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Blue World Economic Index® for February 2016

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Brief Explanation

Blue World Economic Index™

Released Monday, February 29, 2016 for February 2016

2 Feb Graph 2016

 

 

 

 

 

 

 

February was not a good month for the U.S. economy according to the Blue World Economic Index™ composite, which settled at -.40 which is .08  lower than January.  Of the eight major categories, six were negative including General, Employment, Inflation, Retail, Services, and Manufacturing.  Real Estate broke dead even at 0.0, with Consumer measures remaining level and positive at .2.  In spite of all that, there were a couple of late reporting bright spots that may hint at a better March.  There were some notable conflicting data sets this month with Durable Goods and Industrial Production posting unexpectedly strong gains, which lifted Manufacturing to close the month fractionally higher than January even though it had fallen sharply at mid-month.  Of the twelve Manufacturing reports the index follows, including the Regional Fed reports, they were two of only three positive readings.  Let’s hope that starts a trend.  Some authors have suggested that the Personal Income and Consumption data are in conflict between their individual readings and the GDP figures, which both posted Friday the 26th.  We have to remember, however, that the GDP report reflects the 2nd revision to Q4 2015, meaning they are lagging while the Personal Income and Outlays report is current for January 2016.  That said, the upward revision to GDP appears to be on the back of unwanted inventory build, and we’ve spent way too much time below 3%.   Personal Income and Outlays, however, did hint strongly at optimism for a better March.  Let’s hope that materializes.

Don’t miss the Blue World Jobs Report Analysis this Friday the 4th.

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release sites 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, February 29, 2016

Blue World Jobs Report Analysis 2-5-2016

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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, February 05, 2016

Brain Surgery is not Rocket Science to a Brain Surgeon©

An odd twist!  Usually we have what appears to be a respectable number at the headline and much weaker indications in the detail.  This month, and we can’t remember another, the opposite is true.  We’re not saying the underlying is stellar. In fact it’s rather flat but compared to what we expected it was a pleasant surprise.

The headline says 151k.  It’s actually 158k for the private sector, as the government shed 7k jobs in January.  There was a slight uptick in the participation rate which, while still ridiculously low, is on a 2 month “winning streak.”  The quotes are because we were deriding the number a year ago and this is .2 below that, but up is up!  The labor force was essentially even, the number of those unemployed fell slightly, as did the number of those not in the labor force so all in all we’ll call it flat.  After wincing at the headline this morning, we’ll take it.

Points of concern…

While the data was better than we expected, there is some concern over discrepancies with other reports out over the month.  We won’t go through all of it but an example is manufacturing.  The Blue World Economic Index™ was published on Monday of this week, and Manufacturing set a record low for the sector and the index at -.91.  As of this morning it sits at -.98 and nothing points to any good news there, yet today’s job report shows healthy gains in all three subdivisions, durable, non-durable, and motor vehicle parts.  Motor vehicle parts is the only one that makes any sense at all.  So there are some things that don’t necessarily line up, but that happens occasionally, and they usually come back in line.

We keep fielding questions about the Fed, and we definitely feel they are suffering from “hiker’s remorse.”  The markets are tanking, the economy is slowing, and there is a lot of talk of recession lately.  All of that said we will, of course, monitor and evaluate month by month, but right now we’re pretty comfortable thinking there will be no further hikes in 2016.  We certainly wouldn’t advise any, but they haven’t asked us…yet!

 

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, February 05, 2016

Blue World Economic Index™ for January 2016

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Brief Explanation

 

Blue World Economic Index™

Released Monday, February 01, 2016 for January 2016

January was not a very good month for the economy according to the Blue World Economic Index™ which posted its worst showing since we began publishing it publicly in 2014.

The composite index came in at -.32 with deterioration in all but two (Employment and General) major categories. Manufacturing continues to get thumped and is the most notable negative at -.91, a reading we have not seen since the inception of the index.

While there is food for both hawks and doves in the individual reports, overall we are showing an economy that was, in our opinion, not ready for the rate hike and certainly not ready for more.  There is, of course, a growing chorus of voices joining our assessment in the financial media.  Let’s hope for a better February.

Watch for the Blue World Jobs Report Analysis which will be out this Friday.

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release sites 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, February 01, 2016

Blue World Economic Index® for December 2015 and Year End Summary

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Brief Explanation

Blue World Economic Index™

Released Monday, January 04, 2016 for December 2015 and Year End Summary

“Yellen indicated that Wednesday’s rate hike was partially defensive. If rates stayed at near zero, the Fed might not have the tools to combat a recession.”

So, we guess the Fed Chair believes that in order to combat a recession we must first cause one…?

Ms. Yellen described the rate hike as “preemptive.”  Based on the data that must mean preemptive of growth!  As Blue World has been saying, the data do not support a hike…period.  That is evidenced in the economic metric output from 2015 as viewed through the prism of business managers as opposed to politicians, economists and other “experts” like the Fed Chair.

The December 2015 BWEI came in at -.23, a .024 drop from the November 2015 reading.  The average for all of 2015 was -.11 with September being the only month to break above zero.

Of the eight major categories Consumer, General, Manufacturing, Services and Retail posted small declines while Employment, Inflation and Real Estate showed fractional improvement over November 2015.

For the year 2015, Consumer measures led the way at .51 while Real Estate, Retail and Services eked out tiny positive readings leaving Employment, Inflation and Manufacturing in the negative column.  General measures logged in at 0.00.

If you have any kind of a pulse you already know the markets came out of the 2016 gate in spectacularly negative fashion and the ISM reading is in full blown contraction…but that will factor in to January 2016.

We wish everyone a safe and prosperous New Year and when you vote please remember, POLICY MATTERS!

December 2015 Graph

 

 

 

 

 

 

 

 

 

 

 

 

 

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed.  The official release sites 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, January 04, 2016

Update to the December 2015 Jobs Release – Labor Market Conditions Index

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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

Monday, December 07, 2015

Brain Surgery is not Rocket Science to a Brain Surgeon©

Important Update to the Blue World Jobs Report Analysis

When assessing the health of the labor market the Fed knows what we know…the BLS report headlines have been rendered useless.  So the Fed directed their research department to give them a better yard stick to measure the jobs market.  What they got was the Labor Market Conditions Index. 

The Fed created this index to get a better handle on the true state of the labor market.  You may wonder why they would feel the need for a new index when we have the Employment Situation Report.  The answer shows how far ahead of the curve Blue World is! This report is “unofficial,” yet gets lots of attention from the Fed because they realize what Blue World’s reports have been saying for years; the unemployment rate is artificially low!  Wouldn’t ya know that the detail the Fed research department looks at to create this index very closely matches the Blue World analysis! (High 5 us!)  They did a lot of work for nothing…they should have just been reading us!

Note from the graph that in 2012 the index was near 12, and there was no serious talk of a rate hike then.  The index has plummeted since, only recovering to about 8 in the succeeding years, and averaging only 1.4 for all of 2015 with two consecutive months below zero.  Even the highly touted, monstrous report from October with its upward revision was only able to move the index from 1.6 to 2.2.

This is why dovish Fed principals are saying it is not time for a rate hike yet.  They’re right!  The problem is that the pressure is making it harder and harder for them to resist. We hope they can hold out.

Labor Market Conditions Index 12-15

 

 

 

 

 

 

 

 

 

 

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, December 07, 2015