Blue World Jobs Report Analysis 12/07/2018

Blue World Employment Situation Report Analysis

Release Date: Usually on the first Friday of the month

Release Site: www.bls.gov

Market Impact: Usually Very High

Management Value: Critical

Brain Surgery is not Rocket Science to a Brain Surgeon©

 

Date: December 7, 2018 

Aren’t expectations incredible? We see the “experts” announcing the economy is losing steam because headline jobs numbers missed by 43K!! FUUGEDABOUDIT!

The economy is alive and well and that includes the jobs market. True, real estate is having some trouble but that has more to do with ill-advised Fed policy that may be slowed by this and some other data, but other than that the Blue World Economic Index® for November shows solid performance.

Headline total was 155K but the Private Sector added 161K. The Labor Force and Total Employed grew. Total Unemployed was down and Not in Labor Force was essentially flat. The diffusion Indexes are still very high with the Total Private Sector at 58 and the 76 Manufacturing Industries just shy of 64! There was a net down revision to the last two months but not enough to overcome the prior. Wage growth is still sluggish, but we expect it to catch up eventually, probably by Q2 2019.

Things are moving steady and strong. A little restraint from the Fed should feed Real Estate and don’t worry about trade wars. It may take a while to change learned behavior but they can’t hold out against the US for long.

Have a Merry Christmas and Happy New Year. We’ll wrap up 2018 on Friday, January 4th with the release of the December jobs numbers.

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, December 07, 2018

Blue World Jobs Report Analysis – September 7, 2018

Blue World Employment Situation Report Analysis

Release Date: Usually on the first Friday of the month

Release Site: www.bls.gov

Market Impact: Usually Very High

Management Value: Critical

Date: September 7, 2018

Brain Surgery is not Rocket Science to a Brain Surgeon©

 

 

 

 

Revisions and wages command the attention from the August jobs report. The headline is 201k while the private sector added 204k as government got smaller again. This is a solid report, but it did cool from the unsustainable pace set by the last several months. The key areas of Labor Force size, Participation Rate, Total Employed and Not in Labor Force totals lost a little ground. That coupled with a net 50k in downward revisions to the prior two months shows a bit of a return to earth, at least for August, but this data in no way suggests any slowing in the economy at large.

The number of those at work part-time for economic reasons is way down again and those part-timers for non-economic reasons is up again. The Diffusion Indexes are still over 50 even with a drop off in manufacturing jobs, and the Private Sector totals are still averaging over 200k for the year in spite of the oversized downward revisions.

The big news, however, comes from wages. Last month on WBBM’s Noon Business Hour Matt was asked about wage pressure if we are indeed near full employment. He predicted it should start to show up soon, and here it is! At .4 and 2.9 percent month over month and year on year, respectively, these handily beat estimates, and we can already hear the hawks’ wings beating the air. It will be difficult for the Fed to keep their fingers off the volume, so we see a good chance of another hike at the next meeting.

The Blue World Economic Index® posted earlier this week and we’ll see you back here at the end of the month. Have a great September 2018.

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, 2018

 

Blue World Economic Index® Report for August 2018

Brief Explanation

Blue World Economic Index®

Scale: -2 to +2

Release Date:  Usually the Last or First Business Day of Each Month

Release Site: www.blueworldassetmanagers.com

Management Value: Critical

Date: September 4, 2018

 

 

 

Analysis

While the Blue World Economic Index® held its ground in August of 2018, there are some indications of turbulence in Real Estate. On the heels of some quarterly trend upgrades last month, this Major Category showed no change for August. That is a bit deceptive, and without some major positive moves in September, simply won’t hold up. This morning’s Construction Spending report does not offer much optimism.

Outside of that the economy remains solid and cautious as things like tariffs, trade deals, mid-term elections, investigations, SCOTUS hearings, and porn star pay-offs exert their material impacts.

The Numbers

The index held essentially steady at .42, which, while a tick below July, represents a decimal rounding.

Seven out of eight Major Categories remain in the black with only Inflation still swimming in red ink. Inflation had been limping along in “mixed” territory month in and month out until PPI FD and Farm Prices, which book-end the monthly calendar, each came in at levels weaker than their multi-month averages pulling that category fractionally further South. The other four reports from the Inflation category were in line with their trends. Consumer, General, Retail, and Services also moved fractionally lower.

The only real news-makers at all for August were Employment and Manufacturing, where Employment made the only “material” move at .12 to the good. Manufacturing advanced slightly by .04, but the news comes from the Fed/Non-Fed subgroups where in a very unusual and welcome departure from normal the anecdotal heavy Fed sub-group declined, while the hard data Non-Fed subgroup advanced!

The economy is doing great in a vacuum, but the external, non-economic threats to economic health from the second half of the list above are extraordinary. Survey data suggests the cautious tone of an otherwise booming market are based in concerns that the policies producing the high activity are at risk. If we could dispense with some of the noise we’d see an even more robust environment.

The Blue World Jobs Report Analysis will post on Friday morning. We hope to see you there!

 

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release sites should be cross referenced.  The index assignments represent the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on the index.

