“Cease the day, dear. It’s special because a wonderful young lady was birthed 16 years ago. Blessed you’re in my life.”
“Huge doors are opening to you now that you’ve hit 16. Enter them with caution and wisdom, son. You deserve only the best, settle for nothing less.”
“Yesterday, December 7, 1941—a date which will live in infamy—the United States of America was suddenly and deliberately attacked by the naval and air forces of the Empire of Japan.”
Sixteen years ago, yesterday, “It’s a girl!” was followed by “It’s a what?” Forty seconds later, “It’s a boy!” was greeted silently with “Whew!” On December 7, 2007, my wise mom explained that God is a stickler for specificity. Though I’d always prayed for three sons, I’d never included or excluded the chance of having a daughter. With Baby A’s & B’s identical heartbeats for 35 weeks and 5 days, my working ass-umption was that I’d prayed for three and would get four…boys. That day, my mom also said to count my blessings. Provenance had deemed the twins be born on the date her father, my grandfather, was blasted awake by bombs dropping around him and lived to tell.
Blessed I was at Culver yesterday, in person to celebrate my Beutimous’ Sweet 16, and that of my prayers answered, my third son, a.k.a., Bruiser (he topped the scales at 5.1 pounds, while petite she was 4.15 pounds). When you read this, I will be in the air on the way to the warmth of Florida for some much-needed rest & relaxation. Before I unplug, there’s this major moment of November nonfarm payrolls to take in, absorb and contemplate.
It was with some relief that Bloomberg’s Anna Wong, in previewing today’s jobs data, stated that she, too, thinks the recession of 2023 will be dated as having started in October. Aside from myself, she’s the only one I know to have made such a public declaration based on every labor market metric save initial jobless claims and nonfarm payrolls, flagging a contracting job market.
Ok, OK, OK…There is one more exception. As we’ve written since March 2023, when nationwide continuing jobless claims flipped into the positive (that’s bad) year-over-year (YoY), the holdout state has been, and remains, Kentucky. Of all 51 states, including Washington D.C., it’s the only one that’s not succumbed to the indistinction of rising YoY continuing claims. Defying reason, we’ve asked ourselves, “Is there something in the water? Why the perfect track record in defiance of every other state?” The biggest employer there is Kentucky Fried Chicken, and we know that’s finger lickin’ good. But is that fried chicken so good to qualify an entire U.S. state as the holdout?
Digging a bit deeper, we found that while no single Kentucky employer has the same footprint as Colonel Sanders, many automakers have a sizable non-unionized presence in the business-friendly state. With that preamble, we highlight the national dueling phenomena of rising car inventories and falling used car prices. Both flag dwindling demand hitting an interest-rate sensitive sector, in keeping with the intent of the Federal Reserve’s current policy stance.
What’s to come, as the auto industry finally buckles, is rising joblessness in the last of the hold-out states (upper left chart). The Bluegrass State has reigned as the king of state job markets. From a low point (good) of -42.5% YoY on continuing jobless claims last March, Kentucky’s claims are now a mere -5.1% YoY.
What will clinch Kentucky’s succumbing to the fate of the rest of the nation is booze, particularly that which is amber in color, and not coincidentally, the hardest on your liver. In an announcement Wednesday, Brown-Forman, maker of Jack Daniels, announced that sales have been so abruptly arrested, they’ve wiped clean a 25-year growth streak hyper-charged by the pandemic.
Being in the holiday mindset, we’re compelled to warn about a red flag being raised in online shopping trends. Per the Logistics Managers’ Index, Warehouse Utilization has crumbled to its second-lowest, post-pandemic level (green bars). For corroboration, we aggregated Retail and Warehouse Job Cut announcements via Challenger, Gray & Christmas data, which have clearly gapped up after a reprieve (yellow line). While we can’t deny the Amazonification of workers in this sector, something doesn’t add up. Netting out Amazon to get a cleaner look into the holiday hiring economy, we see that, at 353,000 in the three months ended November 2023, job hiring announcements are the lowest on record.
Upon intaking the indefatigable message in the illustration, QI’s Dr. Gates put his foot down: “Stop calling the turn in the labor market a ‘normalization’ already! It’s time to take off the kid gloves. Challenger’s seasonal private hiring announcements are below normal for a second straight year, and critically, below the pre-pandemic average (orange bars). Co-starring in the role of unequivocal affirmation, the breadth of occupations declining in Indeed job postings (purple line) is materially widespread and in need of a taller scale. There are many ways to identify these crystal-clear inflections. ‘Normalization’ ain’t one of them.”
Could inexplicable nonfarm payroll strength show up today? Between the end of the UAW strike and the conjuring of government jobs, we’d expect nothing less. That won’t take away from reality. Despite Econ 101 teachings that the booze market is ‘recession-proof,’ U.S. consumers are imbibing so little, consumption is running 3.3% below trend (light blue line). That’s on par with that of nonfarm payrolls’ 3% post-pandemic deficiency (lilac line). Few would dare acknowledge that many of these jobs will be lost, and possibly never return, kind of like those Sweet 16 moments, whose memories fade as quickly as they’re made.