Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)The household survey said a net 168k jobs were created which exceeded the 120k person increase in the labor force and why the unemployment rate ticked down by one tenth to 4.2% as the consensus estimated. Of the 168k, 369k came from those aged 55 and over, offset by a fall of 383k for those aged under 25. Hours worked held at 34.3 as forecasted, up from 34.2 last month (which could have been influenced by Hurricane Beryl). The participation rate was unchanged at 62.7% and still is below where it was in February 2020 at 63.3% in part due to retiring boomers. The important 25-54 yr old working cohort saw a participation rate of 83.9% vs 84% in July and which was the highest since March 2001. Average hourly earnings grew by .4%, one tenth above the estimate and the y/o/y gain was 3.8%, still running well above the pre Covid trend of about 2.5% but certainly moderating. Combining this with hours worked and weekly earnings rose by .7% m/o/m after a one tenth drop in July and they are up 3.5% y/o/y.

2)Initial jobless claims totaled 227k, 3k under the estimate and down from 232k last week. The 4 week average was 230k vs 232k last week as a 234k print dropped out. Continuing claims, delayed by a week and thus not impacted by Labor Day, fell to 1.838mm from 1.86mm in the week before.

3)The Shanghai to Rotterdam World Container Index fell by $985 w/o/w to $6,219. It’s down for a 7th straight week after the May/June spike where it peaked at $8,267. It still though is up from about $1,700 to begin the year and the $2,000 it stood pre Covid. It got to almost $15,000 in the 2021 supply chain panic. The Shanghai to LA route fell to $6,030, down by $218 w/o/w and off its peak of $7,512, though triple where it began the year.

4)From Casey’s General Store: "With respect to the consumer, just as a reminder, about three-quarters of our guests make over $50,000 a year in income. And so we consider those to not be low income, so about a quarter of our guest base is in lower income. For that three-quarters of the guest base, we're not seeing really any change in behavior, in purchasing behavior, they're continuing to come to the store with the same level of frequency and essentially purchasing as they have typically. The lower income consumers are modestly changing their purchasing habits. I wouldn't say that they're coming in less frequently than they had before, but they're opting to not buy as many units or items in their basket as they had previously. So there's a little bit of pressure there. But overall, I'd say our guest base is hanging in there pretty good."

5)From Bowlero: Benefiting from a higher income customer, "While we are hearing concerns in the market and weakness in the consumer, we're not seeing signs of that, and at this point, are guiding to total growth of mid-single digits to 10% in fiscal 2025."