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Eric Basmajian Profile picture
@EPBResearch
Jul 31, 2019 • 4 tweets • 2 min read • Read on X
While the headline ADP number "beat", hardly anyone will point out that the growth rate decelerated to a 21 month low. #RateofChange Image
The growth rate in "goods" employment, according to ADP, has decelerated to a 27 month low. Image
The growth rate in "manufacturing" employment, according to ADP, has decelerated to a 24 month low. Image
The growth rate in "construction" employment, according to ADP, has decelerated to a 79 month low. Image

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More from @EPBResearch

Eric Basmajian Profile picture
Jan 25
The Fed hiked rates faster than ever, but the economy hasn't responded like normal.

Is something broken? Not quite.

The answer (like usual) lies in housing.

Here’s what's going on and why it matters...

1/
Leading indicators, like building permits, show where growth and employment are headed.

They're not magic—they’re mechanical.

You need a permit to start construction.

2/
Historically, when permits dropped, construction and employment quickly followed.

But after the pandemic, the lag between a decline in permits and its impact on growth/employment exploded.

Why?

3/
Read 11 tweets
Eric Basmajian Profile picture
Jan 22
Conceptually, the quits rate is a leading indicator of labor market conditions.

1/ Image
A high quits rate means employees are confident quitting because they believe finding a new, better-paying job will be easy.

2/
A low quits rate signals caution. Employees hesitate to leave their jobs, sensing the labor market is cooling, hiring is slower, and opportunities for better pay are limited.

The quits rate essentially reflects what workers think about the hiring environment.

3/
Read 7 tweets
Eric Basmajian Profile picture
Jan 14
Stock prices used to be a good leading indicator.

Not anymore.

A Thread.
Prior to the 1990s, stock prices would decline before drops in earnings.

At times, stock prices would anticipate a decline in earnings that would not materialize.

But prices would generally lead earnings which slightly led the economy. Image
In the two modern recessions of 2001 and 2008, stock prices did not lead declines in earnings.

In fact, there was a slight lag. Image
Read 11 tweets
Eric Basmajian Profile picture
Dec 16, 2024
New housing inventory is at the highest level since 2008.

But that is only one piece of the puzzle.

Here's the full story. Image
The single-family housing market is made up of new construction homes and existing homes.

Most people interact with the existing market because it is much larger and because not all regions of the country have a lot of construction.

2/11
Inventory in the new construction market is at the highest level since 2008.

Inventory in the existing market is still below pre-pandemic levels.

(For new inventory, remember this can still be "under construction.")

3/11 Image
Read 12 tweets
Eric Basmajian Profile picture
Dec 10, 2024
I analyzed the top 10 sectors of the labor market.

These are the two most important.

Thread.

1/
The labor market is the most important component of the economy since job losses are a required part of the recessionary process.

2/
Not all sectors of the labor market are equally important, and the biggest sectors are not necessarily the key swing factors.

For example, it’s common to suggest that manufacturing is no longer important because it has become a small component of the labor market.

3/
Read 23 tweets
Eric Basmajian Profile picture
Oct 9, 2024
The residential construction sector still has some backlogs, but we estimate that things will return to a normal state in 2-3 months.

1/6 Image
Residential construction is essential to the US economy, significantly influencing GDP, inflation, employment, and Fed policy.

Major backlogs accumulated in 2021 & 2022 allowed residential employment to avoid contraction despite a major shift in monetary policy.

2/6
In 2022, only 8% of new home inventory was completed. This represented the largest distortion ever seen in the new home sector.

Today, 22% of new home inventory is completed, which compares to a historically normal level of ~24%.

3/6 Image
Read 6 tweets

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