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, October 07, 2011
Brain surgery is not rocket science to a brain surgeon©
Well, folks, you can be disappointed all you want but if you’re surprised you haven’t been paying attention (or at least not reading Blue World.) The report is another bad one and that can’t come as any bigger surprise than the prior several months. Costs remain high, consumers are unemployed and, as of September, manufacturing workers are making no more money than they did in the summer. This keeps demand low and businesses cautious. Help on the horizon? We think not. The so-called “Jobs Bill” being promoted by the White House (and avoided by Senate Democrats) is a stimulus bill with a new name because “stimulus” has justifiably become a dirty word. Are there some tax reductions in the bill? Yes. Are tax reductions good? Usually but not when they are insignificant window displays in front of a warehouse full of bad policy. One-off tax breaks cannot improve demand or bolster optimism when used as gimmicks and enticements for what is otherwise an anti-private-sector-business-for-profit philosophy. That’s true no matter which party tries it. The people who invest real money and hire real people won’t fall for that nonsense. They have too much real capital at risk. Tax reductions only matter when they are the instruments in validation of a complete business-friendly platform.
The numbers? O.K. You asked for it.
The overall rate was unchanged at 9.1%. If that now seems like GOOD news we are in a lot of trouble. Below the headlines we find the unemployment rate for those 25+ and holding a Bachelor’s degree or higher remaining in an unacceptable range between 4.1 and 4.5%. Table A-15, Row U-6 showing the total unemployment rate including marginally attached and discouraged workers rose from 16.2% to 16.5% on a seasonally adjusted basis (summer jobs ending, for example.) Those unemployed for less than 5 weeks and more than 27 weeks also increased. That is bad news at both ends of the bookshelf especially when considering those working part-time for economic reasons (not enough work or could only find part time employment) also rose. Some are trying to spin the addition of part-timers as a good thing. The problem is WHY they are part time. It is not an indicator, in this case, of rising employer optimism. That’s also how the ADP report can be deceptive when using it to try to predict the BLS report. The ADP counts payrolls not people and jobs. One person with three part-time jobs can look like three “new” jobs even though only one worker is employed. The average manufacturing hours worked and wages earned were flat and layoffs were announced that have not hit the numbers yet.
We keep saying it and it continues to be validated. Policy matters, and these are bad. Sometimes it’s no fun to be right.
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.