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Blue World Jobs Report Analysis 05-06-2016

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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, 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

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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 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 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 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