We’ve written previously about the new TLRwire service introduced by Philippa Dunne and Doug Henwood. Readers who want to view a sample or subscribe can go here: https://www.tlranalytics.com/subscriptions/tlr-wire. I’m a paying subscriber myself, and I’m recommending TLRwire because I think it is a high-value-added service. Last time I recommended a service, a few readers asked me if we were getting compensated for the recommendation. Cumberland doesn’t get paid anything for suggesting that you try TLRwire.
In the latest issue, Philippa and Doug examine the Job Openings and Labor Turnover Survey (JOLTS) and also the quit rate. These are very important series that aid in forecasting labor-market conditions as well as the intensification of labor-cost pressures and subsequent inflation risk. As TLRwire says, the quit rate is “a measure of worker confidence.”
It is the final paragraph in the note that caught my eye. It led me to contemplate the “wealth effects” from what I perceive as asset-inflation bubbles.
“Over the year there was an outsized jump in the quit rate for ‘other services,’ from 2.3% to 3.2%. Outside leisure & hospitality work, that’s the highest rate, followed by profession/business services (3.0%), and retail trade (2.9%), and a big improvement over last year when it ranked eighth. The ‘other services’ grab-bag includes many of the jobs MIT’s David Autor has identified as ‘wealth work,’ dog walkers, manicurists, private clubs, and laundry and private household workers. (Also included are temporary parking and dating services, and ghastly ‘death care’ services. Autor includes sommeliers in his category, but in their article, ‘You’re a what?’ the BLS makes clear they don’t track the tiny ‘sommelier sector.’) Joking aside, the jump in the ‘other services’ quit rate underscores the strength of the ‘wealth work’ sector: Since 2010 the number of manicurists has doubled and the number of private household cooks has grown at twice the pace of total employment.”
In the asset management business at Cumberland we are always looking for little early signs and obscure but significant series to discern changes in trends and alteration of risk profiles. That is the stuff that is required to stay in front of market shifts. TLRwire’s paragraph on wealth work is a little gem. When central bankers are injecting liquidity at unprecedented magnitude and speed and asset-inflation bubbles are critical to estimate, the tracking of wealth effects becomes an important task. We thank TLRwire for this snippet.
I must now close this brief missive so I can get to my manicure appointment. For those who know me well, I don’t engage a sommelier but do consult some good friends who are oenophiles, as I am.
Please enjoy TLRwire if you’ve got $27 for a month-long trial. I’m glad I did.
David R. Kotok
Chairman and Chief Investment Officer
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