Nice bounce in the markets yesterday, perhaps because there has been some evidence that the end of the world isn’t here yet…and we may just muddle through this mess, after all. Latest grist is in this morning’s jobs report just out:
“Total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, in professional and technical services, and in health care.
Household Survey Data
The unemployment rate edged down in August to 8.1 percent. Since the beginning of this year, the rate has held in a narrow range of 8.1 to 8.3 percent. The number of unemployed persons, at 12.5 million, was little changed in August. (See table A-1.) Among the major worker groups, the unemployment rates for adult men (7.6 percent), adult women (7.3 percent), teenagers (24.6 percent), whites (7.2 percent), blacks (14.1 percent), and Hispanics (10.2 percent) showed little or no change in August. The jobless rate for Asians was 5.9 percent (not seasonally adjusted), little changed from a year earlier. ”
Our investment model (over on the Peoplenomics site), based on an aggregation of US markets has been bullish/long for weeks now and, talking to Robin Landry yesterday, there’s a chance the market could sail through the S&P 1,450 level and should that happen, then a high around 1,600 comes into view.
Of course, as he noted in our chat, that means there would likely be lots of inflation about…which would raise interest rates, but might lay some huge increases on gold and silver prices, plus energy and a lot more. Might even ignite some housing investment if people think the bottom is really in.
But more on that tomorrow (with his chart) for Peoplenomics readers. This morning’s third cuppa will involve sorting out the real truth of the job numbers.
First, there’s the matter of the labor force size. In this morning’s report…two things to notice. First is that the workforce available to work dropped 368,000...so how jobs gain is well…magical.
This, in turn leads to the labor participation rate…how many are really working out of the labor force number. Amazingly…even with the 368,000 dropped from the labor pool, the participation fell 2-10ths to 63.5%. A year ago that was 64.1%. If you drop the labor force, the employment rate goes up but it doesn’t mean there’s any more total jobs out there…since in the latest month the absolute number of job-holders was DOWN 119,000 from the previous month and that’s before questioning our next statistic.
That’s the little matter of the CES Birth/Death model which is used to “estimate” jobs into existence. And you’ve got to be careful with this because when someone signs up for a “get rich quick” scheme, they’re likely to consider themselves “employed” even if they’re still losing money…lots of wiggle-room in how this data is put together.
In this morning’s report, 87,000 jobs were estimated into being. Business services, leisure & hospitality, and trade transportation and utilities were big winners.
And last, but not least, we have the U-6 alternative measures of labor under-utilization – which is the PhD’s flipping burgers which means lots of people have student loans which won’t get paid…but let’s not go there. Just consider this morning’s number which is: 14.7% which I’ll grant you is better than last month’s reported 15%.
If I were guessing? Yesterday’s market run was “buy the rumor” and it should be followed by “sell the news”. But as Landry figures it….the size of the next pullback ought to clarify the Big Picture.
A nice campaign contribution – in kind – from the ECB which will continue buying US bonds...at least till elections. I seem to remember that Ures truly had predicted that in return for the US supporting the banko Euro club, that we’d get payback in kind…so here it comes.
New word: Polivangelism
Which means what? Like televangelism, but in politics. Example: the speech by Jennifer Granholm at the DNC. (Surprisingly, the DNC picked B H Obama to run again and he equally surprisingly, accepted.)
Main difference between political parties and religions is what they want in the collection plate. The parties want money and your vote. And as I’ve explained, tithing is suggested. Taxes are at gunpoint. Fiery rhetoric is similar as evidenced by Granholm who I didn’t hear say “Gimme an A-MEN!” or “Hallelujah!” Close, though. Gimme a bailout and “Saved Jobs!” is functionally nearby.
Like megavangelists, the polivangelists ride around in Gulfstreams and offer to lead…for a price and are periodically tripped up failing to walk their talk.
I’m firmly in the “None of the Above” camp for the election….which is the fastest growing party in American today, near as I can tell.
NYPD Office – In Israel
Say, this is an eye-opening development: “NYPD Opens Branch in Israel” says this report. Wonders reader bill “Are we seeing the start of an international police force?” You mean like a second one after Interpol? Maybe….. Who knew they had about “a dozen international outposts”?
Meantime, showing how politicians really are averse to other opinions, the “DNC chairman declares Jerusalem the capital of Israel despite delegates’ disapproval…“ The US maintains offices both in Tel Aviv and Jerusalem but is carefully non-committal. This predates Obama….same problem for past presidents.
Outside a mosque in Damascus this morning…many dead.
At least 50 dead in southwest China where a 5.6 quake struck overnight…main thing was it was a shallow quake and these are known for causing more damage than deeper quakes.
New Toys Dept.
Kindle has finally released their high-def units. On the low end ($199) is the Kindle Fire HD 7″, Dolby Audio, Dual-Band Wi-Fi, 16 GB whereas if you’re rolling in bank, try on the $499 Kindle Fire HD 8.9″ 4G LTE Wireless, Dolby Audio, Dual-Band Wi-Fi, 32 GB.
In the middle (still 8.9″) is the Kindle Fire HD 8.9″, Dolby Audio, Dual-Band Wi-Fi, 16 GB at $299.
Hard personal decision I’m pondering (since I’ve already got the Kindle Fire (non-HD) is whether to sit on my wallet….which what I will likely do. Still…3 1/2 months till the other fat guy shows up…
Scientifically: “So What?”
OK, so there’s another indication there may at one time have been water on Mars. What do we do now (as a planet) learning this multi-billion dollar bit of news…open a car was?
Not meaning to be a curmudgeonly Luddite, because I’m sure there is a point to space travel besides marketing Tang and developing freeze-dried foods and fancy new plastics…but damned if I can put it into words.
Speaking of throwing money as space…this press release caught my eye:
” General Dynamics SATCOM Technologies is partnering with Stratosat Datacom (Pty) Ltd. to supply 64 radio-telescope antennas, ancillary electronic components and support for South Africa’s MeerKAT radio telescope program.
The Stratosat/General Dynamics SATCOM consortium will perform a minimum of 75 percent of the work on the 632 million rand ($75 million) contract in South Africa to maximize the skill development and involvement of its local industry, including the qualification testing, tooling design and virtually all of the manufacturing.”
So here goes yet another big look at the southern sky. Odd…or just less pollution….OR….
More after this…