What Bond Bull Really Means

As the saying goes, the plural of anecdotes is not data. It might also be said that the plethora of anecdotes does not make for accurate news. Before around mid-December 2018, media outlets particularly those like Bloomberg and the Wall Street Journal anxious to vindicate the technocrats at the Federal Reserve couldn’t print enough stories about the labor shortage.

Barely a day would pass without an article describing the desperate situation for US businesses. Forced to compete for workers, allegedly, managers were becoming creative in trying to lure job-seekers. It was either left unsaid or buried down in the text, how imagination and ingenuity are easily displaced by common sense. Pay workers what they want and like magic, there is no shortage.

The unspoken implication for the labor market was in how employers weren’t doing that. A reasonable analysis would’ve concluded it was because they couldn’t. And if they couldn’t, the economy wasn’t in nearly as good a shape as was being implied by the surplus of anecdotes.

Those LABOR SHORTAGE!!!! stories are themselves scarce of late. In their place are new ones, though still describing the desperate struggles of US businesses. From the Wall Street Journal today:

An Alabama welding supply company is delaying purchases of new gas cylinders. A men’s clothing store in Louisiana has trimmed fall orders for suits and high-end sportswear. An information technology consulting firm in California is holding back on planned hiring.

These are the only reasons to be mildly concerned, in the mainstream analysis. The Journal has apparently taken to the Mario Draghi approach; there is no reason to be alarmed by an economy slowing down from epically awesome levels. “After a banner year, many small businesses are becoming more cautious about their investment and hiring plans.”

It could be something, but it’s probably nothing. Except, it’s no longer a labor shortage. That quietly disappeared into the past, suggesting more something than nothing.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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Gary Anderson 9 months ago Contributor's comment

Bill Gross is retiring. He apparently is throwing in the towel in being hawkish on interest rates rising. Didn't work out so well for him, or maybe just his clients who probably are fleeing for the hills.

Gary Anderson 9 months ago Contributor's comment

Lack of investment usually signals the end of the business cycle. Just how weak business is regarding investment and hiring and inventory investment is just now surfacing.