The Hamrick Brief 8-10-26

What does one trip to Israel do? One trip changes people's faith, their identity, their perspective. One trip changes the response when people chant from the river to the sea. One trip changes how people see right and wrong. One trip changes the idea of home. One trip changes everything. And one donation is all it takes. What does one trip to Israel do? One trip changes people's faith, their identity, their perspective. One trip changes the response when people chant from the river to the sea. One trip changes how people see right and wrong. One trip changes the idea of home. One trip changes everything. And one donation is all it takes. Mike Drop, hosted by former Navy SEAL, Mike Ridland. What is your take? Was it what you expected? Oh, it was the best thing ever. It was something I always wanted to do. If you show me a clear goal, I'm like, okay, I can do that. Master Chief. He's like, you realize there's about 1% chance that you're making a 3%. That's all I need Master Chief. My platoon went home early, and I just went up to my chief, and I was like, I'm not going home. Turns out I'm staying. That's when we go to war. Yeah, I was like, okay, I could get used to this. Mike Drop, follow and listen on your favorite platform. Good Monday morning to you. Welcome back to first news. It is the 10th day of August. It's just about 39 minutes after 7 o'clock. And now joining us on the American League Detection phone line is Mark Hamrick, the chief economic analyst for the Hamrick Brief, which you can now find and sign up for. You can do that today. You do it at the hamricbrief.substack.com is where you find it. It sends out some great information all across the entire week. Anything that goes on, he's sending us some good info out. But Mark, welcome back to the show. How you doing this Monday? Well, I'm doing well. I feel like I should say welcome back to you as well. It's good to hear her voice again. Yes, I was gone for a couple of Mondays, so I was enjoying some fishing and beach time. It was very nice. Nice. Glad to be back on the radio with you. And, of course, Mark, obviously the big story this morning is the July jobs report that came out on Friday. Not a very pretty picture, it didn't seem. What did you see when you looked at those numbers? I think it was down 23,000 jobs. But why did we lose those jobs in July? Is there an easy answer on that? Yeah, if there were a thought bubble above my head in cartoon style, there would have been an asterisk, a question mark, pound sign, a dollar sign, maybe a couple more. I fully understand. But at any rate, yeah, it was disappointing to say the least. We want to see jobs creation. We didn't get it in this report. And there were some anomalies in it that could be indicative of maybe we're getting some... noise and not a good signal from it among the chief reasons was

leading us to the downside was a decline in local government education jobs. That was a decline at 50,000. So the headline number was down 23,000. But of course, if you had robust jobs creation elsewhere, that would have made up for that, right? And we didn't have that either. We had a decline in financial services. We had a decline in retail. We had another decline in leisure and hospitality. So the unemployment rate went down, and again, that is a false signal because we lost labor force participation for your people working and looking for work. So there wasn't really a lot to like in this report, and there was a lot to dislike within it. Yeah, that's definitely what it sounded. The other thing that I heard as this report came out on Friday was it sounded like there were some pretty healthy revisions to some prior months as well. Is that correct? Or, and certainly larger visions that speak to unhealthy in the job market because we've had a total of 103,000 jobs paired away for the previous two months. So, yeah, I mean, you've got the miss on the headline number of payrolls, and then you get 103,000 jobs taken away for the months of June and May. So now we're averaging 61,000 jobs so far a month in 2026. Now, we should probably talk about supply and demand of labor because what's been interesting is, as we've seen less legal immigration to this country, obviously reduced illegal immigration as well. That has resulted in less demand and supply of labor. So what are we talking about ultimately on the bottom line for that? It takes fewer people to be added to payrolls to essentially keep the unemployment rate stable. We did obviously lose ground there, but we're still in the low 4% range. And so what is break even? We don't really know, but we think it's somewhere, economists broadly think it's somewhere between zero jobs out of a month and let's just say 50,000 jobs added a month. Okay, so we're talking with Mark Hamrick this morning. He's the chief economic analyst for the Hamrick brief. Mark, so earlier in the week, so you've got the July jobs report comes out on Friday. Obviously, that's kind of a bigger look at everything. But the ADP report came out midweek with the private payrolls for July. Did that kind of mirror what we saw in the July jobs report? Well, it wasn't as bad, but it also wasn't anything to write home about. So ADP, which measures the... private sector doesn't include the government sector that, in this case, dragged down the U.S. government's depiction of the job market. ADP certainly did reinforce what we've been talking about for some time, which is the low-fire, low-hire job market. Employers added just 44,000 jobs in the month below the roughly 75,000 that was forecast and down from a revised 95,000 in June. Where you do see job growth, it was narrow once again. Services added 47,000 positions according to ADP. Goods producing employers lost 3,000. That includes the manufacturing sector. So, yeah, this is...

