2015

Posted on May 8, 2015 by blueworldadmin

Blue World Employment Situation Report Analysis

Release Date: Usually the first Friday of each month

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

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, May 08, 2015

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

Brain surgery is not rocket science to a brain surgeon©

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

©Blue World Asset Managers, LTD Friday, April 03, 2015

Blue World Jobs Report Analysis 02-06-2015

Posted on March 10, 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

Tuesday, March 10, 2015

Brain surgery is not rocket science to a brain surgeon©

SOMEONE forgot to set the office clocks ahead…

We owe two apologies this month. One is for the tardiness of our analysis and the other is that, well, “analysis” may be giving what we do the benefit of the doubt. We can reduce this post to mere bullet points because “analysis” becomes unnecessary once patterns are so established as to require nothing more than cursory observation to verify the patterns are intact. Heck, it’s so simple event the “experts” are starting to get it! In spite of a “great” number like 295k new jobs, we are hearing “experts” talk about things like participation rate, labor force size, and they’ve even realized there is a data set for the total number of those not in the labor force (who, by the way, are not counted as unemployed)! Wow, that only took a 6 year recovery to discover…

Here are the bullets:

295k net jobs
288k net jobs in the private sector
Participation rate 62.8% (down .1%)
Not in Labor Force grew by another 354k
Weekly hours flat
Weekly hours in manufacturing flat
Weekly overtime hours in manufacturing flat

The unemployment rate is irrelevant and no longer a proxy for the health of the economy. The evidence is building to support the position that a material percentage of the new jobs are going to illegal immigrants and wages are just barely tracking even with inflation. That last piece is part of the evidence set regarding the illegals.

It’s a mess…and the “experts” appear poised to get it.

We’ll try to be on time next month but in the meantime we hope Spring is springing wherever you are!

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

Blue World Jobs Report Analysis 2-6-2015

Posted on February 6, 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, February 06, 2015

Hey fellas, Pay Attention!!

It just keeps getting weirder…

There were huge revisions to the upside for December and November 2014, yet the number of those unemployed for less than five to more than 27 weeks jumped. The unemployment rate went up. The participation rate remains below 63%, and the number of those unemployed rose…again. Fuzzy math indeed.

That sums up a lot of the relevant numbers for January 2015, but also of note is that the headline number for this month was 257k new jobs. In a reversal from the norm, the private sector number was better than that (267k) because government reports shedding 10k jobs for the month. Hours and wages for the total private sector, construction and manufacturing remain uninspiring and that is consistent with data from all the other economic releases over the past month. Of particular note are the Factory Orders and Productivity and Costs reports. The number of those at work part-time for economic reasons is up, and sadly, there are 1.1M more citizens Not in the Labor Force than there were in January of 2014.

We follow over forty reports per month, note the data points as they’re published and follow the short and long term trends. We put it all together for an overall profile of our economy and the profile is flat. How many times can we say it? (Rhetorical) Policy matters and these don’t work.

Thanks for reading and, please, stay tuned…

Release Site: www.bls.gov

Key Labor Market Metrics 2011 – 2014

Posted on January 12, 2015 by blueworldadmin

Here are the key metric graphs reflecting the annual data with revisions and including the full years of 2011 – 2014. Revisions were minor and did not alter any of the poor short or long term trends reflected.

Starting at top, left we have the size of the labor charted against the total number of those employed. We can see as the lines converge the unemployment rate calculation will become smaller even though there is no improvement in the labor force. This point is validated moving to the right and then below, left showing the participation rate and the number of those no longer in the labor force. The fact that the graph showing those no longer in the force is rising faster than the total employed line is very unsettling and not recovery-esque. Finally at below, right we see the length of the work week showing a very narrow average over the period.