Good Thursday AM,

We are three for three so far this week with employment data coming in weak each day.

Today, U.S.-based employers announced 89,703 cuts in March, up 15% from the 77,770 announced in February. It is up 319% from the 21,387 cuts announced in the same month in 2022, according to global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc. Weekly jobless claims came in at 228k, up from 198k, continuing claims at 1.8 million. The trend of weak employment continues, and the bond market is very aware of this fact.

We touched the support level of 3.25% on the ten-year bond and if we can close below it, there is a considerable possibility of testing 3%. Meanwhile, mortgage bonds are a bit more reluctant to show similar improvement. Just fewer buyers for the product out there. The importance of tomorrow’s jobs report cannot be overstated. The numbers to watch are 240k new jobs, 3.6% unemployment at 4.3% wage growth. Weaker numbers will be the confirmation the Fed needs to hit the pause button and likely push rates down quickly.

It is tough to float into this big of a report.

My gut says the numbers will be weak, but I am not a gambler. Better to lock and float down on improvement. Keep in mind that with tomorrow being Good Friday, equity markets are closed and Bond markets will be subject to much increased volatility.

CNBC was out with a piece this morning on how the unemployment numbers have been cooked for the past two years. Supposedly as a result of the immediate covid response which had impacted the seasonality of the numbers. In the end, there are 267k job losses just in 2023 that have not been accounted for in any report. Hmmm.. I’ll share more on this as it becomes available.

A few other notes on employment before tomorrows jobs report.

Quitter Confidence

A smaller share of workers are handing in resignations this year than in April 2022, when the percentage of workers quitting their jobs matched a record high of 3%.

The diffusion index, part of the monthly jobs report, is a gauge of broad-based job gains and losses across industries. A reading above 50 means more private industries gained jobs than lost them in a given month, while a reading below 50 means more industries cut jobs than added them.

The February diffusion index showed more industries were growing than shrinking. But it fell to its lowest level since April 2020.

Online Job Postings

Real-time job-postings data from employment websites such as Indeed.com and zipRecruiter offer timely clues about employers’ future hiring intentions. Some economists say that companies, in response to slowing sales and heightened uncertainty, will pull down job postings without laying off workers.

Job Listings Abound, but Many Are Fake

Please remain safe and stay healthy, make today great!