Blue World Jobs Report Analysis 11-07-2014

Posted on November 7, 2014 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

Market Sensitivity: VERY HIGH

Management Value: EVEN HIGHER

Friday, November 07, 2014

Brain surgery is not rocket science to a brain surgeon©

What can we tell you? Same ole’, same ‘ole…but we are not blind to the fact that that, in and of itself, it is a slight improvement even if for just one month. We have had many reports over the last several years that were of the copy-and-paste sort, and then we’ve had those that fell well short of copy-and-paste by virtue of the detail exposing the truth about how bad it was in spite of the headline numbers. That might cause copy-and-paste to become a bit of a relief. But let’s be honest, this is not a “good” report, the labor market is not improving, and this is not a “recovery.”

The headline says 214k new hires, but the number we care about, the private sector, only added 206k. Last month we pointed out the Not in Labor Force number was growing faster than the number of new jobs created each month. Some of our “expert” critics are already elbowing us (electronically) this morning about the 206k drop in that stat. Ya know how we keep sayin’ trends and comparisons matter a lot more than data points? Maybe we can teach those “experts” something here. True, the number did drop by 206k, but in spite of that there are still 622k more than there were in October of 2013!! We know our readers get it, but the experts need pictures so we’ll put in the graph later. For now, here is some perspective.

The number of Employed Persons is 147,283M
The number of persons Not in the Labor Force is 92,378M
Since January of 2011 the Labor Force has grown by 2%
Since January of 2011 the number of Employed has grown by 6%
Since January of 2011 the number of persons Not in the Labor Force has grown by 7%

The 2% growth in the labor force vs. the 6% growth in employed people further illustrates why the unemployment rate, as published, is invalid as an economic metric, as well as both being pathetic for a three year period in the United States of America economy!. The work week and manufacturing overtime remain flat, the participation rate is still languishing in record low territory, those unemployed with a Bachelor’s degree or higher ticked up, and meaningful wage growth remains absent. Here’s that Not in the Labor Force graph with the labor force vs employed thrown in for good measure.

Maybe a cubicle-based “expert” can look at 92 million Americans (or whatever) out of work and see a “recovery,” but for those of us insophisticates who just own or manage businesses, invest real money, employ real people and make decisions that actually affect the economy, well, let’s just say “we don’t see a recovery.”

How many times can we say it; policy matters and these aren’t working. Do we have some optimism that the election results from 11/04/2014 can lead to some more effective policies? Yes, but remember, Washington is full of “EXPERTS!”

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, November 07, 2014

Employment Situation Report Analysis 10-03-2014

Posted on October 3, 2014 by blueworldadmin

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 03, 2014

Brain surgery is not rocket science to a brain surgeon©

Records were made to be broken, but as we all know some records are the last ones you want to be the one to break.

play_a_prairieviewplayers_576_crop_north

Source: espn.go.com from an article in Bleacher Report at http://bleacherreport.com/multiple-sports

As the “expert” world cheers, Blue World cries FOUL!!”

80 consecutive losses as a football team may be an embarrassing record to hold, but the record this administration broke in September 2014 is far worse than just embarrassing!

Wow! This report is worse than last month’s, but it will be hard to break through the manic headlines to find the truth!

Occasionally we’ll need to remind readers that the jobs report number has been politicized. Here’s a Forbes article that echoes Blue World’s analysis following a new BLS chief appointment and a fraudulent drop in unemployment to below 8% just before the 2012 election. Cynical? Absolutely, but not in this case. The mathematical proof is in the BLS pudding. Fewer jobs equals an improved unemployment rate, and more jobs has yielded a deterioration in the rate? Not to mention that the number of new jobs published in those situations could NEVER cause an honest rate calculation to move that much. How do they do it? There are lots of tricks they can used to “cook” the headline numbers, but the truth is still hiding in the weeds. Why is the truth allowed to survive in there? We suspect it’s not because they can’t fudge the details. We think it’s just because they figure so few pay attention to them that it doesn’t matter. Unfortunately, they’re correct. That’s why you, the astute manager and investor, follow us to know what’s really going on. As Matt said on CBS Radio last month, the unemployment rate has lost all credibility as a proxy for the health of the labor market. Here’s a link to the of that show. This month is no less a fraud on the managing, investing and voting public. Let’s look at why that’s true…

248k new jobs. Great! Of those, however, only 236k are in the private sector which keeps us well below our 250k requirement to just break even on those becoming eligible to work each month. The labor force lost almost 100k more members in September 2014 and those not in the labor force swelled by 315k. Yes, 315k. So, 236k new jobs…and 315k left the labor force. See the fraud yet?

