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Friday, February 01, 2013 – Jobs Report Friday

Jobs Report Friday by Sinclair Noe DOW + 149 = 14,009SPX + 15 = 1513NAS + 36 = 317910 YR YLD + .02 = 2.01%OIL + .12 = 97.61 GOLD + 3.80 = 1668.60SILV + .37 = 31.94 Today is a Jobs Report Friday. Total nonfarm payroll employment increased by 157,000 in January, and the unemployment rate inched higher to 7.9%. The headline number was below expectations, which had been running from 170,000 to 185,000 new jobs. However, employment figures for November and December were revised up sharply. November was revised from 161,000 to 247,000, a gain of 86,000; so it turns out that job growth immediately before the election was actually under-estimated; December was revised from 155,000 to 196,000, a gain of 41,000. In January, job gains occurred in retail trade, construction, health care, and wholesale trade, while employment edged down in transportation and warehousing. Exactly what this pace of job growth means for the unemployment rate depends on whether many of the workers sitting on the sidelines decide to join, or rejoin, or can find a place in the labor force. Right now, labor force participation rates, the share of people of working age who are either working or looking for jobs, is hovering around 30-year lows. Only those who are actively looking for work are counted as unemployed, so if the labor force participation stays low, even modest job growth can cause the unemployment rate to fall quite a bit. The decline in the labor force participation …

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Monday, January 28, 2013 – What’s Going On

What’s Going On by Sinclair Noe DOW – 14 = 13,881SPX – 2 = 1500NAS + 4 = 315410 YR YLD + .03 = 1.97%OIL + .69 = 96.57GOLD – 4.80 = 1655.50SILV – .34 = 30.94 This will be a big week of economic reports, including: the Federal Reserve concludes its first policy meeting of 2013 on Wednesday; the monthly jobs report on Friday (look for a gain of 165,000 jobs and the unemployment rate to hold steady at 7.8%); earnings reporting season continues according to expectations; tomorrow brings an update on fourth quarter GDP; later in the week we’ll see reports on incomes, spending, and sentiment. Today we learned orders for durable goods, the big-ticket items made in the US, increased 4.6% in December, fanned by a big batch of bookings for military and commercial aircraft. Demand also improved for most other makers of long-lasting goods, suggesting that US manufacturers could be poised for a modest rebound in 2013. Then Caterpillar issued a less than bright outlook for 2013, which put a damper on the sector. Toyota Motors retook the title of world’s largest auto maker, posting a 23% gain in global sales to a record 9.75 million vehicles in 2012. General Motors moved to second place in global sales at 9.29 million; Volkswagen was in third place with 9.07 million sales. The National Association of Realtors reports pending home sales fell 4.3% in December, with low inventory cutting results. The trade group’s pending-home-sales index declined to 101.7 …

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Friday, December 7, 2012 – A Date Which Will Live in Infamy, Plus the Jobs Report

A Date Which Will Live in Infamy, Plus the Jobs Report by Sinclair Noe DOW + 81 = 13,155SPX + 4 = 1418 NAS – 11 = 297810 YR YLD +.05 = 1.63%OIL – .27 = 85.99 GOLD + 4.50 = 1704.50SILV + .08 = 33.11 Today marks the 71st anniversary of the attack on Pearl Harbor. There were of course, memorials in Hawaii and around the country. I’ve seen a few of the pictures. Each year the number of Pearl Harbor survivors that attend these memorials, their number grows smaller and their ranks thin. If you know a veteran of World War II, be sure to take time to recognize their stories, be sure to say thanks. Today’s major economic data was the monthly jobs report; widely expected to be weak due to the effects of Hurricane Sandy. Instead, it came in relatively strong. The headline numbers: the economy added 146,000 jobs in November, and the unemployment rate dropped to 7.7%, a four year low. The Labor Department claimed that the effect of Sandy on the report was minimal, saying in a statement, “Our analysis suggests that Hurricane Sandy did not substantively impact the national employment and unemployment estimates for November.” In other words, we should not look at this report as surprisingly good given the effect of the hurricane. Rather, the Labor Department claims that the jobs numbers should be analyzed without taking the storm into account at all. And by that standard, not only were the job …

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Friday, November 2, 2012 – Jobs, Jobs, and More Jobs

