Employment Situation Summary
Release Date: Usually the first Friday of each month
Release Site: www.bls.gov
Market Relevance: VERY HIGH
Management Value: VERY HIGH
To learn about the official release please follow:
Friday, March 04, 2011
Blue World Employment Situation Analysis
The Devil is in the details
OK, you know the words. Wanna sing along? The jobs data is uninspiring and that should continue to be of little surprise. A significant deterioration? No, just flat. There are simply no catalysts for robust growth. On the contrary. The health care law is still a wild card, banks are being forced to write down troubled loans (that means give away money), commercial debt is still the elephant in the room, commodities are soaring, there is turmoil in the middle East, U.S. military are being executed in European streets and politicians are running and jumping into hot tubs in neighboring states to avoid votes on cost-cutting they fear will pass. HOW DO WE THINK PEOPLE WHO INVEST REAL MONEY, MAKE REAL PRODUCTS AND HIRE PEOPLE WILL BE INSPIRED?
To the numbers:
192,000 new jobs. That’s the good news? No, that’s the headline. While we added those 192,000 jobs we removed 200,000 people from the unemployed count because they have not sought work in the last 4 weeks. We know they are out there because they did look for work within the last 12 months but because they did not look during the last 4 weeks they don’t count. What this means is that more people were eliminated from the count than got jobs. That is how the rate (8.9%) continues to drop while the unemployment picture is not meaningfully improving.
The participation rate is down since last February and flat since December 2010. The number of discouraged workers rose. The number of workers whose primary and secondary jobs are both part time is higher than a year ago. Average weekly hours worked, including overtime, are broadly flat across all workers (as opposed to non-supervisory) in tracked categories for the last 3 months. Significantly, those with a Bachelor’s degree, or higher saw another uptick in their unemployment rate (4.2% to 4.3%) over January. Conversely, the unemployment rate in the less-than-a-high school-diploma category is trending down. It improved .3% from 14.2% in January to 13.9% in February and from 15.3 in December 2010. These ends of the educational/employable spectrum indicate the quality of jobs being filled which does not inspire confidence for a breakout recovery. We have seen it reported that part time for economic reasons (poor demand environment) improved. That’s true for the all industries category. If, however we look at non-agricultural industries (the more relevant figure) we see that the situation actually got a bit worse.
If you are looking to spin the report as “positive” or “encouraging” are there figures you can point to? Sure. But looking into the detail there is still plenty of reason for caution, too.
We remain in a very defensive posture with our investment strategies and will for the foreseeable future.
Thank you for reading and…stay tuned!
Release Site: www.bls.gov
Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed. The official release site should be cross referenced for accuracy and footnoting. The analysis represents the opinion of Blue World Asset Managers, Ltd. who are not giving advice and does not warrant or guarantee predictions based on its analysis.