©Blue World Asset Managers, LTD Tuesday, September 04, 2018

Blue World Jobs Report Analysis 08/03/2018

Blue World Employment Situation Report Analysis

Release Date: Usually on the first Friday of the month

Release Site: www.bls.gov

Market Impact: Usually Very High

Management Value: Critical

Date: August 3, 2018 

Brain Surgery is not Rocket Science to a Brain Surgeon©

 

 

 

 

Job growth for the private sector continues to advance at an impressive pace. Even though the headline says 157k, the Private Sector grew by 170k as government got smaller by 13k payrolls. Add to that upward revisions to May and June of 59k and we’ve got a really hot labor market! Today’s graph is the Size of the Labor Force vs. Total Employed Workers, and it shows a decidedly expansionary pattern. Review this and our post “A Flute with No Holes is Not a Flute and a Recovery with No Jobs is not a Recovery” from 2012, and you’ll get a very good visual comparison.

The Labor Force grew by 105k, Total Employed grew by 389k and Total Unemployed fell by 284k. The Participation Rate remains stubbornly below 63% at 62.9%, but the Diffusion Indexes show expansion in all private sector industries, including manufacturing, and not by a little. Remember, 50 is a break even on expansion. Both of these are holding in the mid-60’s.

The bellwether sectors of Manufacturing and Construction had another winning month, and part time workers for non-economic reasons are being hired at a break-neck pace (228k) in a mad dash to satisfy backlogs. The importance of that cannot be overstated.

Wages grew, but probably not enough to spook the hawks. That’s good. We still don’t believe inflation is a realistic threat to the expansion right now, and prophylactic moves to “head it off” are ill advised.

The jobs report is corroborated by the balance of economic reporting over the past month, including GDP. You can get a broader look at the economy at the Blue World Economic Index® report which posted earlier this week.

So far, so good in 2018. Expansion is the name of the game. Go for it with the right hand, but always keep the left hand near the brake with a watchful eye on the economy through us!

Matt is on real time today at 12:05p C on WBBM in Chicago to break it down live on the Noon Business Hour, AM780/105.9FM. If you miss it live you can get the Podcast later today.

The next jobs report is scheduled for September 7th. We’ll see you then. Have a great August!

As always, 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 03, 2018

Blue World Economic Index® Report for July 2018

Brief Explanation

Blue World Economic Index®

Scale: -2 to +2

Release Date:  Usually the Last or First Business Day of Each Month

Release Site: www.blueworldassetmanagers.com

Management Value: Critical

Date: Tuesday, August 31, 2018

 

Analysis

It’s that time of the cycle for the BWEI®. There are some major changes due to the quarterly trend analyses which always causes some turbulence, and this time was no exception and, in fact, perhaps the poster child..!  There were a couple of downgrades, but they were the overwhelming exception. We are very cautious about trend changes as they are weighted more heavily than the daily reports, so we tend to let them go a bit to make sure they have legs and that we are not hallucinating a direction.

The economy is just flat out humming, and that is reflected in the composite figures. As a matter of fact, there is only one of the eight Major Categories that remains in negative territory (Inflation), but even it made a Northerly move.

Tariffs have been a concern, but in the closing days of the month it seems they have begun to bear fruit. Please recall what Matt said on The Noon Business Hour last month when asked about the tariff issue. Tariffs can be used in two general ways. One is as actual tax policy and the other is for leverage in ongoing negotiations. In the case of this administration it is decidedly the latter, and despite all the tough rhetoric, the EU and China have taken steps in the direction of the negotiating table.

One report that needs special mention this month is GDP, which released last Friday the 27th. It came in at 4.1% which is huge anyway, but the really big news is that Inventories was a 1% drag on the total. Remember, GDP is the “stuff” that the economy “produced.” It doesn’t mean it got “sold.” We always check the Inventory component to determine the impact it had on the total. It can yield a skewed picture of the economy if GDP is big in part because inventories are up by a material amount in the face of weak sales. It means the “stuff” building up will have to be sold at discounts which hurts inflation, and retailers won’t be moving to replace the “stuff” or hiring more people to sell the “stuff.” In turn, manufacturers won’t be buying “stuff” to make “stuff” or hiring people to assemble “stuff”…so that hurts everything from employment to materials, and on and on throughout the economic web. That is decidedly not the case here. The drop in inventories is corroborated by other consumer spending and retail data from the past month, including today’s Personal Income and Outlays and Employment Cost Index reports.  Additionally, because the Inventories Report from the Census Bureau is a two-month lag, it points to a need to scramble to replenish the “stuff” because it is selling faster than it can be produced, which is a great outlook for the economy starting from employment and traveling all the way through. 

The Numbers

As mentioned above, seven of eight major categories are in the black, and that’s a first. The Composite Index shattered all prior records rising to .43 with advances in Employment, General Measures, Inflation, Manufacturing, Retail and Services. Consumer Measures and Real Estate both retreated a little bit, but the only one of any concern is Real Estate as there may actually be some trouble brewing there as six of nine reports posted negative scores. We’ll have to keep an eye on it.

Watch for the Blue World jobs report on Friday and then Matt goes on WBBM AM780 and 105.9FM at 12:05p Central in Chicago to break it all down live. If you can’t tune in you can get the Podcast here later in the day.

Have a great month and we’ll see you back here for the next BWEI® report at the end of August.

 

 

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release sites should be cross referenced.  The index assignments represent the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on the index.

©Blue World Asset Managers, LTD Tuesday, July 31, 2018