Moneybeat – Desperately seeking normalcy


MARY REICHARD, HOST: Coming up next on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: New government report on jobs containing better-than-expected news. American employers added 379,000 net new jobs in February—the unemployment rate ticking down to 6.2 percent—that’s down from a record high 14.8 a little less than a year ago.

The February pickup represents the second-straight month of jobs growth and more than 90 percent of that increase comes in the job sector hardest hit by Covid lockdown orders—that’s leisure and hospitality.

Financial analyst and advisor David Bahnsen joins me now. And David, it’s interesting, this jobs report comes at a time when we hear about states lifting Covid restrictions. Blue states, too, not just red states, like Texas. Though Texas lifting its mask mandate earned the ire of the president last week, calling it neanderthal thinking.

DAVID BAHNSEN, GUEST: Yeah, I think that there is a disconnect on where the society is headed and desperately wants to be, which is at that place of normalcy, at a place of pre-COVID normalization. And I would even add, by the way, more so than the comments that the White House made a day or two before the jobs report was the stimulus bill that the Senate passed a few hours after the jobs report. I can’t think of another time that we would have outperformed our jobs report by a couple hundred thousand jobs and expectations and then later on that day signed a bill for $1.9 trillion of support. 

I think that this economy is headed in the right direction. I think that the jobs numbers are going faster than people expected, including myself. And now to go do this direct payment stuff and all the other things that are part of the stimulus bill I think is really quite bizarre to be honest with you.

EICHER: So you weren’t impressed much with the efforts of moderate Democrats in the Senate dialing back some of the features in the House version of the Covid bill?

BAHNSEN: Yeah, I think there’s something really important that happened here and I hope listeners might have caught this. I am a little disappointed that it does appear that the sort of moderating forces in the Democratic Senate, which there are some and I’m grateful that they’re there and they do represent a kind of check and balance on a lot of what the progressive left would like to do. The progressive left does not have the political power to do some of the things they want to. We saw the minimum wage thing fail. So I’m grateful for the Joe Manchins in West Virginia and Testers and Sinemas and some of these other senators. 

But I’ve got to say on this stimulus thing, it does appear that they were really content to use their leverage to get something very token, very cosmetic. They changed the weekly unemployment from $400 a week to $300 a week, but then extended it an additional four or five weeks longer. That’s hardly needle moving type stuff. If they felt $1.9 trillion was way too large for the moment, I think they had the political leverage to get it down to $1 trillion or $1.3 trillion. But they basically just kind of re- tweaked an I and T and called it a day. And I think that’s, unfortunately, possibly an omen of things to come.

EICHER: Hey, before I let you go, any stories you’re watching that may have slipped under the radar here? About two minutes and we’ve got to run.

BAHNSEN: Well, there were two stories this week that dominated the news cycle in the financial news cycle. One is the ISM services. So, you’re looking at manufacturing, you’re looking at industrial production. But then you have the ISM manufacturing and non-manufacturing and that services index had substantially better growth than had been expected and so that’s a positive. All of these different economic indicators that are not the consumer confidence and jobs numbers that most people focus on, the ones that I really believe are forward-looking and needle moving. All of those numbers are thus far coming in better than expected. 

So that does two things. It both encourages me about my thesis of economic recovery and it mystifies me that there was no political will— and I’m saying leftist folks that are in power that know that this is true. There’s no disagreement. This is not controversial. This is not social justice. They know that the $1.9 trillion is way, way, way too big for the moment. And yet the fact that it didn’t do anything to kind of check them back is really quite telling.

I think the other piece is a continuation of the story about bond yields. They moved higher again this week and allegedly we had all this hand wringing over what the Fed would do about the possibility of yields moving higher. And I thought Chairman Powell stuck to his guns on Thursday and basically just said we’re watching it. We’re not worried about runaway inflation. Somewhere, somehow someone has got to understand that growth is not inflationary. That economic growth in and of itself is not inflationary. And the idea that people getting jobs back is a bad thing is offensive. It’s offensive morally. That we have to worry about there being inflation because we see people in the troubled hospitality sector getting their jobs back. It’s just silly. And I think that the sooner we understand that, the better off we’re going to be.

EICHER: Alright. David Bahnsen, financial analyst and advisor. Always great to talk with you, David. Thanks so much. Have a great week.

BAHNSEN: Thanks so much, Nick.


(AP Photo/Frank Franklin II, File) American flags hang outside of the New York Stock Exchange, in this Tuesday, Feb. 16, 2021, file photo.

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