Anna Wong, Chief US Economist at Bloomberg Economics, dives deep into the troubling employment data, revealing only 35,000 jobs added over three months. She discusses the implications of this dismal figure and whether it's a fluke or signs of a real recession. Wong also examines tariff impacts on inflation, predicting rising service costs as consumer sentiment improves. Drawing from her time at the White House, she warns that tariff uncertainty may hurt the economy more than the tariffs themselves, and anticipates delays in Fed rate cuts.
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insights INSIGHT
Shocking Payroll Revisions Signal Weakness
Major downward revisions in payroll data shocked experts by showing a sluggish three-month job growth at only 35,000.
This suggests the economy might be weaker than perceived, raising doubts about pre-existing optimistic narratives.
insights INSIGHT
Non-Farm Payrolls Drive Market Moves
Non-farm payroll data is the most market-moving economic indicator in the U.S.
Revisions and flaws in it cause significant uncertainty and can invalidate many models.
insights INSIGHT
Birth and Death Model Flaws
The birth and death model in labor statistics causes imprecision due to outdated assumptions about firm creation.
Gig economy shifts confound this model, leading to overstatements of job gains.
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Anna Wong, Chief US Economist at Bloomberg Economics, analyzes shocking jobs revisions showing only 35,000 jobs added over three months and questions whether this signals real weakness or statistical noise. Using her team's "12 million prices project," she reveals tariff pass-through is already happening with audio equipment up 11%, while services inflation may rebound as consumer sentiment improves. Drawing on White House experience during the 2019 trade war, Wong argues tariff uncertainty damages the economy more than tariffs themselves. She warns we may already be in recession and expects Fed rate cuts delayed until December.
0:00 Welcome and introduction - Anna Wong, Chief US Economist at Bloomberg Economics 1:05 Big picture economy - last Friday's payroll flipped everything upside down 2:58 Forward looking indicators suggest investment picking up in second half 4:06 Massive jobs revisions - 35,000 three-month hiring trend 6:20 Are the revisions a fluke or signal of real weakness? 9:53 Three sectors driving downward revisions - construction, leisure, logistics 11:26 Non-farm payrolls as most market-moving economic indicator 14:05 Why employment data is so error-prone - birth-death model problems 16:48 Monetary Metals ad read 18:00 How Friday's report impacts Fed September meeting prospects 20:00 Fed forecasting - 80% effort on inflation and jobs data 21:18 12 million prices project tracking tariff pass-through 25:00 Services inflation vs tariff impact - the real story 30:00 Top 20% income earners driving swing consumption 32:32 Fed outlook - rate cuts likely delayed until December 34:34 White House experience in 2019-2020 - lessons on tariffs and travel bans 40:00 Markets driven by TACO and FOMO - set for huge volatility 41:02 What keeps Anna up at night - are we already in recession? 43:23 Optimism on tariff narrative shifting and uncertainty resolution 45:00 AI concerns - people in their 20s dropping from labor force
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