Omicron Effects Jobs Market, Service PMI Flying High, and Signs of a Bubble
December 7, 2021 | FIRESIDE CHARTS
More signs of a bubble-like market are showing up so let’s take a look. While the jobs market disappoints, the markets seem to be focused on Omicron and what Covid is likely to do. A lot of volatility in both directions warrants caution as timing (in hours, let alone days) can have a massive impact.
1. U.S. payroll growth missed expectations (210,000 vs 550,000) as Covid re-asserts itself in the restaurant and entertainment businesses:
Source: T@WSJ from 12/6/21
2. Our service economy is flying with last months PMI setting a new record high:
Source: TheDailyShot from 12/3/21
3. Another sign of a bubble-like peak?
Source: TheDailyShot from 12/3/21
4. So, let’s compare to the past bubbles:
Source: @saxena_puru from 12/6/21
5. Demographics play a huge part in our economy. Children cost a lot of money (food, house, transport, toys/gifts/sports, clothe, educate, etc) and estimates are up to $500,000 per child pre-college. As these spending trends grow, politicians, corporations and economists all take credit. But if you were old enough to experience the 1970’s, you remember that a dearth of births can tank an economy and there is little anyone can do about it. There is just less consumer spending (which is ~70% of our economy) on kids and that can cause the “stag” in stagflation. Now, based on this chart, are the markets ahead of themselves?
Source: TheDailyShot from 12/6/21
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.