Employment Situation Analysis – 09-07-2012

Posted on September 7, 2012 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

Market Sensitivity: VERY HIGH

Management Value: VERY HIGH

Friday, September 07, 2012

Brain surgery is not rocket science to a brain surgeon©

The big question facing us this morning is “to graph or not to graph.” This is one of the worst reports we’ve seen in a while, and that’s up against some pretty stiff competition. The market silliness is always entertaining, and today is no exception. The other data-driven graphs are just striking.

The July number was revised down significantly, and that’s consistent with what we said on CBS Radio last month. {Podcast at http://owl.li/cJ3T1 – starts at 2:30 in} 96,000 net jobs is “only” about 30,000 short of the “expert” consensus, and that is just about the best news we can find no matter how deep we dive into the minutiae.

25+ with a Bachelor’s or higher are still unemployed at over 4%, which was a level unheard of since records have been kept…until the last few years.

The number of people not in the work force continues to balloon, and that’s why the unemployment rate has fallen or remained the same from time to time, not because the labor market is improving.

The work week remains flat overall, but it has fallen to its shortest duration of the year in manufacturing. That’s not encouraging. The really big news in this report, which won’t get much play but is very troubling, are the downward revisions to hourly and weekly pay totals in several sectors, including construction and manufacturing.

We’ve decided the graphs would just rub it in, and we have no desire to subject you to them.

Policy matters, folks. Policy matters.

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, September 07, 2012

Blue World Employment Situation Analysis 8-3-2012

Posted on August 3, 2012 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 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

©Blue World Asset Managers, LTD Friday, August 03, 2012

Blue World Employment Situation Analysis 7-6-12

Posted on July 6, 2012 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, July 06, 2012

Brain surgery is not rocket science to a brain surgeon©

WOW. It’s ugly out there, folks! The headline rate of 8.2 stayed the same but that is just about the end of the “good” news. We, again, point out the deplorable conditions under which an unchanged rate over 8% could be in any way spun as “good.” This is getting quite absurd and tragically predictable. Anti-business policy, oppressive banking regulation, validation of cataclysmic tax increases, immigration policy by fiat and an election who’s outcome is ridiculously unpredictable in spite of these economic conditions will continue to force consumers and businesses alike to do the same thing with their cash …keep it on the sidelines.

The rate is unchanged but that, as per usual, is very misleading. The number of jobs added outpaced the change in labor force size which, as the graph shows, keeps the rate the same even though the labor market continues to deteriorate. In fact, the actual number of unemployed people has been on the rise for the last three months!

The unemployment rate for those 25 years and older with a Bachelor’s degree or higher rose .2% back over 4 to 4.1%. That is a terrible sign. In addition the number of those at work part time for economic reasons including slack work and slow business conditions jumped. This is a big reason the “experts” scratch their heads when the BLS report fails to validate the ADP report. Hey “experts”, they count differently. This has been explained at length in previous posts that you can find by searching the archives.

There is continuing “flat” news in the areas of hours worked and overtime which tells us that activity is low. Add to that the continued uninspiring wage increases which continue in many cases to lag inflation in spite of inflation crashing down. A great many “experts” will have the nerve to be surprised by the disappointing GDP report they should be able to predict. A very deep dive into the data exposes an unsettling trend. Production and non-supervisory employees in construction are showing a downward trend in weekly earnings. The recent de facto amnesty is likely to have a grave impact on that statistic going forward.

Policy matters and these don’t work…depending, of course, on your goals.

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

Posted on June 1, 2012 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 01, 2012

Well, we think this report speaks for itself. We find it amusing that the government summary described the unemployment rate as “essentially unchanged.” When it drops by a tenth that’s an improvement. When it rises a tenth that, apparently, is “essentially unchanged.”

Wages were flat and actually down a bit in areas like manufacturing, leisure/hospitality and utilities. The much bigger concern when added to that is the reduction in the length of the work week in manufacturing and construction with manufacturing overtime hours remaining in a narrow range between 3.1 and 3.3 hours per week. These are all well below any levels that could presage more hiring. We think that’s as deep as we need go in a report that speaks for itself.

Let’s spend a minute addressing the “why” such poor results are being reported. We can’t say it enough. Policy matters and these don’t work. Businesses are doing exactly what you and I would do in uncertain times. They would conserve cash, reduce spending to the bare essentials and wait for a clearer picture. Why are times uncertain? Because no one knows what Congress is going to do with the tax code before year end, the fate of Obama Care is unknown, an upcoming election could perpetuate or totally reverse current anti-capitalistic policy and, oh yeah, Europe is trying really hard to implode. If any of this sounds like a recipe for job creation and economic growth to you we have some real estate we’d like to offer you!

Policy matters, folks, and these don’t work.

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

Thoughts on the FB IPO – Wealth is NOT zero sum

Posted on May 18, 2012 by blueworldadmin

The Facebook IPO reminds us that, contrary to political and media assertions, wealth is not a zero sum proposition. Zero sum means there is only so much of something to go around. If we have a pizza cut into 8 equal slices and there are 8 pizza eaters in the room the pizza is a zero sum proposition. It means that in order for 1 eater to get 2 slices another eater has to go without. It is popular these days to accuse the “rich” as greedy eaters of the pizza, taking a piece from others. Today we saw the birth of thousands of new millionaires and a couple of billionaires with the Facebook IPO. Now that’s what we call a STIMULUS PACKAGE!! New wealth was CREATED, not taken from others. These new wealthy people will benefit everyone by spending and investing their wealth in the economy. No one lost wealth at the moment the IPO created new wealth. The entire economy benefited. Wealth is not zero sum, folks. It is created every day and there is no limit. Don’t let anyone convince you otherwise.

Hats off to you FB team. If no one else says it, thank you.