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, August 02, 2013
Brain surgery is not rocket science to a brain surgeon©
The Song That Stays the Same…
If you’ve ever watched a soap opera, dropped it and picked it up again about a year later you found you hadn’t missed much. It feels like that with this damn jobs report. We missed the June report due to the karate national championships in Greenville, SC. Just a quick shout out to Greenville. What a great town.
Hey, new jobs were created and the unemployment rate fell!! I remember the good old days when news like that signaled an improving economy. Now, as our readers know, it just means that we were on the plus side of new jobs but the number of those reporting as available to work either increased less or, as is the case for July 2013, shrank! That’s right, we added net 162k jobs in July but the civilian labor force got smaller…again. Correspondingly, the participation rate fell by .1 and those reported as not in the labor force grew by nearly a quarter of a million! Many of the job gains came from the lower end in food service and hospitality.
Some other revealing negatives showed up. Wages are down overall and in manufacturing in particular. The work week got shorter for all employees and is back to where it was in July of 2012 but the manufacturing work week has fallen below the one year ago level and overtime hours fell by .2, an unusually large move.
So, what’s new(s)? We have to start to wonder about something. We have been very critical of the use of the word “recovery” over the past many months because we have argued (and defended) a position that we are not in recovery. Trivial data like historically low participation rates, GDP below 2 percent, trendless regional fed reports, etc. tend to cast doubt on recovery assertions. After all, we have just learned that for every job created since the “end” of the recession we have added at least two people to the food stamps rolls. That has never been a sign of recovery in America and we should not accept it as such now or ever. BUT, if we were to concede a recovery by its broadest, most charitable definition we are at a point where we have to ask this. “How long does a ‘recovery’ last?” If the recession ended in 2009 as commonly reported, shouldn’t we have been talking about the recovery in the past tense by now? How many “recoveries” last four years? How many “recoveries” boast stats like these? It just doesn’t hold water, folks.
Investors, business managers and owners, we still urge caution, defensive strategies and avoidance of rose colored glasses brand optimism. It’s still very weak out there with huge uncertainty and risks internationally and domestically. Obamacare implementation is among the biggest. They are trying to deny O-care’s effect on the move toward part-time employment but just take a look at the Employed Persons at Work Part Time section near the bottom of Table A at www.bls.gov.
We hope you’ve all had a great summer and God bless all the kids returning to school. Work hard and remember, never study to “pass the test.” Always study from the point of view “could I explain this to someone else.”
See you in September.
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, August 02, 2013