Changes Happening at the BLS

BLS Leadership Shake-Up Raises Concerns 

After this commentary was published last week, breaking news came out announcing that the President had fired the head of the Bureau of Labor Statistics (BLS).  

The BLS is considered the international gold standard for Domestic and some International economic reporting. 

Important reports that the BLS provides include:  

• Consumer Price Index (CPI, an important inflation gauge) 

• Producer Price Index (PPI, a wholesale inflation gauge) 

• Job Opening and Labor Turnover Survey (JOLTS, gives the trend in job availability) 

• Unemployment Rate 

• Jobs Report 

• Employment Cost Index 

• US Import and Export Prices 

Regular readers will recognize most of these names as extremely important to interest rates and housing. The reports that BLS provides influence policy decisions around the globe to include our Federal Reserve.  

Data Revisions Undermine Market Confidence 

This commentary cannot opine on the merits behind the dismissal of the BLS head. We can, however, show that there has been a clear pattern of major corrections needing to be made to the reported data for the past several years, even prior to the current head’s employment.  

These consistently large revisions have caused doubt to spread through market participants. Friday’s terrible Jobs number and even worse revisions lower is a prime example.  

Even though the problems may have been systemic and not the fault of the current head, they didn’t correct them during their tenure. Hopefully, the new head will be able to help the markets regain their confidence in the reporting. 

Poor Jobs Report Boosts Odds for Rate Cuts 

The poor Jobs report is causing rates to improve.  

The market has a 90% likelihood of a Fed rate cut in September.  

There is also a high probability of continued cuts well into next year. This may be the start of the long-awaited downward rate trend. 

Trigger Lead Ban Passes Congress 

Congress passed the Homebuyers Privacy Protection Act and it is waiting the President’s expected signature. This is the “trigger lead” bill that will stop the annoying process of dozens of unwanted calls, texts, and emails from lenders when a borrower applies for a mortgage and has their credit pulled.  

Currently, the credit bureaus sell this notification as a “trigger lead” to other mortgage companies who, like vultures, descend on the unsuspecting applicant.  

Under the new bill, only companies that have a current application with explicit consent, service a current mortgage, or have current deposits can reach out.   

Loan officers, realtors, and consumers alike will love this news. 

Jobless Claims Continue to Rise 

This week’s Jobless Claims numbers came in badly again. 

• First-Time Beneficiaries increased 7,000 to 226,000.  

• Continuing Claims hit the highest level since 2021, rising 38,000 to 1.974M.  

These continuing claims have been over 1.9M for 11 straight reports and are close to reaching the 2M mark. 

Keep in mind that people also leave this report when their benefits run out and are no longer counted.  

Looking Ahead 

Next week’s economic calendar includes a few key reports that we will keep an eye on: 

Tuesday, August 12:  

• Consumer Price Index (CPI) 

Wednesday, August 13:  

• Mortgage Applications 

Thursday, August 14:  

• Producer Price Index (PPI) 

• Jobless Claims 

Friday, August 15:  

• Retail Sales 

• Industrial Production and Capacity Utilization