. So, the weak job number should increase the odds of a September rate cut. That said, investors are also weighing the impact of a weak labor market on the economy.
Fund manager Louis Navellier said in a note to clients on Wednesday that job openings, despite the July setback, remained well above unemployment numbers compared to long-term averages. “While trending down, “excess job openings” started from an unprecedented high level. It’s still not a recession signal,” he said.
The August non-farm payrolls numbers due on Friday are expected to show that the economy added jobs at a fairly decent clip of 161,000 following a more modest gain of 114,000 in June. The unemployment rate is expected to the edged down a tenth of a percentage point to 4.2%.
The labor market has chimed along fairly well amid the Fed’s aggressive rate hikes but the recent annual revision that downwardly adjusted job gains over the past year by 818,000 came as a dampener.
Mike Wilson of Morgan Stanley expects better-than-expected non-farm payroll gains of 185,000 for August.
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Posted-In: Inflation Louis Navellier Mike Wilson Peter SchiffNews Top Stories Economics Federal Reserve
