Helene, Factory Activity, Jobs, China and Deflation, #39 is 100, and Hospice
First Things First - Helene
I was wrong. The news is still covering the disaster that is Helene. Take a plunge down the YouTube and search for Helene damage; you’ll be stunned.
You will then understand why you need to have some sort of plan for an earthquake (Editor’s Note: Most of my readers are in Southern California).
From close contacts in Georgia, I heard that last Monday, World Central Kitchen & Samaritan's Purse were already present in the affected areas. Smaller outfits, like Cajun Navy Relief, are also working in the area.
People are still running their generators for the 8th day.
Pick your favorite charity and help them out. You don’t know when you’ll need the favor returned.
Second Things Second: The Numbers
Yes, the focus is always on PCE and CPI (5 points if you know what those are without Google).
So, let’s focus on a couple of other numbers; perhaps you can make them talking points with your customers.
Factory Activity
Well, we know there’s not much activity at Boeing, but how about other places?
Yes and No. The number came in at 47.2. If it’s below 50, it’s contracting.
New orders continued to contract while production increased ever so slightly but was still below 50.
Job openings were up. That number came in at 8,000,000, up from 7,700,000.
Part of the equation is that workers are quitting at the slowest rate in four years.
That indicates that employees don’t think the grass is much greener on the other side of the employment fence.
The ADP numbers are in. ADP is not driven by surveys or government data. They use their own numbers as the largest payroll company in the United States.
New hires came in higher than expected at 143,000, up from 103,000 last month.
However, it’s the sixth consecutive month that new jobs have been less than 200,000.
It’s a softer report overall but positive.
On the heels of that report, the non-farm payroll is in. Expectations were 150,000 new jobs.
It came in at 254,000, and unemployment dropped from 4.2% to 4.1%. That’s a pretty good number.
Education and Healthcare, along with Leisure and Hospitality, were the big winners.
Manufacturing and Transportation/Warehousing lost jobs.
Folks are thinking of a 0.25% drop in rates in November.
Let’s go Overseas to China and its Stimulus Plan
Interesting. A communist country that wants to stimulate the economy. If that isn’t an oxymoron, I don’t know what is.
I will tell you from personal experience that the average Chinese citizen, whether from Hong Kong or mainland China, is a pure capitalist. But I digress…
If you don’t know, China’s economy is in a bit of a rut; it’s a deflation thing.
That’s right. You know how our prices are going up? Well, China’s prices are going down.
So, the CCP – Chinese Communist Party – is trying to do things to stimulate the economy and drive prices up.
China dropped its primary lending rate from 2.3% to 2%. As you have learned in this Report, if interest costs go down, people borrow more. In theory.
They have allowed people to refinance their mortgages, and they dropped the residential mortgage rate by 0.5%. Foreign concept, isn’t it? Evidently, refinancing your loan for a lower rate and smaller payment was not a thing until last week. Really.
There will be some unintended consequences of that, but desperate times…
They reduced the reserve requirements for banks by 0.5%. That frees up a lot of capital to lend out and stimulate the economy. In theory.
It’s going to be a little bit of a bumpy ride. You can control a lot of things, and the Central Committee of the CCP does a pretty good job of controlling a lot of things. Still, you can’t control the actions of 1,400,000,000 people or the unintended consequences of multiple rounds of fiscal stimulus.
The goal of the CCP is to grow the economy by 5%, but they are finding they can’t do that in a deflationary economy. This will be interesting to watch.
If you are an importer from China, you should probably renegotiate the prices you are paying for the stuff they are making. You might get a discount.
39 Turns 100
This past week, the 39th president of the United States turned 100.
That would be Jimmy Carter.
I was in my junior year at Taipei American School in Taiwan when, in 1979, the United States recognized mainland China, the People's Republic of China (PROC), as the one and only China, effectively throwing Taiwan, the Republic of China (ROC) under the bus.
Many people felt that it had to be done sooner or later, but when you are actually there, later is always preferred.
Regardless, when someone turns 100, particularly a US President, it deserves recognition.
He graduated from the Naval Academy with an engineering degree and was in the nuclear submarine program when he left active duty.
He was a driver for deregulation. During his administration, he deregulated the airlines, interstate trucking, and railroad transportation.
And after his presidency:
Does Habitat for Humanity ring a bell? It should. President Carter’s involvement made it a household name.
Another credit: he has helped dispel the misconceptions surrounding hospice.
He entered hospice – end-of-life care – in February of 2023.
Hospice is an option when it is believed that you have less than six months to live.
Interestingly, for many folks, hospice not only improves the quality of life but extends it as well. It’s because you are usually taken off all medication other than meds that provide comfort.
For President Carter, he has been in home hospice for 18 months.
If you are at the end of your life, why be in a hospital? Go home and be where you are most comfortable. That’s the intent of hospice care.
It is almost impossible to plan for every contingency, but it is possible to prepare. Whether it is a natural disaster, economic repercussions, or end-of-life care, you can plan and prepare for the unexpected. As a business, there should be a binder right behind your desk with your contingency plan. As an individual, you and your family should have a plan for how you react to natural disasters. For a family, that would be having a will and healthcare directive in place so your kids don’t have to guess what you would’ve done.
And remember, for what insurance doesn’t cover, prayer can fill in the gaps. Believe me, when you are in the middle of a Category 4 or a 7.2 Richter, you’ll find religion quickly.
