Blue World Jobs Report Analysis 7-2-15

Posted on July 2, 2015 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

Release Site: www.bls.gov

Market Impact: VERY HIGH

Management Value: CRITICAL

Thursday, July 02, 2015

Brain surgery is not rocket science to a brain surgeon©

OUUUUUUUCH

Policy matters, and these don’t work…unless the goal is to continually weaken the American economy. We need to wake up and realize that 93 million Americans out of work with fewer than 63% of available workers actually participating in the job markets is NOT A RECOVERY!

Last month we were full of optimism and excitement because the report was mixed. Today…not mixed. We can’t even say we’re just 0 for June because all the good numbers from April and May were revised down. June of 2015 has proven to be a blood bath. Want evidence?…the report is so bad the markets can’t even get excited that a rate hike has just been pushed back yet again. Just for the record, Matt was about the only voice predicting there would be no rate hike in June when he was on CBS radio in Chicago for the May report.

Usually we need to dive into the deep end of the data pool to find the true weakness in the report, but today all we have to do is wade into the kiddie section.

Why did the unemployment rate drop? Because the number of those in the labor force fell by double the number of new hires, silly! Yes, 223k net jobs added as the labor force shrank by – wait for it – 432k! The number of those describing themselves as “employed” was down 56k and those identifying as “not in the labor force” swelled by a staggering 640k.

Now, all that is bad but can be summed up by the stat that takes center stage this month. The participation rate had set and been hovering around an all-time “recovery” low of 62.8%. June of 2015 saw that floor breached setting a new low of 62.6%. The chart is included.

There were 223k net new hires and that is the total private sector as government payrolls ended the month even. While below the consensus it is still over 200k which is generally respectable BUT…as we said above, downward revisions totaled negative 60k over the last two months, the work week was stagnant again, wages were flat and actually pulled back .3% to an even +2% for the year.

Is there more weak data in the tables to report? Yes, but we’ve had enough for one day.

Policy matters. These don’t work.

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 Thursday, July 02, 2015

Blue World Economic Index® – June 2015

Posted on June 30, 2015 by blueworldadmin

Blue World Economic Index™

Scale: -2 to +2

Release Date: Usually the last Business Day of Each Month

Release Site: www.blueworldassetmanagers.com

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, June 30, 2015

Blue World Employment Situation Report Analysis 06/05/2015

Posted on June 5, 2015 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

Release Site: www.bls.gov

Market Impact: VERY HIGH

Management Value: Critical

Friday, June 05, 2015

Brain surgery is not rocket science to a brain surgeon©

Cheers

MIXED!!

Ok, perhaps a bit pathetic to express such exuberance over “mixed” but we have to give credit where it’s due. All the focus will be on the 280k jobs which is a solid post. The problems usually show up below the headlines, and this month is no exception, BUT some of the underlying data support the headline. We haven’t seen that in, well, years! So let’s have a look.

On the plus side…

The headliner is 280k, but the important metric is the private sector tally which stands at 262k, 13k above the twelve month average. The civilian labor force grew, the total employed count rose, the number of those not in the labor force fell slightly below 93M, and private sector payrolls logged a solid gain. Folks, that’s a positive on four out of the first six metrics we use to analyze the report. That is a record for recent times.

Some negatives? Yes. The fact that we got so many jobs with a corresponding increase to the unemployment rate is always a clue that something is amiss. The participation rate ticked up to 62.9, but so what? That is still hovering near “recovery” lows. The total number of those reporting they are unemployed grew, the work week remains tightly range-bound, and wages continue to be uninspiring especially in the face of the exceptionally weak Productivity and Costs report from earlier this week. Of significant note is that the diffusion index in manufacturing has been struggling to stay at 50 and fell below again in May. That tells us the manufacturing sector is in contraction.

The Blue World Economic Index is still slightly negative, with 4 out of 8 segments sporting negative composites so if you employ real people, run a real business, and invest real money we recommend continued caution.

More positives than usual for May of 2015 might be a good start but as we know, it’s not the report that matters. It’s the trend.

So…here’s to hoping for a positive new trend!

