You think the official BLS NFP series is worrying, consider the alternatives:
Figure 1: BLS establishment nonfarm payroll (NFP) July series (bold blue), Jun series (light blue), Philadelphia Fed early benchmark (green), and experimental BLS household series adjusted to NFP concept, with smoothed population controls, centered 3 month moving average (tan), all in logs 2024M10=0. Source: BLS via FRED, BLS, Philadelphia Fed, and author’s calculations.
Figure 2: BLS establishment private nonfarm payroll (NFP) July series (bold blue), June series (light blue), and ADP series (tan), all in logs 2024M10=0. Source: BLS, ADP via FRED, and author’s calculations.
Finally, the household series:
Figure 3: Experimental BLS household series, with smoothed population controls, (bold black), and centered 3 month moving average (tan), all in logs 2024M10=0. Source: BLS via FRED, and author’s calculations.
The ISM services index for July came in at 50.1 – flat growth.
Prices index 69.9, highest since October 2022.
Employment index 46.4 vs. 47.2 in June. That’s 4 sub-50 readings in 5 months.
So output is stalling, employment falling and prices rising. Timing? Looks like tariffs, maybe immigration.
The earlier factory survey told much the same story, only for factories, output is contracting.
I went on “recession Watch” yesterday in response to this survey.
I give the services Survey a 75% weighting and the manufacturing survey a 25% economic weighting. This month, for the first time since the pandemic lockdowns, the economically weighted three month average of both the headline and new orders components of the two surveys fell below 50, I.e., contraction. Aside from COVID, that hasn’t happened since the Great Recession.
Enough other leading indicators, e.g., goods-producing jobs, heavy truck and light vehicle sales, have also turned down to warrant such a watch. If the downturns are sustained another month or two, and joined by a few other leading indicators, especially initial jobless claims, that will turn into a “warning.”
“Looks like tariffs, maybe immigration.”
you notice even the cheerleaders like rick stryker and bruce hall have disappeared from the discussions. even their corrupted minds realize what is happening is indefensible.
the immigration issue is a problem on multiple fronts. labor force shrinks, so costs go up. agriculture is getting crushed. and the increasing number of stories about the civil rights violations of hundreds of us citizens arrested during these assaults on democracy is extremely troubling. federal officers are violating civil rights with impunity. and lying about the proceedings with felony assault charges. the number of those charges that have been dropped only after video evidence showed officers were lying about the incident is tragic. right now not a single officer has been found liable for intentionally kidnapping and detaining us citizens off of the streets for no reason other than profiling. terrible.
we just did a round of belt tightening in our house. still going to finish a couple of major projects that were already in the pipeline. however, we just cut back about $1000 per month in expenses. now we have a very large monthly budget, so that is not such a big deal. but I can see a lot of households cutting $500 a month going forward. it will be very apparent if cuts have manifested as the holiday spending season appears (or not appears, as the cutting goes).
One down, four to go:
https://www.nytimes.com/2025/08/05/us/politics/trump-bessent-fed-chair-powell.html
Trump is slow making up his mind so now there’s the possibility that he will put a placeholder there for the remainder of Kugler’s term and replace them with the real Fed chair nominee in January.
Or he could put a try-out candidate in there through January and see how loyal they are with the option to change his mind. I doubt he can get anyone confirmed before the September meeting and that only leaves two more meetings before the end of Kugler’s term.