Jobs, Jobs, and More Jobsby Sinclair Noe 11022012 Script DOW – 139 = 13,093SPX – 13 = 1414NAS – 37 = 298210 YR YLD +.01 = 1.73% OIL – 1.98 = 87.58GOLD – 38.10 = 1677.90SILV – 1.35 = 31.01 The big economic news of the day is the October jobs report. The Labor Department says the economy added 171,000 jobs last month, and they revised prior months to show even more job gains. The unemployment rate rose to 7.9%, as more people entered the labor pool. Some 578,000 people entered the labor force in September, according to the household survey, with 410,000 saying they found work. The discrepancy led to the slight uptick in the unemployment rate. The professional-services sector created 51,000 jobs, health care added 31,000, retail gained 36,000 and leisure and hospitality companies hired 28,000 workers, manufacturers added 13,000 jobs after shedding workers in the prior two months. Altogether, the private sector added 184,000 jobs, with government subtracting 13,000 from the final total. Any jump in jobs is good for housing. While overall construction added 17,000 jobs in September, residential-building construction employment fell by 2,000. Residential specialty contractor jobs increased by 6,700, which speaks to the real root of today’s housing recovery. All-cash investors are leading the gains; they buy distressed properties and then repair and remodel them to turn them into rentals. It’s no wonder remodelers are seeing greater gains than the home builders. Companies also hired more employees in September and August than previously estimated. …

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A Raft of Reports by Sinclair Noe DOW + 136 = 13,232SPX + 15 = 1427NAS + 42 = 302010 YR YLD +.03 = 1.71%OIL +.65 = 88.48GOLD – 5.20 = 1716.00SILV un = 32.26 We have a drove of economic data to cover today; a mass of intelligence; a flock of facts; a legion of lowdowns; a swarm of information; and we’ll sort through the stories and try to make sense of it all. Of course, tomorrow we’ll get the big report on the monthly jobs picture for October. Friday’s jobs report is expected to show non-farm employers added just 125,000 jobs last month – not enough to prevent the jobless rate from rising a tenth of a point to 7.9 percent. The unemployment rate fell to a near four-year low in September at 7.8%. Today, we heard some hints about tomorrow’s non-farm labor report. Automatic Data Processing, the payroll processor, always releases their report prior to the government’s report. The ADP report is not a particularly good indicator of the BLS report. ADP shows private employers added 158,000 workers last month. There is some evidence of labor market improvement. It is not totally convincing yet but overall the message is positive. Weekly initial unemployment claims declined to 363,000 for the week ending October 27, down 9,000 from the previous week. Unemployment claims topped out over 650,000 back in the first quarter of 2009 and have been moving mostly sideways this year, but are near the cycle bottom. Don’t …

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Friday, October, 5, 2012 – Slow, Steady, Weak, Uncooked Growth in Jobs Report

Slow, Steady, Weak, Uncooked Growth in Jobs Report by Sinclair Noe DOW + 34 = 13,610SPX -0.47 = 1460NAS – 13 = 3136 10 YR YLD +.07 = 1.73%OIL – 1.79 = 89.92GOLD – 9.00 = 1782.30 SILV – .46 = 34.61PLAT – 13.00 = 1710.00 The first Friday of each month brings the jobs report and it is always important economic data. This is the first Friday in October, in an election year; so, it is really big news. We’ve discussed at great length that the jobs report is imperfect; even after revisions, the report is imperfect. Still, the report provides a manner of comparison, and it is the best we have. It provides an apples to apples comparison. The economy added 114,000 jobs in September. The unemployment rate fell to 7.8% from 8.1% The unemployment rate is the lowest since 2009, and the first time the rate has dropped under 8% during the Obama administration. The private sector has now added jobs for 31 consecutive months. Still, 114,000 new jobs would have to be considered weak growth. The best guesses are that the economy would have to generate at least 250,000 jobs each month for several years to reduce unemployment to around 6%. So, the first question is why did the unemployment rate drop when the number of new jobs was only showing weak growth? The Labor Department revised employment figures for August and July to show somewhat faster job growth in late summer, mostly because of government …

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Thursday, October 4, 2012 – If I Didn’t Hear It, Did It Happen?

If I Didn’t Hear It, Did It Happen? By Sinclair Noe DOW + 80 = 13,573SPX + 10 = 1461NAS + 14 = 314910 YR YLD +.04 = 1.66%OIL + 3.47 = 91.61GOLD + 11.30 = 1791.30SILV + .33 = 35.07PLAT + 31.00 = 1725.00 Initial claims for state unemployment benefits climbed 4,000 last week to a seasonally adjusted 367,000, the Labor Department. But that followed a drop of 22,000 and a four-week average, which offers a view of trends, held steady at 375,000. The monthly jobs report is tomorrow morning. Today, the Federal Reserve released the minutes of the FOMC’s September 13meeting. Of course, we know the Fed launched QE to Infinity and Beyond, or at least $40 billion dollars a month in mortgage-backed securities, until such time as we see maximum employment or until inflation becomes a problem. From the meeting minutes we learn that there might be limits on QE. The report says: “Most participants agreed that the use of numerical thresholds could be useful in providing more clarity about the conditionality of the forward guidance but thought that further work would be needed to address the related communications challenges.” In other words, there might be limits to acceptable unemployment. Maybe 7%, maybe 5%? We don’t know. And there might be limits to acceptable inflation. Maybe 2%, maybe 3%? We don’t know. We would like to know. If we knew, we could bet on the numbers. Unemployment at 8.2% and inflation at 1.5% equals risk on. Unemployment …