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

©Blue World Asset Managers, LTD Friday, June 05, 2015

Blue World Employment Situation Report Analysis 05/08/2015

Posted on May 8, 2015 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

Release Site: www.bls.gov

Market Impact: VERY HIGH

Management Value: CRITICAL

Friday, May 08, 2015

Brain surgery is not rocket science to a brain surgeon©

Don’t the markets just kill ya? The report is weak, BUT the market is flying because…revisions downward last month make the current as-expected numbers look like the economy is improving, but not improving well enough to cause fear of a rate hike by the Fed! WOW! “EXPERTS!” We still remember when economic fundamentals were more important to the markets than government activity speculation!

Yes, revisions are back in the news this month. Over the past three months the net jobs added was reduced by 39,000, giving us a three month average 191k net jobs per month. That includes reducing an already dismal 126k estimate from March down to 85k. When we look at just the private sector, which is what we care about, that drops to 189k per month. That won’t cut it. But, as we know, the unemployment rate and the net number of jobs no longer tells us anything about the health of the labor market because the labor force is growing far more slowly than jobs, giving us that artificially low unemployment rate. That trend continues uninterrupted.

The number of those Not in the Labor Force grew, again, and now stands over 93M, a mark we broke in March. Remember, they are not counted as “unemployed” for the rate calculation because they haven’t looked for work recently. Factor them in, and the true unemployment rate is in the 11% neighborhood while the participation rate is still wallowing around “recovery” lows.

The work week for the private sector is still flat, but some data in the deep end of the pool is more revealing and consistent with other reports from the past months. Manufacturing weekly hours fell to 40.8, a number not seen since April of 2014, but Overtime Hours in Manufacturing is on a four month slide now down to just 3.2 hours per week. We had to go all the way back to July of 2013 to see a number that weak. Hourly earnings are still uninspiring at 2.3% for the full private sector. Construction is the better at 2.6% for 12 months, and manufacturing lags at 1.7%.

The first graph shows the growth of the labor force relative to jobs growth, and the other shows the growth of those Not in the Labor Force. We could have added the Participation Rate graph, but why pile on?

Size 5-15

Not In 5-15

If you’re an “expert” it’s ok to view the report through the prism of paragraph 1. If you invest real money in real business and employ real people, we have no choice but to recommend continued caution, not just due to this report but because of the 40+ reports followed every month by the Blue World Economic Index which remains in negative territory.

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

Blue World Employment Situation Report Analysis 04-03-2015

Posted on April 3, 2015 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, April 03, 2015

WOW, this is bad. Not unexpectedly bad unless you happen to be an “expert.” We continue to point out how bad the labor market is, and we know that is in stark contrast to what we see in the headlines. This was borne out by a friend who said he reads our reports, but they make him angry. (Thanks for reading and for the input, Mike.) We write these to try and provide managers, business owners and investors with additional actionable intelligence for decision making, as opposed to steering perception so we calls ‘em like we sees ‘em…and what we see is erosion, not “recovery.”

We base our analysis on the numbers and trends, so let’s get to it. We’ve been saying that the number of new jobs created and the unemployment rate no longer matter because the labor force is stagnant. March of 2015 is no exception. The net gain to the private sector was 129k, well below expectation but again, that’s not the news. The real news is that the labor force shrank by another 100k, the Not in Labor Force number grew over a quarter million, and the Participation Rate tied its “recovery” …low?!? Oxymoronic? Yes. Sad and true? Yes.

There was some even more disturbing data in the deep end of the pool. First, those working part time due to slack work conditions grew by over 200k, and second was “news” from the manufacturing sector. News is in quotes because it is only “news” if we don’t follow the monthly regional fed manufacturing activity reports. Fortunately we do. The jobs report includes a diffusion index for the manufacturing sector. A diffusion index is very simple to interpret, because a number above 50 indicates expansion and below 50 shows contraction. The March 2015 diffusion index in manufacturing came in at 47.5. That is bad enough but it becomes virtually catastrophic when we see that February 2015 was 61.3 and a year ago it was 57.5. The number validates what we’ve seen come out of the regional Fed reports, which were red across the board for the internal Blue World Economic Index during March.

For those who invest real money, employ real people, and take real risks so that others may work, earn, learn, and grow we remain grateful and will always do what we can to help make decision making more informed. We feel we owe it to you. For now we continue to recommend you keep the defense on the field.

Happy Easter!

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov