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 05, 2016

Brain Surgery is not Rocket Science to a Brain Surgeon©

This is the best report we’ve seen in a long time! Most of the highest value details moved the right direction. Not enough to improve the overall labor or economic picture, but we have to start somewhere. We’ll explain.

Net jobs were positive and the Labor Force grew. The Participation Rate ticked up a tenth, and the number of those Not in the Labor Force fell a bit. The number of those reporting as Unemployed fell while those Employed rose. Wages showed a little life, and there were some positive revisions to the last couple of months. Hours worked are still stubbornly range-bound, but we can’t win ‘em all.

So, what does it mean to business managers trying to make forward decisions?

There is already irrational exuberance in the media about this report, and neither the exuberance nor the irrationality is entirely unjustified this time. Strength is strength, and this report has plenty of it. However, the headline is 255k net new hires, but the private sector accounted for only 217k of those. That keeps the 2016 average sub 200k and well below 2015. There are still over 94 million Americans out of work as corroborated by a Participation Rate at 62.8 percent and wallowing range-bound at historic lows.

What should we be worried about?

If this report heralds a true turning point, we can count on the Fed the screw it up by raising rates too much too soon. This is now a real concern for the September meeting as the hawks are feasting on this data. Trust us on this much, this economy IS NOT in danger of overheating and does not require a restrictive rate hike. You can see more about that at the Blue World Economic Index® Lots more data will come out between now and then. We’ll be watching closely and updating along the way.

In the final analysis this report can and should supply a breath of cautious optimism, but remember, the report is just one report and doesn’t matter unto itself. We’ve seen this head fake before. What matters is the trend, and here’s to hoping this is the end of the current one and the beginning of a new one.

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 05, 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, July 08, 2016

Brain Surgery is not Rocket Science to a Brain Surgeon©

…and there was much rejoicing!

Not so fast! If we eat Robin’s minstrels the labor force will get even smaller! (Please ping us if you know the reference)

There is what the financial industry wants us to think. There is what politicians want us to think, and then there is what business managers need to know. What we need to know is this; keep the defense on the field.

Without beating the numbers into the ground let’s just say that the big up today did not even recover some key losses to last month and averages are fully uninspiring. Our headline is 287k, with the Private Sector at 265k, both respectable. The size of the Labor Force and the Total Employed are only running 1% above 2015 averages, the Participation Rate .2% and new private sector hires are 63k short of the 2015 average, continuing a down trend that started in Q4 2015.

Wages are decidedly boring and the work week is so flat it would sound like Matt trying to sing (Matt should never try to sing).

Ultimately we have a bounce back toward average today, and the average isn’t very good. These opinions are corroborated by the Blue World Economic Index® for June 2016. Will the Fed be announcing a rate hike? We think it less likely than the Finding Bigfoot team announcing success. Watch for the Labor Markets Conditions Index out on Monday, and we’ll post an update if one is needed.

Matt will be live on AM780 and 105.9FM with CBS Chicago’s Noon Business Hour at 12:09 CDT today to talk about all this stuff.

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, July 08, 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, June 03, 2016

Brain Surgery is not Rocket Science to a Brain Surgeon©

OOOOOOOOOUCH!!

When it’s bad it’s bad, and this is bad without a scintilla of positive or even hopeful news. We keep saying “policy matters.” Yesterday our esteemed President spoke of the risk of losing the “progress” we’ve made, so we suppose he feels the majority of us have no interest in returning to the days of three percent plus growth in GDP, a healthy labor market, and men being expected to use the men’s room… He did, after all, see these figures yesterday.

The headline is devastating, and the detail is worse. The unemployment rate fell because the labor force shrank in much larger magnitude (-458k) than jobs were added (+38k), thus moving the lines in the above graph closer together, giving us an artificially low unemployment rate as has been the case now for an entire administration. The numbers for the private sector are worse. There were only 25k net hires, and of the 59k in downward revisions to the two prior months 58k came off of the private sector.

The Participation Rate has erased five months’ worth of gains, The Not in Labor Force total exploded by a breath-stealing 664 thousand, and Part Time for Economic Reasons was up almost a half million.

The Blue World Economic Index® remains in negative territory with stunningly impressive correlation to the Fed’s Beige Book, which eliminated any reference to growth as “moderate,” leaving only “modest” to describe what should be the world’s greatest economy.

We have been told of seven-year long “recoveries” that aren’t. We have been directed to accept abject mediocrity. We have suffered the redefining of terms like “recession” to fit a narrative that is dishonest, inaccurate, and causes continued, direct, and real harm to those who work, those who employ, and those who invest in a sincere effort to raise standards and improve lives. The data points reviewed above and going back many years now eviscerate that narrative. Defense is still the order of the day for business. A rate hike? We think not…but ya just never know… 

Policy matters.

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, June 03, 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

Wednesday, June 1, 2016

Apologies for the delay. We experienced a connectivity failure yesterday. The numbers recounted below reflect the close of the month of May 2016 with Farm Prices, a component of the Inflation category, being the last to report on 5/31/16 at 2:00pm CDT.

Less negative is the best that can be said for the U.S. economy according to the Blue World Economic Index® for May 2016 which came in at -.32, .07 better than April ‘16’s -.39. Compared to how the month started that is a bit of a relief.

Of the eight major categories, six checked in with below zero readings which is one worse than April as Services joined the underwater group. Of the five categories previously in negative territory Employment and Manufacturing deteriorated, General Measures, Inflation, and Retail improved while Real Estate and Consumer Measures padded their plus side showings. That represents a really nice recovery for the Consumer category as the first half of the month did not look good. The biggest concerns are the continued fall in Manufacturing even in energy dependent Fed regions despite increasing oil prices and a drop to negative for Services which had been the cornerstone of strength for the index. Due to the big tallies by Real Estate and Consumers, a record-setting low was happily avoided.

We maintain “hope” is not a responsible strategy for managing any business much less the economy but considering the policies in place and those being contemplated we have no choice but to hope those month-saving numbers represent a bounce, not a blip.

Don’t miss the Blue World Jobs Report Analysis out this Friday and may your June be a profitable June. We’ll do everything we can to help!

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, May 31, 2016