Independent Strategy
Independent Strategy: Nick Kennedy

Nick Kennedy, Chief Economist

NICK KENNEDY, Chief Economist, joined Independent Strategy in December 2012. He bears primary responsibility for all aspects of Independent Strategy’s investment research process, with a focus on macroeconomics and financial market strategy. He holds an honours degree in Politics and Modern History from Manchester University and holds the MSTA designation from the Society of Technical Analysts.

Posts by Nick Kennedy

The recovery of the US labour market continues.  ADP reported 2.369mn jobs were added in June.  This was accompanied by a sharp upward revision to May’s report (initially reported as a loss of -2.760mn job and now revised to a gain of +3.065mn.  That might bring it closer to the May non-farm payrolls report (+2.509mn) but is nonetheless a rather astounding revision, which perhaps encapsulates the problem of accurately measuring the Covid shock.

The disruption from the Coronavirus continues to impact the data with the employment numbers for May showing a significant deviation from expectations and the near 2mn loss reported in the May ADP report.  Indeed, based on the preliminary numbers the economy added 2.51mn jobs over the month, which compares to the 20.69mn jobs lost in April.  Methodological problems are again in evidence ...

China

POST » 12th May, 2020 » China April Inflation

While some of the Chinese activity indicators might have perked up, there is no hiding from the disinflationary pressure stalking China’s economy.  April CPI dropped back to 3.3% yoy (4.3% in March) while PPI sunk to -3.1% from -1.5% in the previous month.  And the problem would be even worse were it not for persistent food price pressures as the impact of the earlier swine flue epidemic continues to pressure meat prices.  Indeed, CPI ex-food is now running at just 0.6%.

US

POST » 29th April, 2020 » US Prelim Q1 GDP

While the decline in first quarter GDP (-4.8% q/q ann.) was not unexpected, the outturn still doesn’t represent the full scale of the economic contraction.  The collection periods of the sample data are focused in the early part of the survey period and the assumptions the models make for the balance of the period rely heavily on these inputs.

UK Boris seems to be responding quite well to treatment, which is encouraging.  The media debate that his temporary removal created a power vacuum and compromised decision making just misunderstands how Cabinet government works and was just a complete non-story chased by journalists fatigued by the Covid echo-chamber. Real question is how do we exit the current lockdown situation?  Cabinet is discussing this today and it’s expected we’ll see the initial three week period extended through to the end of the month.

US

POST » 3rd April, 2020 » US March Non-Farm Payrolls

Bleak payrolls report.  While the median survey was always going to be a short in the dark, the -701k decline in jobs was significantly more troubling than the mkts -100k guess.  That’s the worst number since March 2009, a period of losses that saw five consecutive payrolls figures below the -700k mark starting from November 2008.  Looking at the past fortnights jobless claims figures the April number and revisions to this release will paint an even bleaker picture of the labour market.  In the household survey nearly 2.987mn jobs were recorded lost.

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