Author Archives: Michael Murphy

Dear New World Investor: Last Friday’s July payrolls report showed only 73,000 new nonfarm jobs added, much less than the 104,000 expected. That was the lowest number in 10 months and much less than June’s originally reported 147,000 jobs. Click for larger graphic h/t Yahoo Finance As you know, I think the monthly numbers are mostly statistical garbage. June was revised down from 147,000 to just 14,000, while May was revised down from 144,000 to 19,000. That tells you what’s really going on – the economic models are way behind the real economy, which is tuning down. The -253,000 two-month...

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Dear New World Investor: Tuesday’s headline Consumer Price Index for June was 2.7% year-over-year, an uptick from May’s 2.4% and a tenth above the consensus expectation for 2.6%. The month-over-month increase was 0.3%, also an uptick from May’s 0.1%. The acceleration was widely attributed to President Trump’s tariffs, but my suspicion is other factors are at work and the tariff impact, if any, lies ahead of us. Appliances and household equipment and furnishings prices increased less than 2%, and only make up around 1% of the CPI. Tariffs are not inflationary. Tariffs are a tax, and no tax is ever...

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Dear New World Investor: It’s the dog days of summer. There are a couple of biotech conferences coming up next week, but not much else happening until Corning and PayPal report June quarter earnings on July 29. Then the floodgates open with earnings reports through August – not to mention the next Fed meeting and the first guesstimate on June quarter GDP on July 30. The market analytics firm Vanda Research says retail investors bought $155.3 billion worth of stocks in the first half of 2025. That was a record for the first half of any year. Click for larger...

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Dear New World Investor: Last Friday’s May Personal Consumption Expenditures (PCE) index increased 2.3% year-over-year, a slight uptick from April’s 2.2%. The month-over-month increase from April was 0.1%. The Fed’s favorite inflation indicator, the core PCE that excludes changes in food and energy prices, was up 2.7% year-over-year. Both the April increase and the consensus expectation for May were 2.6%. Month-over-month, the core PCE rose 0.2%, also a tenth above both the April increase and the consensus expectation for May. Click for larger graphic h/t Yahoo Finance “Supercore” PCE is a measure of inflation that focuses on the prices of...

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Dear New World Investor: Last September 16, CareerBuilder and Monster merged. The CEO said: “The combination of CareerBuilder and Monster brings together two strong, trusted, complementary brands to create a job board with greater scale and reach.” On Tuesday, a short nine months later, the merged company filed for Chapter 11 bankruptcy. What happened? This: Click for larger graphic h/t @DiMartinoBooth The latest Conference Board Consumer Confidence report said that households’ “appraisal of current job availability weakened for the sixth consecutive month” and consumers “were more pessimistic about business conditions and job availability over the next six months.” Weak help...

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Dear New World Investor: Well, you all just set a personal best – consecutive Fed days without panicking – as Chairman Powell et. al. held interest rates steady Wednesday at 4.25%-4.50% for the fourth meeting in a row since last cutting in December. They kept their projection for two rate cuts this year, which is two more than we’re likely to get unless the labor market falls apart. Click for larger graphic h/t Yahoo Finance They changed language that previously said “the risks of higher unemployment and higher inflation have risen” to “Uncertainty about the economic outlook has diminished, but...

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Dear New World Investor: May’s nonfarm payrolls jobs report showed the US economy added 139,000 jobs, more than the consensus expectation for 126,000. The unemployment rate held steady at 4.2%. The April number was revised down from 177,000 to 147,000. So in spite of President Trump’s tariff volatility, the labor market remains pretty resilient. It has softened for sure, but there’s no big retrenchment. At least so far. Click for larger graphic h/t Yahoo Finance What would you do next Wednesday if you were Chairman Powell? I’d watch and wait. The labor market isn’t falling apart and, just as Wall...

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Dear New World Investor: As you know, the core Personal Consumption Expenditures Index (PCE) strips out the volatile food and energy components from the headline PCE price index to provide a clearer picture of underlying inflation trends. I refer to the core PCE as the Fed’s favorite inflation indicator, because they have said it is. But there’s an even more refined measure, the Supercore PCE. It is a measure of inflation that focuses on the prices of core services like healthcare, education, recreation, and financial services that are less influenced by temporary supply shocks. It excludes energy services and the...

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