It wasn't quite as downbeat as the U.S. government's version, but it also wasn't flashing a big green light. Sure. Now, I know that the Fed, that they watch all the inflation type reports very closely, the CPI, the PPI. How heavily does the Fed lean on the jobs information when deciding what they might do at their next meeting as far as the interest rate's concerned? I think Federal Reserve chairs would say that, first of all, have to be mindful of their so-called dual mandate, and that really is prioritizing a good job market, or in their case, maximum employment is the verbiage, and then stable prices, the opposite of what we've been experiencing in recent years, where prices have been spiraling up. But they view the job market as a, we'll see what they say, you know, sort of as they go out and about and speak even beginning today in reaction to this report. They would say we don't want to make too much of a single data set, including Friday's jobs numbers, but it would be something to watch. And along those lines, they look at everything else. They look at the new unemployment claims, which have recently fallen to the lowest level since 1969. even though the labor force has grown by 105%, meaning we have about double the size of the working segment of the U.S. population compared to when that measurement was taken in 1969. So the other part of it is, as you said, looking at inflation, and we get two of the main three readings on inflation in terms of collections of data this week. That's the consumer price index and the producer price index, and soon to follow then. After that is the personal consumption expenditures prices index, which in the past had been the Fed's preferred gauge of inflation, but because they seem to have task forces for task forces, we don't know exactly what they're looking at primarily for an inflation gauge these days. That was the Kevin Warsh phone ringing in. He wanted to speak. I thought it might have been Batman, so it's all good. When is the next Fed meeting take place? That's at the end of September. Okay. Got some time. It's quite a ways off still. You touched on it, but how did the weekly unemployment report look? Any surprises there? It sounded like I think you said low levels historically. Yeah, so that continues to be a good thing to watch in the low fire apart. So the latest on the jobless claims is $199,000. That one came in better than expected. Continuing claims, they're rising a bit, meaning the total number of people are receiving benefits, slightly worse than expected. And I did get some clap back. I think it was on LinkedIn last week where I talked about the jobless claims and people were remarking, and they're not wrong, saying, you know, first of all, where you do get 26 weeks, it typically tends to be relatively paltry in the sense of the amount of compensation that is provided. I think you can max out here in the state of Maryland at $400 a week where I live. And the other part is, you know,

very often it takes longer the 26 weeks to take the job and then people if they give up and that's what we've been seeing in some cases is people have said okay I'll just retire I'll give up so that isn't you know the continuing claims don't tell us everything we want to know about the job market but that's why we have so many other things to look at as well When you fall into that category of, okay, I'm going to quit looking for a job. I'm going to give up on this. I'm just not going to work right now. Is that all in retirement age groups? I mean, or is that happening in younger age groups, not the retirement part, but I'm not going to look for a job part. It's definitely happening with some younger people as well. One of the components that we refer to in the cohorts is prime age workers, and that's basically going from mid-30s to mid-50s. So we've seen some people exiting there as well, and one can only imagine what they're doing. Well, that's what I was going to say. They move back in with their parents. Is that what happens in a situation like that? Well, I do think there's some of that going on. There's no doubt about that. But the other part is it could be that they go into business for themselves and therefore they're not counted as sort of being in the workforce because they're not applying for unemployment and they're not asked by the survey takers what they're doing. So they don't capture that. One thing I wrote in the Hamrick brief probably about two months ago is talking about a... sub-component of all that, and that is this massive creator economy that now I'm a part of where you have people doing stuff off of YouTube or doing podcasts and going into business for themselves, and so they're not part of the traditional workforce. Yeah, no, it almost seems like that some mechanism should come along to, excuse me, to try and capture those numbers so that, you know, it can be even that much more accurate because you're right. I mean, this creator sector now is becoming huge and it probably needs to be tracked at some point. What's on the calendar this week, Mark? Anything that you're looking forward to seeing? Well, we get this inflation data this week. Wednesday is the consumer price index, so that'll be key. Along the way, we get existing home sales, and that's not going to probably be very pretty because we've seen mortgage rates go up to the highest level in a year of late, closer to 7% for the 30-year fixed than it would be to 6, and also retail sales. So retail sales. are expected to be somewhat paltry, but that would be coming off of a stronger showing in the previous month. So we'll see how that shapes up. And, of course, it is pretty much the time when folks start shopping for back to school. I know your ad sales department there.

likes that as well. Yeah, we'll see, we'll see if they come to work today. I'm sorry. I shouldn't have talk bad about them. They're on summer hours. They have baker's hours over on that side of the building. But nonetheless, but Mark, we want folks to follow Mark at the Hamrick Brief. Once again, if you want to sign up to get the newsletter into your email, every time that it comes out, it's the hamrickbrief.substack.com is where you can go to sign up. You can also get the Premier Service, which will pay a little bit for that. And that obviously helps support Mark and his work that he's doing throughout the week on the different economic reports and things that come in, deciphering those. But Mark, always appreciate you coming on the show. I hope you have a good week. And we'll catch up again next Monday. Always a great pleasure, Toby. Thanks so much. And you take care. What does one trip to Israel do? One trip changes people's faith, their identity, their perspective. One trip changes the response when people chant from the river to the sea. One trip changes how people see right and wrong. One trip changes the idea of home. One trip changes everything. And one donation is all it takes.