Blue World Jobs Report Analysis 8/4/2017

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

Friday, August 04, 2017 

Brain Surgery is not Rocket Science to a Brain Surgeon©

GREAT…if it holds…but some WONDERFUL news was hiding in the weeds!

Today’s release provides plenty of reason for OPTIMISM. Are you paying attention, Fed? That is the only downside we can see to this report, the potential overzealousness of the Fed in pursuing another rate hike. Yes, this is a fine report, but it is still in the overwhelming minority of hard data reports hinting at any strength or momentum. Additionally, one report does not a movement make. We need to see this kind of strength sustained and built upon before declaring “improvement.” We can’t just keep sprinkling a good report in here and there with other mediocre to poor reports and be gung ho about raising rates. So, that’s our cautionary note. Now, let’s go enjoy the numbers!

The headline is net 209k, and of those 205k are Private Sector gains. That’s the first time since February that the private sector topped 200k. The Labor Force, Total Employed, and Participation rate were all up. Please continue to be mindful, however, that participation is still below 63%, but let’s not let that be rain on today’s parade. Up is up. The Not in Labor Force tally is down two months in a row and tantalizing us with a suggestion of flattening. That’s the graph this month. Total Unemployed is essentially flat to June. Wages were good for the month, still rather muted for the year, and the work week stayed level.

Revisions essentially netted out, but the big news deeper in hiding was that we just saw our first reliable hint that reality is catching up to sentiment in Manufacturing as we’ve had two big months of gains in a row to coincide with and validate the anecdotal Regional Fed reports in the Blue World Economic Index®. Services were also squarely in the win column for July.

All in all, two decent months in a row where July is a little better than June and this will provide a much needed lift to the Employment category of the Blue World Economic Index® for August, which will post at the end of the month. See you then!

 

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 04, 2017

Blue World Economic Index® Report for July 2017

 

 

 

 

 

 

 

 

 

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

Tuesday, August 1, 2017

PODCAST

Analysis

The Blue World Economic Index® for July 2017 was essentially flat for the month showing just a .01 improvement to -.09 from a -.10 in June. Our read is that the economy wants to let loose, but the continued and mounting uncertainty over everything from policy to Putin is just too big an anchor to allow for take off. We were, frankly, surprised that consumer and business optimism continue to hold up so well in the absence of any hard data to support the anecdotal measures, but the momentum slip is palpable. If something tangible doesn’t happen soon, those numbers simply won’t hold. The Fed would do well to react to actual economic data as opposed to anecdotal survey measures and the stock market in considering further rate moves.

The Numbers

Of the eight Major Categories Consumer Measures, Inflation, and Retail pulled back fractionally while Employment, General Measures, Real Estate, and Services made small moves to the North, where General Measures was the only double-digit gainer at .14. Overall Manufacturing was unchanged as the Fed subgroup resumed its climb by .12 to .53 and the Non-fed subgroup lost .03.

We are now evenly split with four Major Categories under water and four in positive territory. Employment, Inflation, Retail, and Services are still sporting red ink while Consumer, General, Manufacturing and Real Estate are positive, all of which made small advances except Consumer Measures which fell a noticeable .07 down to .15

The BLS jobs numbers will be out this Friday the 4th and we will be here in our assigned seats to read, analyze, and report.  See you then.

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, August 01, 2017

 

Blue World Economic Index® for June 2017

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

Release Site: www.blueworldassetmanagers.com

Brief Explanation

Date: Friday, July 7, 2017

Brain Surgery is not Rocket Science to a Brain Surgeon©

Rate hike? REALLY?

Wow, we’ve seen some speculative moves in our day, but this one is worthy of commodity speculators!! We thought either we missed something or they are betting the come. Of course, we know it’s not the former! The notes essentially confirm their decision is based on what they think will happen as opposed to what is happening. Most notably, they think with the Labor Market “strengthening” consumers will start spending soon and that coupled with wage acceleration will drive inflation. Those are some high odds bets considering nine years of flat “expansion.” Gotta love dem “experts! ”

Let’s look at what’s really happening. The BWEI® Composite pulled back from -07 to an even -.1. Deterioration was led by Employment (-.21) and Inflation (-.14) GOTTA LOVE DEM EXPERTS!! (Apologies for the outburst…) There were fractional declines in Consumer Measures and Real Estate with Manufacturing holding unchanged at the Category Composite and Fed sub-group. Minor gains were seen in General Measures and Retail, although the retail improvement was led by the Red Book weekly report which is notoriously contrarian with other retail metrics. The most substantial move to the upside was Services at a .11 pickup.

