Blue World Jobs Report Analysis 05-06-2016

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, May 06, 2016

Brain Surgery is not Rocket Science to a Brain Surgeon©

Whoa Ugly

 

 

 

WHOA UGLY!!!                                (Full kudos if you email us with the movie)

 

The “experts” continue to baffle us… not really… Everyone is acknowledging the report is dismal, but we’ve already seen the “positives” in the report being touted by some “experts.” Well, if one only sits in a cubicle analyzing data, we suppose numbers are “positive” if above zero, but that does not necessarily translate to “positive” news on the economy for those who employ real people at real jobs for real wages in the real, outside-my-expert-cubicle world! Let’s dig in…

The headline is 160k, but the news is better for the private sector which came in 11k higher at 171k. If you wanted to leave after the good news…well…have a great weekend.  For the rest of us… Last month we reported the problem with the Private Sector counts being well below the headline and running at 195k for Q1 2016 vs. 222k for all of 2015. 222k is not stellar, but it is at least above 200k. The big news today is actually in the downward revisions to February and March 2016 of -14k and -11k, respectively, bringing the Private Sector average through April 2016 down to 183k. That just won’t get it done, folks.

The Labor Force got smaller, and the Not in Labor Force number got bigger, which ended the recent climb by the Participation Rate in spectacular fashion, which fell all the way back to 62.8%. What that means is that 37.2% of able-bodied, out-of-work Americans are not even participating in the jobs world.  That keeps the number of those not in the civilian labor force at over 94 million.

Some “experts” have said that revisions are minor. No they’re not. (See Private Sector revisions and averages above.)  Some “experts” have said that the news on wages was a positive because they are up .3% YTD and 2.6% since April of 2015.  Looks good from inside an “expert’s”  cubicle…unless, of course, one has reviewed AND remembers the Productivity and Costs report for Q1 2016 which came out a full 48 hours ago showing diminished output on higher pay driving productivity down and labor costs up. In order for wage pressure to be good news for a real manager of real people in the real world, more pay must translate to more productivity. This is why you follow us… The Labor Market Conditions Index will be out on Monday morning which the Fed follows closely. You can see our quick analysis on Twitter @BlueWorldMatt.

The Blue World Economic Index® has taken quite a hit in this first week of May 2016 falling from -.39 to -.44. A lot more data is still to come this month, so we don’t necessarily expect numbers quite that bad to hold but we are prepared to say the Fed meetings will likely be quite the yawners.

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 06, 2016

Blue World Economic Index® for April 2016

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

Release Site: www.blueworldassetmanagers.com

Friday, April 29, 2016

BWEI Graph 4-16

 

 

 

 

 

 

 

 

 

 

 

 

April started out with a little optimism as reporting from March hinted at some possible momentum, then the Empire State Manufacturing Survey kicked off the Fed district reporting at mid-month with solid positives, but it all went South in a hurry.

The BWEI® tied its lowest reading of -.39 since we started making the index available publicly in August of 2014.

Of the 8 major categories, 3 managed readings above 0 including Consumer Measures, which slipped a substantial .5 from .8 to .3.  Real Estate and Services join Consumer on the plus side of zero, and both showed fractional improvements over March. Employment, General Measures, Inflation, Manufacturing and Retail remain in decidedly negative terrain.

We don’t see the Fed making any big moves based on this data, which should make the markets happy but signal defense to those who manage real businesses and employ real people.

Look for The Blue World Jobs Report Analysis next Friday and have a great week.

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, April 29, 2016

Blue World Jobs Report Analysis 08-07-2015

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, August 07, 2015

Brain surgery is not rocket science to a brain surgeon©

The markets don’t like the headline at time of writing, and there could be a few reasons. They might perceive the headlines to be a positive for the economy (which should obviously cause the markets to fall) and think it makes a rate hike more likely. They might think it’s a negative, and therefore signaling a still weak economy. They may view it as good enough to make a rate hike likely but bad enough to signal continued weakness…ughhh. The psychology of the “experts” is an endless exercise in intellectual masturbation. For those of us running real businesses and trying to employ real people there is no indication of significant change in either direction. The labor market remains weak and our decisions must remain cautious.

The unemployment rate is unchanged at a fraudulently low 5.3%. We’ve been explaining that this is caused by a phenomenon where the number of employed people is rising much faster than the number of those entering/re-entering the civilian labor force. We’ve shown that graph over and over, but we decided to take a different approach today. We are posting a table showing the percent changes in some key metrics since January of 2011. We admit even we were startled at the results.

Before we get to that…215k net new hires are reported at the headline with touted upward revisions to May and June of 2015. A closer look shows those revisions total only +14k. The private sector, however, reports only 210k net and only +6k in revisions, the balance coming from additions to government payrolls. Average hours worked remain range bound, those not in the labor force rose nearly 150k, with increases to those marginally attached to the labor force and total discouraged workers leaving more than 97.7 million Americans out of work. The Participation Rate remains at the all-time “recovery” record low of 62.6%

A couple of positives did show up for July of 2015, including some spotty bounce-back in sector wages and a strong diffusion index in manufacturing at 57.5. Unfortunately the latter is in disagreement with most manufacturing sector data from the past year, so let’s hope it signals an uptick in other manufacturing data going forward. Follow the Blue World Economic Index™ for more information.

Below is the table we mentioned showing percent changes in a few key metrics followed by Blue World as well as the Fed as they consider monetary policy. The weakness is striking and may illustrate why the unemployment rate is so misleading even better than the graphs.

Table July 2015

The next jobs report release is scheduled for Friday, September 4th. Our written report will be out in the morning and Matt will be analyzing it live on WBBM Chicago AM780 and 105.9FM at about 12:10 Central. Look for the next Blue World Economic Index™ report on Monday, August 31st.

Have a great month, everyone.

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 07, 2015

Blue World Jobs Report Analysis 7-2-15

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.

Part Rate 6-15

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

Blue World Economic Index™

Scale: -2 to +2

Release Date:  Usually the last Business Day of Each Month

Release Site: www.blueworldassetmanagers.com

June 2015 Table

 

 

 

 

 

 

June 2015 Graph

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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