MARKET CURRENTS
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- Friday, February 3, 8:30 AM Jan. Nonfarm Payrolls: +243K vs. consensus of +125K, +203K (revised) in Dec. Unemployment 8.3% vs 8.5% expected. Avg. hourly earnings +0.2%. to $23.29. Workweek unchanged at 34.5.
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This news story has 46 comments:
http://bit.ly/yu28Cu
http://bit.ly/wd8dbb
More people vanished from the workforce...1.2 million from Dec 2011 to Jan 2012.
I'm not saying jobs weren't created….but the workforce degradation is still (over +10 yrs) faster than job creation. Absolutely people can make money in equities at the moment and the market should continue to rise (especially with the Fed still monetizing the debt..20-30yr UST's of which the Fed has purchased over 90%), but eventually this situation will cause quite a massive problem.
That would include me.
So what the hell does the FED see in the future that is making them so cautious?
This does not make sense.
Employed went from 140.68 million to 139.94 million M/M.
Not In Labor Force went from 87.21 million to 88.78 Million M/M…Y/Y was an over 2.6 million increase.
The denominator is eroding as it has been for the last +10 yrs..
Does that mean the actual number of people counted as having a "job" has gone down?
Don't these people need the money?
http://bit.ly/sBiT0v
http://bit.ly/AEKlGf
What PR does not account for is the 65+ working part time (trending higher) or in consultant work and the home based businesses that have exploded since 2005. I don't think the standard way we collect this metric reflects these changes in employment population. The household survey attempts to collect this data, but the number of data points is still too small.
Not sure why you harp on information that is of little value.
The Thursday number is THE NUMBER TO LOOK AT. That is telling you what is really happening. Focus there.
The NFP is useful and this is a good report - all the way around. But it does not become important for another 6 months.
Unemployment rate and all the other garbage you and many others are obsessed with right now are not useful for investment purposes at the moment.
Unemployment and participation are important later to identify a hot market. When these numbers are good. When they are strong. They tell you the time to get out.
At the moment - they just don't matter. And the market must go highre as growth is here and profits are good.
E
Civilian workforce population:
http://bit.ly/yo5uze
Average weeks unemployed:
http://bit.ly/wug2Fy
Civ Participation rate:
http://bit.ly/yu28Cu
I'm not saying jobs aren't being created. But even with slower population growth and higher number of people retiring (retirees aren't counted in the above graphs) we should see a reversal in the participation rate..instead it still declines. It means the number of work age people not working is growing faster than jobs. This has numerous implications, from strains on social systems and continued debt growth, to those working having to support an increasing population of those who aren't. The other item not well covered are how good are the jobs? Are they living wage, or low wage that still requires state/federal assistance?
Those people dropping out of the workforce are more than likely getting paid under the table.
The biggest success of this administration and Congress is the expansion of the grey market economy which explains the jump in retail sales while personal income and employment are flat.
And, that's one major reason why those making investment decisions based on a dissection official employment data, rather than corporate results, have mostly made the wrong ones.
The Fed, Bernanke, is just being circumspect, like a good, cautious politician. He gains nothing by trumpeting wildly optimistic projections, and he'd immediately undermine the low-interest rate plan that he keeps promoting. Besides that, does anybody think Bernanke is the rah-rah cheerleader type?
From an investor's perspective, I'd rather see the markets digest actual data and move accordingly than get all excited by verbiage and get overheated and more volatile.
The longer people ignore data and try to ascertain hidden agendas and conspiracies in words and punditry, the further from economic reality they are going to stray, and, ergo, the worse will be their investment decisions.
The Fed sees an upcoming drop in Federal spending, fallout from Europe, and tight credit in Asia from European banks not funding global trade.
http://read.bi/wtmzxY
Also revisions added 60K more jobs for December.
How many of these "new jobs" pay @ the minimum wage with ZERO benefits?
Can you imagine the selloff if this all turns out to be a headfake?
I feel so conflicted. Oh man, you just gotta believe but I don't wanna!
Good luck bulls.
Big difference.
How does 240K jobs equal .2 of the whole US labor force??
This economic report is exactly why there is going to be a massive correction in the future.
It is the tool of bubble blowers. Good headline numbers with insanely horrible fundamentals.
Great for getting a fresh crop of bagholders in at the top.
Linked from a Wash, DC source.
Here is an important fact: Despite a population increase…
People working in Jan. 2009 – 142,099,000
People working in Jan. 2012 – 141,637,000
It is so bizarre in the pure numbers sense - the unemployment rate keeps falling with fewer people working overall with an increasing population. I guess people who used to work for a living don't want to anymore. Even the CBO report acknowledged the disconnect this week.
What happened to U6?
This chart from HedgeEye is really eye-opening (pun unintentional).
http://bit.ly/yOPw2v
That's a bizarre graphic for a strong economic recovery.
Participation rate for those 25 and older with a bachelors or higher, has been declining since records have been kept (1992).
http://bit.ly/xwW6Uo
But those with no HS education or lower has been rather stable for the last 7 yrs. (growing since mid 90's).
http://bit.ly/wZBr69
HS diploma, AS degree all have a similar down trend as Bachelors and higher. The 16-19 yr old age group has been below historic low levels for years so it isn't worth mentioning.
All of this will eventually play out in 1-2 qtrs when companies report earnings. You will see near record numbers of warnings, misses, and lowered guidance. However, FOR NOW, the market loves it's crack cocaine, and it's all bullish... up, up, and away! Personally, I would only sit in cash and/or selectively swing trade this market, because the top is only 5-10% away, whereas the bottom is 50%+.
Sadly I am still in your camp but I feel so lonely here. I need a hug!
Or a nice stiff drink.
BLS - "Bulls**t, Lies, & Statistics"
"Veterans who do not begin civilian employment immediately after leaving military service may receive weekly unemployment compensation for a limited time. The amount and duration of payments are determined by individual states. Apply by contacting the nearest state employment office listed in your local telephone directory."
If you want to know how badly the numbers can be skewed, got to the Dept. Of Labor web site and see how they determine job creation and unemployment. Rather than "job creation" a more accurate term would be "statistics creation."
In any event, the number for January doesn't mean much when you consider the fact that 150,000 new people enter the job market for the first time every month.