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Monday, October 1, 2012 – Ghosts in the Machine

Ghosts in the Machine by Sinclair Noe DOW + 77 = 13,515SPX + 3 = 1444NAS – 2 = 311310 YR YLD – .01 = 1.62%OIL – .02 = 92.46GOLD + 4.10 = 1776.20SILV +.16 = 34.75PLAT + 16.00 = 1685.00 You can watch the Presidential Debate this Wednesday but if you’re looking for clues about who will live at 1600 Pennsylvania Avenue over the next four years, the thing to watch is the Non-Farm Payroll Report from the Bureau of Labor Statistics on Friday morning. It’s all about jobs. In August, the report show the economy added 96,000 jobs. The September report needs to show that the economy added even more; it needs to show we’re moving in the right direction, not slipping back. The unemployment rate is currently at 8.1%. That’s a lousy number but at least it has been heading in the right direction. Of course, a major reason the unemployment rate has been falling is because people have dropped out of the workforce; they are no longer actively looking for a job and so they no longer get counted; that’s been the methodology for quite some time now; these are people who are not working but they aren’t considered unemployed. They have become ghosts in the machine. Now, there is a big difference between the 800,000 jobs lost in the last month of the Bush administration and the 96,000 jobs gained last month under the Obama administration, but the reality is that 96k jobs is just …

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Friday, September 7, 2012 – More Than You Want to Know About the Jobs Report

More Than You Want to Know About the Jobs Report By Sinclair Noe DOW + 14 = 13,306SPX + 5 = 1437NAS + 0.61 = 313610 YR YLD – .01 = 1.66%OIL +.89 = 96.42GOLD + 34.00 = 1736.30SILV + .97 = 33.78PLAT + 10.00 = 1597.00 The first Friday of each month the Bureau of Labor Statistics reports on nonfarm payrolls for the previous month. While that sounds rather mundane, the jobs report is a pretty big deal. The results attempt to measure some of the most vital data about the economy; who’s working and where and how much are they being paid; from this we can estimate how much people will or will not spend, the strength or weakness of businesses, the overall health of the economy. The fates of Presidents and political parties can hang on the results. The Federal Reserve will use the report to determine if they will turn on the printing press. This in turn affects the prices we pay for almost everything. So, it’s a pretty big deal. The economy added 96,000 jobs in August, far below the consensus of 125,000 to 150,000. In addition, July’s tally was revised down to 141,000 from 163,000. The unemployment rate unexpectedly fell to 8.1% from 8.3% and the “real” unemployment rate (U6) fell to 14.7% from 15%, but the unemployment rate came down for the wrong reason; a sharp drop in the size of the labor force. The labor participation rate fell to 65.3%, its lowest …

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Friday, July 6, 2012 – That’s Just the Way It Is

That’s Just The Way It Isby Sinclair NoeDOW – 124 = 12,772SPX – 12 = 1354NAS – 38 = 293710 YR YLD -.05 = 1.54%OIL – 3.10 = 84.12GOLD – 21.50 = 1583.40SILV -.60 = 27.20PLAT – 28.00 = 1451.00We make a big deal out of the monthly employment outlook report.  It is a natural mistake. We think the report can tell us whether the economy is improving and, if so, by how much. Employment is fundamental for consumption, corporate profits, tax revenues, deficit reduction, and financial markets. People place too much emphasis on the official report, which is really only an estimate; there will be revision.  In about eight months, we’ll have an accurate count from state employment offices, but by then no one will care. There are several approaches to analyzing employment. And then there are seasonal factors. And you will be told there are different numbers that require your attention. And when you cut through all the noise and confusion, the monthly jobs report for June was a gain of 80,000 – and it just plain and simple sucked. The Labor Department said non-farm payrolls expanded by just 80,000 jobs in June, marking the third straight month employment has grown by fewer than 100,000 positions. Job creation was too weak to bring down the 8.2 percent unemployment rate. Job creation averaged 75,000 per month during the second quarter, compared with an average increase of 226,000 in the first quarter. Economists estimate that roughly 125,000 jobs are needed each …

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