RenMac RenMac Off-Script: Summer Soft-Patch
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Aug 1, 2025 This discussion tackles the troubling trends in the job market and its implications on the economy. The speakers critique the Federal Reserve's credibility and explore the risk of a rate cut cycle. They humorously navigate British and Canadian slang, bringing cultural insights to the table. Additionally, they analyze healthcare as a surprising investment opportunity and delve into the impact of tariffs on domestic producers. The lively exchange also anticipates upcoming economic data releases, making it a perfect blend of wit and wisdom.
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Signs of Economic Contraction
- Prime-age employment is contracting, signaling economic slowdown despite low unemployment rate.
- Job revisions and declining goods-producing jobs reinforce signs of economic contraction.
Hidden Weakness in Economic Momentum
- Economic momentum was weaker than previously thought due to negative payroll revisions.
- Current economy faces tension of worsening jobs data alongside persistent inflation in some areas.
Use Discontinuities in Jobs Data
- Look for discontinuities in monthly jobs data for recession signals.
- Avoid relying solely on backward-looking employment data; use three-month averages for insight.