The work week remained range bound at just 34.6 hours but construction hours fell by .2 hours. That’s big. It’s also the second worst showing of 2014. Hourly wages actually declined.

Without fully detailing a diffusion index, we’ll just say here that readings over 50 point to expansion and those under 50 show contraction. Consider the uncomfortable three-month trend in the manufacturing sector’s diffusion index starting in July: 56.2, 54.9, and 51.9. That’s not pretty.

All that would be bad enough, but there is one glaring statistic that you will see here and from very few other responsible analysts…the participation rate. Ladies and gentleman, the available, eligible labor force for the United States of America has set a NEW RECOVERY RECORD LOW PARTICIPATION RATE in September of 2014! For those of you keeping score, that’s 5 years, 3 months into a “RECOVERY!” The participation rate has fallen to 62.7%, a level not seen since 1978. The sad chart is included below.

We say ignorance is curable but stupid is forever. So let’s leave ignorance out of the equation and focus on stupid, then ask what’s worse; stupid or dishonest? We say “stupid AND dishonest!” The participation rate is low because baby boomers have done so well that they can afford to retire early especially since they have access to affordable healthcare under Obamacare?!!? We’re not kidding! You have to go and read the comments under this article from Business Insider. It is UNBELIEVABLE! Sometimes calling someone “stupid” is an insult…to stupid people.

Business owners, managers and investors everywhere need to be aware of the realities of this economy. Our governmental leaders are out there telling us the economy is fine and improving. They tell us their policies are working and we are just too ignorant to see it. Believing this rhetoric is nothing short of dangerous to our economic health!

So, as always, thanks for reading, keep the defense on the field, and for management and investment sake please, stay tuned…

Release Site: www.bls.gov

©Blue World Asset Managers, LTD Friday, October 03, 2014

Blue World Jobs Report Analysis 9-5-14

Posted on September 5, 2014 by blueworldadmin

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, September 05, 2014

Brain surgery is not rocket science to a brain surgeon©

Well, we can’t fall back on the copy-paste-repeat line this month. The jobs report is out, and it is ugly. Predictably so for the non-experts, but the experts are “surprised” again because they think the last couple of reports showed improvement, promise, and yes, even the “r” word; RECOVERY. If you missed it you can review the reasons they were wrong by reading last month’s summary at Blue World Jobs Report Analysis 8-1-2014

The headlines report 142k net new jobs out there, but the number we care about is only 134k because 8k are government hires. The unemployment rate improved to 6.1%, but we’ve well established that the unemployment rate has lost all credibility as a proxy for the health of the labor market. So has the number of new jobs number, for that matter. We have some updated graphs for you today that illustrate the continuing phenomenon supporting those observations.

The top graph shows the employed line rising against a stagnant labor force line giving us the bogus improvement in the unemployment rate. This is confirmed by the participation rate.

Do we need to say that the “Not in Labor Force Line” should not demonstrate a stronger, smoother, more consistent trend than the “Labor Force” growth line…

The work force is 64k smaller than it was in July, and the participation rate has equaled its all-time record low (62.8%) for the sixth time in 11 months. The length of the work week has been range bound between 34.3 and 34.5 hours, incredibly, since January of 2012. Weekly construction hours pulled back again and overtime required by manufacturing remains at 3.4 hours per week, down a tenth from its pathetic three-year high of 3.5 hours.

While we expect some more downward revision, at present wages for the total private work force are up .2%, 1%, and 2% for one, six and twelve months, respectively. Recovery numbers? We think not. So, wages are still boring but at least reasonably pacing current inflation. When the pressure from their poop in the sewer exceeds the weight of the FOMC members standing on the manhole cover that will change…dramatically.

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

©Blue World Asset Managers, LTD Friday, September 05, 2014

Blue World Jobs Report Analysis 8-1-2014

Posted on August 1, 2014 by blueworldadmin

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 01, 2014

Brain surgery is not rocket science to a brain surgeon©

We are sending this postcard to the Experts who are cheering the last 2 month’s reports.

Yep, another world beater!

