Vaccination: So far Europe is doing exceptionally well, but can it keep it up?

Outlook: Today’s US calendar includes ISM services, the final Markit PMI, and the ADP estimate of private sector employment. PMI’s supposedly run the table but ADP is the joker in the pack.

One forecast of the ADP forecast is 683,000, less than June (692.000), a blot on the copybook, since everyone expects the same or more than last month and hopes for an early taper depend on it. PMI services is almost certain to outperform, given the end of lockdowns in so many places, but it lacks the punch to overcome a lousy jobs number on Friday.

Notice that the press is refusing to look at either the weirdly falling 10-year yields or to talk about inflation. Instead we have earnings, US regulation of crypto, the governor of New York caught being a sexist jerk, which is now illegal, and the first really big company, Tyson Foods, mandating masks for factory workers. Unions are pushing back on the grounds of lack of formal approval, but Tyson is offering $200 to each new vaccinated worker.

Most companies that require vaccinations before returning to work are talking about office workers, including Microsoft. Now it’s the front-line blue collars. The WSJ reports “A task force of union and company officials decided to reinstate a mask mandate for workers at all GM, Ford and Stellantis factories, offices and warehouses, regardless of vaccination status. Among municipalities, New York City will require proof of vaccination for indoor activities starting Aug. 16.”

The vaccination/anti-vaccination drama in the US is far from over. As a social issue, it’s interesting, not least because it reveals the vast ignorance and pig-headedness of the public, which does seem higher and more entrenched than elsewhere. This is a big deal if we really do need to get to 90% testing positive for antibodies, like the UK. It’s an authentic threat to the recovery and therefore to the job growth we need in July-Sept to push the Fed off its chair. So now the contest is not among PMI’s and other growth metrics, but among countries for their vaccination rates. “It’s the pandemic, stupid.” So far Europe is doing exceptionally well, but can it keep it up?

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