Author Archives: Michael Murphy

Dear New World Investor: Once a year, the Bureau of Labor Statistics benchmarks the March payrolls level to a more accurate but less timely data source called the Quarterly Census of Employment and Wages, which is based on state unemployment insurance tax records and covers nearly all US jobs. As you undoubtedly saw, the annual payroll revision of a record minus 911,000 jobs was even worse than last year’s -818,000. That’s over 1,725,000 phantom jobs in two years. Data had previously suggested the economy added about 1.76 million jobs in the 12-months from April 2024 to March 2025. The new...

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Dear New World Investor: Last Friday’s Personal Consumption Expenditures Index was pretty much a nothingburger. Prices rose 2.5% year-over-year, the same as June despite President Trump’s broad-based tariffs. The month-over-month increase was 0.2%, down from 0.3% in June. The year-over-year core PCE ticked up from +2.8% in June to +2.9% in July. Month-over-month core prices increased 0.3%, the same as June. The CME FedWatch Tool probability of a quarter-point cut in the Fed funds rate at the September 17 meeting actually ticked up a few points to 89.2%. That was in spite of a 0.5% jump in consumer spending in...

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Dear New World Investor: Change is in the air. At Fed Chairman Powell’s final Jackson Hole Economic Symposium speech, he said: “Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.” But, Jerry, what about inflation? “We cannot say for certain where rates will settle out over...

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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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