We took July 4^th off and didn’t post a report. We wrote it for the sake of data, but we figured if we didn’t feel like reading it on the 4^th of July, you wouldn’t either. Unfortunately one could read the June post and/or this one and not have missed a thing. This is starting to feel like a soap opera in that once we know the characters we can step away for months, watch one episode and be completely back up to speed.

Will the markets like it? Who knows (or cares)? There has been a fundamental shift in market behavior away from economic fundamentals to a focus on government action; so who cares how they take it? We’re concerned with providing actionable intelligence to the small and mid-sized businesses out there who provide the engine for our nation’s economic growth. In other words, we care about reality in the real world …you know…as opposed to Planet Cubicle where the experts live, work, and analyze data! What does the real world think of this report? The real world knows it remains terrible.

Now that the qualitative pre-amble is over, let’s quantify “terrible.”

Last month’s 298k was actually 270k when we subtract the additions to government payrolls. That 270 would still be a respectable number early in a recovery! The unemployment rate decrease last month was our usual phenomenon of the labor force line and unemployed line moving in opposite directions. That’s how we continue to claim the headline rate as reported is bogus and that position is validated by a participation rate graph that continues to make lower highs and lower lows.

Those things remain true for July. There were only 198k new jobs once we net the private sector with government hires. But guess what?!! The number of those unemployed also grew by…wait for it…197k! The rate ticked up by a tenth, but again, who cares about the rate anymore, especially as the participation rate remains in all-time record low territory at 62.9%. 25+ with a B.A. or better are STILL unemployed at rates over 3%. The Not In Labor Force row from table A tells us there are 92M Americans who didn’t even look for work in the past month. That number is a staggering 2M more than there were a year ago. There were big increases in the number of those out of work for 1 to 14 weeks. In fact, that number alone nearly eclipses the total of new hires for the month. The length of the work week for all employees has not changed in three months while manufacturing hours and overtime both fell posting their worst numbers in the same time period.

Wages? Meh.

So, to all our experts out there who exclaimed “yippee” on the BLS release dates for June and July of 2014, wish you were here!

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

Blue World Jobs Analysis 6-6-2014

Posted on June 6, 2014 by blueworldadmin

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, June 06, 2014

Release Site: www.bls.gov

“The Labor Department said the economy has now recovered all 8.7 million jobs lost during the recession.”

Sometimes the only word that fits is “fraud!” Maybe it has taken six years for the world’s biggest, strongest and best economy to generate 8.7 million jobs. That’s certainly nothing to be proud of when we consider it only took about 18 months to lose them, and our prior postings show the graphs of this “recovery” relative to all of the other legitimate recoveries since the 1970’s. Those charts can be reviewed in our post A Flute with no Holes is not a Flute and a Recovery with no Jobs is not a Recovery

It is unconscionable to portray this as a milestone when the number of unemployed people has exploded, the participation rate languishes at all-time record low levels, the labor force is less than two million workers bigger than it was in 2008, and the increase of Americans receiving food stamps has outpaced the number of Americans getting jobs! Then we have to consider the technical stuff about how the numbers are tabulated and realize that those who are out of a job but have not looked for work in the last four weeks are not even counted. Let’s hunt the elephant in the room and remind ourselves that a few months ago the Obama administration was caught red handed fudging the counts on the household survey to make the picture appear better. Makes it kinda tough for lowly employers like us to make decisions based on the “data.”

The numbers are as expected. 217k hires nets us 216k in the private sector by subtracting the 1k added by government. The unemployment rate, which is hardly worth acknowledging anymore, held at 6.3%. That fuzzy math we’ve become so accustomed to is still at work.

In spite of the 217k, the number of unemployed persons rose again and the participation rate held at 62.8%, extending its all-time record low level to two consecutive months and the fourth month at that level since October ’13. There was a sharp rise in the number of those unemployed between 1 and 14 weeks. That is validated to some degree by the recent streak in the weekly jobless claims. The work week is flat at 34.5 hours for a third straight month with overtime in manufacturing following suit. The construction industry actually saw their week shortened a bit. Overall, wage growth remains unexciting.

“Fraud! Cried the maddened thousands and the echo answered Fraud!”

Full points to anyone who can tell me what poem that’s from. Hint: it’s very apropos.

As always, we truly appreciate your time. Thanks for reading and, please, stay tuned…