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Blue World Jobs Report Analysis 04-01-2016

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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, April 01, 2016

Brain Surgery is not Rocket Science to a Brain Surgeon©

Part Rate 3-16

 

 

Mixed again but leaning cautionary for March of 2016.  Let’s start with the positives.  The Labor Force and Participation Rate increased, the Not in Labor Force total decreased and pay recovered from last month’s backtrack. We don’t need to keep explaining the phenomena that makes the Unemployment Rate irrelevant, but we can’t help but point out the 0.1 percent rise to 5% is actually an indication of some strength due to the upward trending Participation Rate.

On the downside the Work Week remained flat for the non-farm population but pulled back in both construction and manufacturing, whose diffusion index has lost 20 points in the first quarter falling to 37.3. That’s really bad.  The real concern, however, is hiding behind the headline of 215k net jobs.  Revisions to the first two months of the quarter so far netted a largely insignificant -1k.  The problem is in the private vs. public sectors.  March saw a net 20k in government hires, leaving the private sector picking up only 195k.  The average for 2015 was net 222k hires per month in the private sector.  Q1 of 2016 is sporting an average of only 195k.

This report typically issues on the first Friday of the month.  They will often delay for a week when the first Friday also happens to be the first of the month but not this time. Not only is it the first of the month, but it is also quarter end. Respondents, especially businesses, have higher priority internal undertakings than the timely reply to surveys.  That leads us to look for potentially larger revisions to March 2016 over the next couple of months as more complete data makes its way home.

What about the Fed? There is ammunition here for the Doves and Hawks. You can spin this one for strength or weakness, hence our actionable management intelligence characterization of “mixed.” Ultimately there is not enough here for a rate hike, and watching the Fed’s Labor Market Conditions Index on Monday will be important, although we don’t expect any huge move in either direction.  That said, we see the Fed holding pat. Apparently, so does Ms. Yellen following her dovish leanings yesterday. The Blue World Economic Index™ for March 2016 supports the doves.

Have a great month. 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, April 01, 2016

Blue World Economic Index® for March 2016

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Brief Explanation

Blue World Economic Index™

Scale: -2 to +2

Release Date:  Usually the first Business Day of Each Month

Release Site: www.blueworldassetmanagers.com

Management Value: Critical

Thursday, March 31, 2016

CmpGrp316

The BWEI posted a fractional gain of .05, improving from -.40 to -.35 for March 2016 which, obviously, only means less negative. Of the eight major sectors, six remain in negative territory.  Those include General Measures, Employment, Inflation, Retail, and Services.  There was notable improvement in Manufacturing, which interrupted its recent freefall improving .15 from -.82 to -.67. Difficulty in Retail was corroborated by the Challenger Job Cut report this morning showing the retail sector leading the way in announced mass layoffs, overtaking the energy sector for the month, but the real Retail demon in the dark has been the monthly Inventories reports showing a chilling trend in the I/S ratio. Anyone who constitutes a link anywhere in the supply chain would do well to review the most recent six to twelve releases.

The two sectors remaining positive were Consumer Measures and Real Estate. However, the Consumer total lost ground, and Real Estate remained flat at .10 after a very mixed month where five out of the nine followed reports averaged in at negative values.

What’s the Fed going to do? We say nothing. If you’re listening closely you’ll hear the word “recession” creeping into the media, but you’re not unprepared if you’ve been following us and that’s the point of our existence!

Don’t miss the Blue World Jobs Report Analysis out tomorrow morning, and Matt will be discussing it live on WBBM AM780 and 105.9FM in Chicago at 12:09CST.  Those outside of market can find the podcast at CBS Chicago later in the day.

Have a prosperous April and thanks for reading!

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, March 31, 2016

Blue World Employment Situation Analysis 03-04-2016

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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, March 04, 2016 for February 2016

Brain Surgery is not Rocket Science to a Brain Surgeon©

Not bad, and by that we mean mixed again.  There are some higher level plusses that don’t have the kind of support we’d like to see in the detail, but we promise it has been worse.

