Henry Thornton
writes:


Employment
growth shocked on the upside today with 56,000 new jobs, the rate of
unemployment fell from 5.1% to 4.9% and bond yields spiked. Minor problem of
interpretations is that 57,000 of the alleged new jobs were supposed to be in
NSW. Could a pile of old forms have been found behind a filing cabinet one is
forced to ask, as in a previous statistical
disaster?

The TD Securities measure of
inflation is 3.2 % in the year to May, more signs of inflationary pressure.
Together with the jobs data, this will be making the gnomes of Martin Place
squirm a bit – the terrible question they will be asking is was their tightening
again too little, too late?

Meanwhile, “Oil tumbled more
than 2% on Wednesday [and fell again overnight] as growing US
fuel stockpiles eased worries over supplies leading into the summer driving
season,” reports TheNew York
Times. “However, the
market was set on edge after Iran’s oil minister said Tehran could halt crude
exports if its standoff with the West over its nuclear ambitions escalated.”

Alan Greenspan
weighed in with this pearler: “The United States, especially, has been
able to absorb the huge implicit tax of rising oil prices so far,” Greenspan
told the Senate Foreign Relations Committee. “However, recent data indicate we
may finally be experiencing some impact.”

As Henry
wrote last weekend: “… it is Henry’s view that the brotherhood of central bankers sometime in the
recent past decided oil at roughly current levels was a threat to global
inflation and ultimately to the continuation of global
prosperity.”

The grizzled
veteran of the interest rate wars has now confirmed this thought, adding to Ben
Bernanke’s hawkish views liberally reported Tuesday and Wednesday. The dreaded
“stagflation” word has even been bandied about, though Australia’s
cheerier GDP data is an important piece of contrary
data.

Sir Wellington
Boot has provided an excellent rant in the challenge of radical Islam and a prominent
legal mind has taken the trouble to correct Sir Wellington in one or two particulars.

Read more at
Henry Thornton.