Legendary economist Dr. Lacy Hunt, EVP and Chief Economist of Hoisington Investment Management Company, joins Julia La Roche on episode 192 for a wide-ranging discussion on the deteriorating economy.

In this episode, Dr. Hunt explains that non-farm payrolls overshot by five standard errors, making it the worst miss since a 9 standard one for 2009, during the GFC recession, and marking another bureaucratic failure. According to Dr. Hunt, the reported overshoot of 818,000 was based on an internal seasonally adjusted series, but based on the nonseasonal adjusted data, the overshoot was actually 915,000. Dr. Hunt explains that the non-farm job miss means that productivity will be revised up while unit labor costs will be revised down. Personal income and Gross Domestic Income will be revised downward, and the personal saving rate will be reduced from its already very depressed level of 3.5%.

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Timestamps: 

0:00 Welcome Dr. Lacy Hunt

1:16 Macro picture 

3:37 Downward revision in non-farm payrolls is significant 

5:45 The 818,000 error is actually 915,000, according to Dr. Hunt's model

9:00 The economy is deteriorating 

15:24 Net national saving shows we have a problem

21:40 The seriousness of negative net national savings 

25:00 Decline in the standard of living

34:50 Possible solutions, shared sacrifice 

40:00 Fiscal dominance is a very real possibility 

45:40 Fed is behind the curve 

47:37 Where are we in the economic lifecycle 

49:44 The global economy