Fiscal Policy & Economic Growth - The analysis suggests tariffs are running at an annual rate between $400 billion and $500 billion, potentially improving the deficit, but real GDP growth is considered the key to significantly reducing the deficit as a percentage of GDP [1] - The report anticipates real GDP growth will surprise on the high side of expectations later in the year and into 2026, driven by innovation platforms like robotics, energy storage, AI, multiomic sequencing, and blockchain technology, all catalyzed by AI [1] - The analysis highlights deregulation, particularly in crypto, AI, and nuclear energy, as a significant factor for economic growth, with tax changes encouraging manufacturing and innovation through accelerated depreciation schedules and full expensing of equipment, R&D, and software [1] Inflation & Monetary Policy - The report indicates that while inflation may seem stuck in the 2% to 3% range, innovation-driven productivity gains could lead to deflation in the coming years [2] - The analysis points out that M2 money supply growth has significantly dropped compared to the COVID boom, and the velocity of money is declining, potentially diffusing inflationary pressures [2] - The yield curve, measured by the two-year Treasury yield relative to the three-month Treasury yield, indicates tight monetary policy, which is expected to have disinflationary or deflationary effects [3] - True inflation CPI is reported at 19%, even with tariffs factored in, and consumer inflation expectations are expected to decline [3] Market Indicators & Investment Strategy - The analysis notes that manufacturing has been contracting for the last three years, and services are not in great shape, signaling potential economic concerns [4] - The report highlights that AI-powered capital spending is increasing, supported by new tax rules, while the trade deficit is being addressed [5] - The analysis observes that pending home sales are deteriorating, and new home inventory is high, potentially leading to price cuts and impacting the CPI [5] - The report suggests that the return on investment in the US is expected to increase due to innovation, tax laws, and deregulation, potentially strengthening the dollar [5] - The analysis notes that corporate profits are healthy, but quality of earnings and harnessing new technologies will be crucial for future growth [5] - The report observes that commodity prices are going nowhere, and gold is breaking out to all-time highs relative to metals, possibly signaling deflationary concerns [5]

Right, we are just a few seconds away from that August employment number. Rick Stanelli is standing by. He's been watching all of this as we get ready to go to this number.Rick, we're going to send it over to you. Wow. And the data is actually coming across the wires on time.Good job, BLS. Change in Knob Farm payrolls for the August job jobs report. 22,000 22,000.Interest rates started dropping long before this data was released. And last month, well, a subtle revision to 79,000. And if you look at the two- ...

Summary of Employment Report Preview Industry Overview - The report focuses on the **US labor market** and employment trends in **North America** as of July 2025 Key Points and Arguments 1. **Payroll Growth Forecast**: - Payrolls are expected to rise by **100,000** in July, with private payrolls contributing the same amount while government payrolls are projected to remain unchanged [1][6][8] 2. **Unemployment Rate**: - The U3 unemployment rate is forecasted to increase slightly to **4.2%**, remaining unchanged from a year earlier despite slower payroll growth [1][22][25] 3. **Labor Force Participation Rate (LFPR)**: - The LFPR is expected to hold steady at **62.3%**, but there are concerns that it may exert downward pressure on the unemployment rate due to declining participation, particularly among foreign-born individuals [1][23][29] 4. **Average Hourly Earnings**: - Average hourly earnings are anticipated to rise by **0.3% month-over-month**, with a year-over-year increase of **3.8%** [1][21][18] 5. **Sector-Specific Insights**: - The slowdown in private payrolls is notable, averaging **155,000** per month in 2023, **130,000** in 2024, and **107,000** in the first half of 2025, primarily driven by the services sector [7][8] - Manufacturing payrolls showed a slowdown in Q2 but did not experience a sudden stop in activity, while construction payrolls remained soft [7][8] 6. **Government Employment Trends**: - Federal government hiring is expected to slow, with a projected decline of **20,000** jobs in July, while state and local government payrolls are expected to see gains [8][9] 7. **Job Market Dynamics**: - New jobless claims are stable compared to the previous year, indicating limited layoffs, while job openings remain high, suggesting strong labor demand [9][14] 8. **Breakeven Payroll Pace**: - The breakeven pace for payrolls has decreased from **210,000** last year to **140,000** this year, with expectations that it could slow to **70,000** by year-end if deportations increase [24][27] Additional Important Insights - **Risks and Uncertainties**: - Upside risks include a higher job openings rate potentially leading to faster hiring, while downside risks stem from the ongoing slowdown in private payrolls and potential seasonal adjustments affecting payroll data [38][39] - **Future Federal Reserve Actions**: - The report suggests that slower payroll gains are unlikely to prompt immediate rate cuts by the Federal Reserve, as they remain focused on the overall labor market conditions [37] This summary encapsulates the essential insights from the employment report preview, highlighting the current state and anticipated trends in the US labor market.