2-16 Part Rate

The headline is 242k, with 230k coming from the private sector, and the prior two months were revised higher.  The labor force posted a nice gain of 555k, and the Participation Rate, while still sub 63, notched a third straight month of improvement. Also, the Not in Labor Force total fell again.  The fact that the stats roughly balance gives us the flat unemployment rate, but we hope by now we all realize the rate is not worth considering.

On the disappointing side the work week got a little shorter, and earnings pulled back a bit.  The total of those reporting as Unemployed actually rose, and the manufacturing diffusion index fell to a contractionary 48.7%.  We were hoping for a little better considering the late, unexpected strength from the Durables and Production reports.  You can see more on that in the Blue World Economic Index™.

The general data suggest that the Labor Market Conditions Index will remain muted on Monday, and that is what the Fed puts a lot of stock in when considering policy. If we’re looking for predictions Blue World does not feel there will be enough here for another hike at this month’s meeting but, then again, we still don’t feel there was enough for the last one.

Watch for updates from us on Twitter (@BlueWorldMatt) during the month as relevant data is released and the Blue World Economic Index™ will post at the first of the month.  Have a prosperous March!

 

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, March 04, 2016

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 01-08-2016

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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, January 08, 2016

Brain Surgery is not Rocket Science to a Brain Surgeon© 

 

Stump Speech - 1-16

 

Conspiracy? No. Cynical? We’ll get back to ya.

292k net hires and 275k of them in the private sector, just where we want to see ‘em.  Not in Labor Force and total Unemployed are down, and the size of the labor force is up.  These are many of the things Blue World watches intently to take the true temperature of the labor situation, and they are all very encouraging.  Then it gets a little weird.  We have seen much smaller numbers move the Unemployment Rate very dramatically and the same for the Participation Rate.  Here we see just a .1 move for participation and the unemployment rate was unchanged.  Strange days indeed.  Wages moved backward slightly, hours were again flat, and the diffusion indexes moved in the right direction.

As usual, service providing industries were the big winners accounting for 230k of the net 275k private sector hires.  Usually we deem this area too deep in the weeds to publish, but it is worth pointing out this month because the PMI Services and ISM Non-Manufacturing surveys both reported negative results with hints at slowing hiring.  The regional Fed manufacturing reports have been in the red for quite some time.

While we are not conspiracy theorists, we are proud skeptics and even prouder cynics.  Therefore, we must include all of our observations in these analyses, because the information is just too critical to making informed management decisions.  The unfortunate truth is that the jobs and some other high-profile reports have been politicized in the last several years.  Fortunately, the shenanigans occur at the headlines, leaving the Devil safely ensconced in the details.

The majority of the data from 2015 screams economic stagnation to slowdown.  In fact, the Blue World Economic Index™ spent all but one month in negative territory, with the annual average coming in at -.11.  Without going totally wonk, suffice to say that some important information in today’s report exhibits noticeable departures from detail in other reports to a degree that is out of character.  We must also now be concerned with who is getting these jobs.  There is building evidence that a disproportionate number of illegal aliens are getting many of the new jobs, and that could have a material impact on the math applied to legal citizens counted in the reports.

Overall, we won’t look a gift horse in the mouth.  Let’s hope (we hate that word relative to business and economics) that a positive trend can take hold from these last two reports.  Will we advise clients to open the checkbook and start pushing expansion based on that hope?  No. Why not?  Because:

We just got an ill-advised rate hike which now needs some really good PR and pronto, U.S. manufacturing continues to hemorrhage, commodities are suffering a historic rout, deflation is a constant companion, the dollar is too strong, our markets are tanking, China is burning, North Korea detonated an A bomb, Iran is ignoring our nuke deal, ISIS is everywhere, Al Qaeda is staging a comeback, threats are pouring over the borders of every significant world economic power and, oh yeah, the biggest motivation to fudge, IT’S AN ELECTION YEAR.

Conspiracy? No. Cynical? ABSOLUTELY!

Have a happy, safe, and prosperous New Year and, 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, January 08, 2016