In August, the BLS revised 2024 employment growth lower by 818k jobs in its preliminary revision of its Current Employment Statistics (CES). Despite the substantial revision, more reductions to the official employment data are likely to come next month. In January, the BLS will release its final benchmark revision. The preliminary and final revisions to BLS data are done annually. The revisions bridge the gap between the monthly BLS survey data used to report the initial data and data from each state’s unemployment insurance program. While the process produces more accurate results, it recently exposed the jobs market as weaker than investors appreciate.

In a report issued last week, the Philadelphia Fed warns that the 2024 final CES could result in even more

The U.S. dollar index is up over 6% this year, almost all attributable to a post-election surge. As many developed nations show stagnant economic growth or even contraction, the U.S. economy continues to hum. Further bolstering the dollar is the likelihood that the Fed will slow rate cuts or stop them after this Wednesday’s FOMC meeting. Consequently, the Fed is considered more hawkish than other large central banks. Wall Street thinks the dollar will peak and decline in 2025 despite its current strength and economic backdrop. The following is from a Bloomberg article entitled, Dollar’s Trump-Fueled Gains Face A Reality Check Late Next Year:

From Morgan Stanley to JPMorgan Chase, roughly a half dozen sell-side strategists, are now forecasting the world’s

Yesterday’s Commentary touched on the divergence between robust economic growth in the U.S. and near-recessionary conditions in Canada. We highlighted the importance of this to U.S. investors because of the historically strong correlation between the two economies. Unfortunately, Canada is not a one-off instance.

Britain, Europe, and China also exhibit poor economic growth. Given the U.S. operates in a global economy, it’s hard to imagine that economic stagnation in Britain, Europe, China, and Canada will not, at the minimum, provide a strong headwind to U.S. economic growth. Throw in tariffs, and that gust could prove too much for what has been a good run of post-pandemic above-economic growth in the U.S.

We bring up this topic again because Britain

Yesterday’s CPI report was seemingly the last hurdle for the Fed to cut interest rates. With the CPI index matching Wall Street forecasts, the Fed Funds futures market now implies a 97% chance the Fed will cut rates next Wednesday. The data was OK but elicits fears that the downward price progress has stalled.

The CPI rate was 0.3%, a tenth higher than last month. The year-over-year rate rose from 2.6% to 2.7%. Core CPI was +0.3% monthly and +3.3% annually. The graph below shows that the Core CPI (excluding food and energy) has run at .3% monthly for most of the last year after falling precipitously over the prior two years.

While the trend appears to be stalling, some data leads us to believe it is only a matter of time before it declines. For one, CPI

From 2010 through 2022, the US Energy Information Administration (EIA) calculates that global oil demand grew by 10 million barrels per day (Mb/d). Over 60% of the demand growth was due to China’s phenomenal economic growth. For context, American demand increased by less than 10%. The graph below shows that China once drove global oil demand, but that is no longer true.

Given the impact oil prices have on inflation, this is an essential macroeconomic factor to consider over the next five to ten years. Furthermore, a report by China’s national oil company, China National Petroleum Corporation, says China’s demand for oil could peak next year—five years before they had expected it to plateau. The EIA expects a similar peak, with demand from China only growing by