The NFIB released their July reading on small business sentiment this morning. In today’s Morning Lineup, we highlighted the strength in labor market indicators included in the report. Included in that was the percentage of survey respondents reporting either the cost or quality of labor as their most important problem.  As shown below, 9% and 26% reported as such respectively. On a combined basis, that is 35% of respondents reporting either of these issues as their biggest problem. That is the highest percentage since November 2019 when 36% reported as such. Government-related concerns came in as the biggest problem for the next largest share of businesses.  31% reported either taxes (19%) or government requirements and red tape (12%) as their biggest problems, up from 29% on a combined basis last month.  While higher month over month, that is still multiple percentage points below the recent high of 35% from May.  The other biggest issue that comes in behind labor and government is inflation.  11% of respondents reported that they worry about cost pressures which is actually down from 13% the prior month. While improved, that is still one of the highest readings to date outside of the string of record or near-record readings in 2008.  Click here to view Bespoke’s premium membership options.

Yesterday, the BLS released June data on job openings and labor turnover, also known as the JOLTS report. This alternative view of labor markets is released at a one month lag to the monthly employment situation report which includes the nonfarm payrolls number. In additional to openings, JOLTS also includes a look at quits and other separations from businesses which include retirements, firings, and other departures. Since the data begins in 2000, the average month has seen quits account for about 55% of total separations. Over the last three months, that number has surged to nearly 70% and is sitting at a record level. One thing we can say with great confidence about the current labor market: lots of workers are quitting for greener pastures.  Click here to view Bespoke’s premium membership options.

Chart sources: BLS, FRED, Bespoke Investment Group calculations

One of the widely talked about pandemic trends has been an increased interest in the stock market. Quantifying this, below we show data from Google Trends. These indices track search interest for various terms where readings of 100 are the peak in interest for a given time frame, a reading of 50 would be when interest was half of that peak, and so on and so forth. Google searches for “Stocks” surged to record highs during last year’s bear market and those highs were taken out earlier this year around the time of the meme stock mania in late January. The same could be said for searches for “Buy Stocks”.  Since then, that interest has unwound but current levels are still above most pre-pandemic levels.  (Red dots indicate search levels during the week of August 9th over the last five years.)

The same could be said for search interest for various brokerages.  Taking a look at the most popular, Robinhood, search interest spiked higher during the meme stock mania and GameStop (GME) short squeeze early this year before getting another boost in the spring around the time of the surge in AMC Entertainment (AMC). Interest has moderated since then, though, the past several weeks have seen a boost potentially as a result of the IPO of the company.

Inflation continues to be a macroeconomic subject that is closely watched, but for the time being, people are searching for it far less than earlier this spring.  In May, searches for “Inflation” reached the highest point on record, and while they are still elevated, the reading has come down a bit.  Searches for “Rising Prices” tell a similar story, though, it peaked earlier in the late winter.

With searches for inflation having surged in the past year, we thought it would be worth looking at search interest for some typical hedges like gold.  While these searches also surged to a record recently, it should be taken with a grain of salt, after all, it is an Olympics year. As shown in the second chart below, historically the month in which the Olympics fall usually sees searches for gold spike.

Turning to a more speculative area of the market, below we show searches for crypto-related products.  Bitcoin remains well above most other periods of the past five years but it has been declining and is back below the past year’s range. Additionally, the highs from earlier this year were far from ever hitting the same interest as the craze in late 2017/early 2018.  On the other hand, “Crypto”, “Coinbase”, and “NFT” search interest has come back down to earth after all reaching records earlier this year. These have also seen minor reversals recently with  “NFT” in particular seeing a decent-sized bounce.

While those digital collectibles have seen interest turn around slightly, searches for “Collectibles” more broadly or a more specific term like “Rookie Card” have been drifting lower.  Interestingly, searches for these collectibles certainly got a boost during the pandemic, but they actually began to trend higher just prior in late 2019. Click here to view Bespoke’s premium membership options.