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 03, 2012
Brain surgery is not rocket science to a brain surgeon©
163,000 new jobs vs. 100,000 expected! WOO HOO, right? Sorry folks, this report is the cap on a miserable month of data. Why? Here we go…
In the winter and spring we explained ad nauseum that the falling unemployment rate was an artificial improvement in the labor picture because we can’t make the labor market better by making the labor force smaller. The uptick in the last couple of months is an indication of a deteriorating market but, as always, the details not the headlines tell us why:
The Establishment Survey indicates 163,000 payrolls were added last month. The problem is that the size of the labor force fell by 150,000 workers, the number of those not in the labor force rose by 348,000, the number of employed people fell by 195,000 and, wait for it, the number of unemployed people rose by 45,000. I’m afraid this just doesn’t make for a good report but, of course, there’s more. 25 years old and up with a Bachelor’s Degree or higher remain unemployed at over 4%. The work week length, and consequently, overtime hours are not increasing and wage increases still lag inflation.
Other data for the month show GDP at a very weak 1.5%, which falls to 1.3% when we strip out inventories. The regional Fed reports all have a common theme of contracting orders and evaporating inventories validated by a dismal factory orders report . Productivity is down, unit labor costs are up, consumer comfort, confidence and sentiment are trending down, and the FOMC acknowledges the economy is slowing but isn’t ready to “act” yet.
Many institutions out there have an interest in trying to show the data in its most positive or negative light. Since our job is to help businesses develop strategy based on the realities of the economy, we have to take the data as it is…and the data is negative.
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.