4.1% Unemployment Is Hiding Something

Deep Value Investing 14.47K Followers Follow Summary A relatively stable unemployment rate of around 4% doesn't necessarily mean that the labor market is doing fine. Back in July, the unemployment rate declined from 4.2% to 4.1%. However, payrolls came down as well by -23k. I think the missing 264k people from the labor force explain the contradiction. On top of that, some analysts projected that America may need fewer than 10,000 new jobs a month to hold unemployment steady. To me, all this suggests that the unemployment rate is likely to remain stable in August (around 4.1%). Therefore, this doesn't help the odds that the Fed keeps the benchmark rate where it is in September. RomoloTavani/iStock via Getty Images There are quite a few things going on right now in the broader markets, from the bond rout in Japan to the ongoing conflict in Iran (which appears to be escalating again), and the odds of a hike at the next This article was written by Deep Value Investing 14.47K Followers Follow Thematic. Top down. I often find the theme before I find the stock. My philosophy is that themes are often born quiet and die loud. I try to catch them while they're still finding their voice. When the music plays, I mainly chase pockets that rhyme with growth, momentum, perception shifts, and sometimes even the most absurd narratives (mostly AI-related). When the music slows and the tape deteriorates, I don't wait around. I raise cash/rotate out, and watch for the next setup. A parabolic run may trigger a similar move. During a bull run, you won't find much common ground between the deep value crowd and me. I liked the core ideas of deep value investors, and I briefly followed that philosophy. However, it demands patience, and the AI supercycle broke whatever patience I had left. The market changed, and so did I. My style is not set in stone. I’m mostly long when the music is playing. When it stops/slows down, I may dabble with shorts via put options, although it’s not my forte. My style is highly speculative. I have a high risk tolerance that most rational investors would find alarming. I don’t have a favorite timeframe. That said, I trade mostly the mid-term and the short-term. I have a pathetic low six-digit portfolio, and I consider myself part of the mid to low end of the K-shaped economy. It sometimes drops to the five-digit range when life has other plans. I've been in the game since mid 2024, although my first dabbles with stocks (i.e., burning $100 trading accounts in a matter of days) go back to the early/mid 2010s. I have a B.Sc. in aeronautical engineering and experience as a consultant in the aerospace sector. The latter statement is not relevant to my investment style, but I thought to add it for self-indulgent purposes. I live on the wrong side of the Atlantic. The opening bell is my lunch bell. I like astrology, so I’m a follower of technical analysis (mainly trends and support/resistance/psychological levels). I also look at the fundamentals of individual names, although the theme and the macro often prevail in my decision-making. I dislike empty suits, high-level BS, deep-level BS (especially), unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority. Analyst’s Disclosure: I/we have a beneficial long position in the shares of IWM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I may initiate a short position in the securities discussed in this article over the next 72 hours. I am not a registered investment adviser, broker, dealer, or tax professional. This article, including any comments or replies I post, reflects my personal opinions only and is provided for informational and educational purposes. Nothing I write is investment, legal, tax, or financial advice, or a personalized recommendation to buy, sell, hold, or short any security. My views may change without notice. Nothing I write is tailored to any reader’s objectives, financial situation, risk tolerance, or portfolio. Investing involves risk, including possible loss of principal. Readers should conduct their own research and consult a qualified professional before making investment decisions. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.