Blue World Employment Situation Report Analysis 11-02-2012

Release Date:  Usually the first Friday of each month

Release Site:

Market Sensitivity: VERY HIGH

Management Value: VERY HIGH

Friday, November 02, 2012

Brain surgery is not rocket science to a brain surgeon©

Boy! It just keeps getting weirder and weirder, doesn’t it?  114,000 jobs and the rate falls by .3% in September and then we get 171,000 jobs and the rate goes UP .1% in October!!??!! WEIRD, right?  Not really.  (The really weird part comes later) It all comes back to what we’ve been saying for almost two years about the relationship between the size of the labor force and the number of those employed and unemployed.  As we detailed in our last post, A Flute with no Holes is not a Flute and a Recovery with no Jobs is not a Recovery, in order to have a true economic recovery we have to have the work force and the number of people working both increasing simultaneously.  In October we finally saw a little bit better growth in the labor force but the number of new jobs just wasn’t enough to keep pace and that’s been the problem all along.  Remember, we need about 250,000 new jobs per month just to break even with the number of those becoming work-eligible.  Of course, there are those that will say that 171,000 is a good step toward that 250k.  The problem is that we’ve seen that step taken before in that last couple of years but there has been no upward pattern established.  It continues to be a series of dips and blips with no sustained trend of growth.

Now, the really weird stuff…

We got 171,000 new jobs and the rate went up .1% to 7.9%.  We get that but what is very unnerving is the following:

  • The number of unemployed workers INCREASED from 12.1M to 12.3M
  • There were sharp increases in those unemployed:
    • Less than 5 weeks (newly unemployed)
    • 5-14 Weeks
    • Over 27 weeks
  • The length of the work week:
    • Remains flat, overall
    • Shortened in:
      • General manufacturing
      • Manufacturing overtime for production workers
  • Hourly and Weekly wages fell across the board with notable decreases in construction and manufacturing

Surprising?  Not if we remembered a GDP report that signaled economic growth at an unacceptable 2% and which will, undoubtedly, be revised lower.

Policy matters and these just aren’t getting it done.  Economically, we don’t care what works as long as it works.  We remain committed to the notion that there is nothing wrong with being wrong.  The crime is in ignoring the objective data telling you that you’re wrong and not changing course.  Regardless of who wins on November 6th, 2012, we hope they see the patterns and offer reasonable strategic modifications to get us back to where we could and should be.  It really won’t take that much.

For over two centuries American men and women have given their lives to protect our right to choose our leaders and transfer power peacefully.  Regardless of your preference, please vote.

Thanks for reading and, please, stay tuned…

Release Site:

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release site should be cross referenced.  The analysis represents the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on its analysis.

©Blue World Asset Managers, LTD Friday, November 02, 2012