Blue World Employment Situation Report Analysis
Release Date: Usually the first Friday of each month
Release Site: www.bls.gov
Market Sensitivity: VERY HIGH
Management Value: VERY HIGH
Friday, May 03, 2013
Brain surgery is not rocket science to a brain surgeon©
THE CAUTION FLAG IS STILL OUT!
165,000 net jobs created with an upward revision of last month’s abysmal 88,000 to 138,000 has caused a media/market “yippee.” Allow us to remind those who invest real money and employ real people that this remains consistently about 100,000 jobs per month short of break even with the participation rate reaming at record lows as the civilian labor force fails to grow.
The copy/paste function is getting worn out regarding the continued observation that “reductions” in the unemployment rate are due to a simple mathematical truth instead of any actual improvement in the labor market. Yes, April 2013 demonstrates that the increase in jobs outpaced the growth in labor force size. That moves the two tops closer together and we have the artificial “improvement” in the rate. The current graph…
The rest of the story could be titled “The Next Installment of BLS’s Chamber of Horrors.”
We haven’t seen a “good” labor report in years, now. Some have been worse than others but as we have shown, the pattern of this “recovery” does not match that of any other economic recovery period going back to the 1970’s.Please see our post “A Flute With No Holes Is Not A Flute and a Recovery With No Jobs Is Not A Recovery” http://ht.ly/kFX5C
Many argue that the employment numbers are historical in value and some say they have predictive relevance. The truth is that both statements are accurate. There are hundreds of lines of data in the full release spread across more than two dozen tables. We read the data so you don’t have to! There are some very scary trends developing in the foreshadowing portions of this report.
The 25+ with a Bachelor’s degree, or better crowd rose back to 3.9% which continues to be historically record-setting but appears to have become the new “norm.” Additionally, however, we have now seen the rate moving back up toward four percent coupled with a REDUCTION of average weekly pay! That’s not good.
The work week for all employees hit a three month low in April 2013 and is lower than April of 2012, all of which is bad enough considering where we are in the cycle but more concerning is the thee month down trend in work week length in construction and manufacturing with corresponding reductions in weekly earnings in those sectors. If you follow us on Twitter, Linked In or FB this comes as no surprise as we’ve shared some detail from the regional Fed. Manufacturing reports this month. All have been negative and validated by this morning’s diffusion rate across the 81 manufacturing industries falling to 44.4, the latest data point in a steep, three month downward trend. (The diffusion index indicates the number of companies adding as opposed to losing jobs where 50 is break even, below is contraction and above is expansion.)
Those working part time for economic reasons, especially slack work conditions, took a big jump and there were significant increases in those unemployed between 1 and 26 weeks. Those unemployed less than 5 weeks are new job losses.
The report is bad. The market is flying. We are in it and riding the wave but we keep moving the safety net closer and closer on the chance that economic fundamentals once again become at least as important as government actions and headline spin. Let us know if you’d like suggestions.
If you are a business manager/owner then pay close attention to your internal financials, industry dynamics and Blue World’s content via the social media outlets.
Based on popular demand we are sponsoring a seminar at the Union League Club in Chicago on Friday, June 6th. Content centers on the core entrepreneurial skills required to truly manage a business toward success. The title says it’s for health care professionals but it applies to any business so please realize anyone is welcome. Course description and registration links follow:
Course Outline Link:
As we are about to publish we see factory orders have dropped over 30% more than “expected” by the “experts.” Surprised? Not if you’re following Blue World!!
Thanks for reading and, please, 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. 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, May 03, 2013