Rate hike? We think it a seriously big bet, especially as the talk of recession and market meltdowns is being broadcast from Marshall stacks.

We’ll see!

Matt will be on WBBM in Chicago to talk about the June jobs report at 12:09C. The report is up here.

Have a great month and we’ll meet back here in August 2017.

 

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 Friday, 7/7/2017

Blue World Economic Index® for May 2017

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

Thursday, June 01, 2017

BETTER! BUT…

 

 

 

 

 

 

 

There is no doubt that the BWEI® and, therefore, the economy are moving, but in a rather unusual situation, May 2017 is a little skewed by some quarterly review and revision of the short and long term trends. Because we assign more weight to the trends than we do individual report data points, revisions here can have a seemingly dramatic effect on the Composite if there are more than the usual upgrades or downgrades in a given month. Such was the case this month. That’s good in that it means some positive trends that we just couldn’t deny any longer are developing but we should not get over excited knowing the disproportionate impact of multiple trend upgrades in a single month.

Caveats in place, let’s break it down. Real Estate took a bit of a drubbing in May 2017, dropping .17 from .31 to .14, mainly from a big drop in Construction Spending and a long-term downgrade to Existing Home Sales. The other seven reports for this category held up just fine.  For the first time since the election, Consumer measures gave a little back. This was not, however, on the backs of the direct metrics of Sentiment, Comfort, and Confidence. It was more from the indirect reports such as Vegas Strip Gaming Revenues or the Gallup ECI being less strong.

General Measures and Inflation were unchanged for the month but within Inflation, Farm Prices and the Employment Cost Index are hinting at some pressure. Good to see.

Employment, Retail, and Services all showed some gains although the bump in Retail was modest and against a very low bar after April. The improvement in Employment is certainly taken more seriously in light of today’s ADP report. Let’s hope the BLS follows suit tomorrow.

So, what’s the huge news? If you’re counting you already know it is Manufacturing! The Fed Sub Group is still ginormous and growing with some trend upgrades. But, as we’ve said, much of those are anecdotal, survey-driven reports. We need to see some movement in the hard data to validate the optimism. Well, SOME showed up last month in that three out of six current reports posted positives with a positive overall average. Folks, it’s been a long time since that’s happened! In addition, the short and long-term trends of some of the non-Fed reports, like Factory Orders, commanded their short and or long-term trends be reviewed. All this yielded a pop of .37, taking the Manufacturing composite from -.18 to +.19. That’s what vaulted the overall Composite Index to a .05 jump versus what would have been closer to a .03 advance. Both scenarios are good and leave the final reading for May 2017 at -.07, up from April’s -.12.

Blue World Jobs Report Analysis will be out tomorrow. See you back here when the calendar says July!

 

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 Thursday, June 01, 2017

Material Update – Blue World Jobs Report Analysis – 5-8-2017

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 Monday, May 08, 2017

Brain Surgery is not Rocket Science to a Brain Surgeon©

Material Update

In the April release for March 2017 we observed that the numbers just weren’t lining up among the jobs related data sets. We predicted some revisions and they showed up today in what we considered to be material enough to append this morning’s release of the Blue World jobs analysis.

As our regular readers know, the unemployment rate as published has lost its value as an indicator of labor market health. The numbers deep in the weeds need to be reviewed to get a true sense of where we are. We are not saying the labor market is “strong” by any means but we are starting to see some movement in the right direction, especially in certain down-and-out sectors like Logging and Mining as well as the apparent flattening of the Not in Labor Force graph from this morning’s release. We also had the unique situation last month where the headline was a disaster but the detail was a bit better.

All that finally showed up today in the Fed’s Labor Market Conditions Index (Chart) which looks at similar data to Blue World to form a picture worthy of monetary policy consideration. The release was delayed at the source and we have to believe it’s because they had to check their numbers because there were up revisions to the entire year 2017 to date. This is more in line with what Blue World has been seeing and, certainly, a different picture than last month.

So, with that, consider yourself updated. May we manage May well! (Yes, we hear the well- deserved boos.)

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 Monday, May 08, 2017