Whoa, we’re halfway there
Whoa oh, livin’ on a prayer
Take my hand, we’ll make it, I swear
Whoa oh, livin’ on a prayer
Bon Jovi’s signature song and second number one 1986 smash, “Livin’ On A Prayer,” is a musical descendant of the 1979 Kiss hit “I Was Made For Lovin’ You.” Now a Kiss anthem, it was written by Desmond Child and Kiss frontman Paul Stanley. In a Songfactsinterview, Desmond recalled: “Paul Stanley taught me how to write stadium anthems the Kiss way, in which the protagonist is always the winner. There’s always victory. And the music is also lifting constantly upwards. I used those kinds of ideas or feelings in my collaborations with Jon Bon Jovi and Richie Sambora for the band Bon Jovi. The most perfect example of that is ‘Livin’ On A Prayer.’” Bon Jovi was an opening act for Kiss in 1984 and saw firsthand how a big stadium anthem could change the fortunes of a band. Forty years on, Bon Jovi opens the Forever Tour with nine shows at Madison Square Garden from July 7th to July 26th before heading to the U.K. and Ireland for shows in August and September.
Whoa, we’re halfway there. Halfway through 2026. This holiday-shortened week could end with fireworks, with Nonfarm Payrolls Thursday, or as Warsh would call it “Wait Until the Third Revision Nonfarm Payrolls (NFP) Nonsense.” Going into tomorrow’s data, the 115,000-consensus forecast for June nonfarm payrolls (green bars) is lighter than the 142,000-whisper number. While neither figure is as stout as May’s initially reported 172,000-gain, they are well above the Fed’s 20,000-breakeven employment growth projection that spans 2026’s second quarter, a figure deeply disputed by recent college graduates, but what do they know…
It’s clear from this tilt that traders expect to see three digits of green come 8:30 tomorrow morning. Four straight first-print payrolls north of the 100,000-mark via the Bureau of Labor Statistics (BLS) have not been logged since June 2025. Because of the Fed’s breakeven ‘line in the sand,’ it would take a significant underperformance relative to market expectations to change the growing tightening refrain. To that end, Bloomberg reported yesterday that “traders in the fed funds market are ramping up bets that the Federal Reserve could start raising interest rates as soon as July.” As of this writing, the July FOMC meeting is priced for a 32% probability of a quarter-point hike.
Yesterday’s June Conference Board Consumer Confidence report, whose June 1-23 sample period overlapped with the BLS’ survey, gave American households’ diametrically opposed views on the labor environment: “Perceptions of the current labor market softened measurably as the percentage of consumers saying jobs were ‘hard to get’ rose to 22.5%, the highest level since January 2021 (22.8%). Moreover, consumers anticipate little change in the labor market six months from now.”
The current labor differential – Jobs Plentiful less Jobs Hard to Get – fell to 2.4 points, the lowest level since February 2021. Other Conference Board labor metrics shed light on consumers’ downbeat assessments which disagree with the Bureau of Labor Statistics’ published figures. The -0.7-point spread between Jobs Plentiful (24.9%) and Fewer Jobs expectations (25.6%) was the fourth inversion thus far in 2026; it also marked the first back-to-back negative readings in five years. Expectations for More Jobs (15.2%) vis-à-vis Jobs Hard to Get have been even dourer – they’ve been mired in the red for 13 straight months (purple line), a streak not seen since 2017.
The May Job Openings and Labor Turnover Survey (JOLTS) chimed in with a preview of April’s and May’s NFP revisions. The Hires-Separations (H-S) spread proxies NFP. April’s new take was only marginally different, at -2,000 for headline and -4,000 for Private, than previously reported: H-S spread at 177,000 versus NFP’s 179,000; Private H-S spread at 173,000 compared to Private NFP’s 177,000. May’s JOLTS figures, however, flagged sizable downward revisions of -103,000 for the headline number and -86,000 for Private NFP. The former should be cut to 69,000 from 172,000, and the latter to 34,000 (red line) from 120,000 (yellow bars).
If consumers have the true June jobless pulse, an upside surprise for the unemployment rate is on the way. Since 1967, Jobs Hard to Get carries a .89 correlation to the unemployment rate. The 2.7-point advance from May’s 19.8% figure fell in the 94th percentile of monthly changes, or a 1.40 z-score. It implies that June’s 4.3% unchanged consensus unemployment rate estimate is overly sanguine and could test November 2025’s 4.536% cycle high. This ups our conviction on jobless claims’ fourth wave, which began in late April, filtering through to the official unemployment statistics
Outside Employment Report implications, the Conference Board survey lauded an improvement in income expectations: “20.8% of consumers expected their incomes to increase, up from 19.2% in May; 13.2% expected their incomes to decline, down from 14.5%.” June’s 7.6-point gap (aqua line) was the best showing in 19 months. We caution taking the improvement at face value. A ‘Peace Rally’ likely played the starring role, as noted: “References to prices and oil and gas eased in frequency but remain elevated. Mentions of war, geopolitics, and conflict eased, reflecting some easing of consumer concerns about the inflationary impacts of the war in the Middle East.” In turn, consumers’ average and median 12-month inflation expectations downshifted.
If the income expectations’ bounce is driven by fundamentals, then why did vacation plans fall further? Conference Board talked down the move: “Overall travel intentions within six months receded in June.” The drop to 39.1% (dark blue line) took out the February 2025 low of 39.9%, leaving this guide to discretionary service spending at the weakest since April 2021 (dashed dark blue line). This concurs with a survey fielded this spring by Deloitte from April 2-9, 2026, which found 45% of respondents had made planned summer vacations, a six-year low. The reason? “Sticker shock.”
As for the Conference Board, the lower low left vacation intentions at recessionary levels. Historical readings under the 40%-line have one precedent — June 2008 to October 2010, the Great Recession and its ‘hangover’ after the downturn officially ended in June 2009. Bearish vacation guidance keeps caution flags raised on the Consumer Discretionary sector. It also counters the Peace Rally that, dare we say, is Livin’ on a Prayer?