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Friday, February 07, 2014 – Jobs Report Friday

Jobs Report Friday By Sinclair Noe DOW + 165 = 15,794SPX + 23 = 1797NAS + 68 = 412510 YR YLD – .03 = 2.67%OIL + 2.21 = 100.05GOLD + 9.30 = 1268.10 SILV + .07 = 20.12 The best 2 days in a row for stocks in almost 4 months. For the week the Dow was up 97 points, and the S&P 500 was up 15 points on the week. The VIX, the volatility index slipped back down to 15, indicating a general happy go lucky outlook for stocks, with just the slightest hint that the past couple of days were part of a short squeeze; especially considering the lousy nature of the unemployment report. This is Jobs Report Friday and I tend to get a bit wonkish with the numbers but I think it is important economic data, so here goes. The Labor Department reported the economy added 113,000 jobs in January while the unemployment rate dropped slightly to 6.6%. The number of jobs added fell short of expectations; analysts had projected job growth of around 185,000. While weather was believed to have weighed on hiring in December, it did not appear to be a major factor last month. There were strong gains in the weather-sensitive construction sector, and while a survey of households found 262,000 Americans were unable to work due to the weather, the department said that was in line with historical trends. This comes on the heels of an even weaker December jobs report. Today’s …

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Friday, January 10, 2014 – Jobs Report Friday

Jobs Report Friday by Sinclair Noe DOW – 7 = 16,437SPX + 4 = 1842NAS + 18 = 417410 YR YLD – .10 = 2.86%OIL + 1.23 = 92.89GOLD + 20.90 = 1248.60SILV + .63 = 20.27 Jobs report Friday. The US economy created only 74,000 net new jobs in December. The number of jobs created was the lowest in 3 years and was well short of expectations for about 195,000 jobs. In the four months before December, the average number of jobs created in the US was 214,000 a month. The Labor Department said 38,000 more jobs in November were created than the 203,000 previously reported. And the unemployment rate dropped from 7% to 6.7%. If that doesn’t seem to add up, you are correct. The headline news that the unemployment rate dropped to 6.7% is not good. The problem is that a bunch of people fell out of the labor force, 347,000, to be exact. They stopped looking for work, which made them no longer “unemployed” in the eyes of the Bureau of Labor Statistics; they just become invisible. The Labor Force Participation Rate dropped from 63% in November to 62.8% in December. This is a measure of the working age population in the labor force. The participation rate is well below the 66% to 67% range that had been considered typical over the past 20 to 30 years. The participation rate has been dropping for the past 12 years. Part of the reason for the drop in …

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Friday, December 06, 2013 – The Goldilocks Job Report

The Goldilocks Job Report by Sinclair Noe DOW + 198 = 16,020SPX + 20 = 1805NAS + 29 = 406210 YR YLD – .02 = 2.85%OIL + .27 = 97.65GOLD + 5.60 = 1231.70SILV + .11 = 19.64 Big gains on Wall Street, the best in about a month. The monthly jobs report came out this morning. It was just a little better than expected; nothing earth shattering but decent. The economy generated 203,000 net new jobs. The unemployment rate dropped to 7.0% from 7.3%. The unemployment rate is now at the lowest level since November 2008. So, this was a Goldilocks report, just good enough to indicate some strength but not so strong as to push the Federal Reserve to taper, to cut back on its monthly bond purchase program. Really, the Wall Street traders got the best possible report today. There is still a slight risk of a Fed taper in December, and we’ll talk about that more in a moment. Let’s dig into the numbers. Hiring in November was strong in most industries, including transportation and warehousing, professional occupations, manufacturing, health care, construction and retail. And there was a shift toward more well-paying jobs compared with October. The number of businesspeople and professionals who found work rose by 35,000 to lead the way. It has been the fastest-growing category over the past year. Companies that warehouse and deliver goods, meanwhile, hired 31,000 new workers; some of that gain may be seasonal. Manufacturers added 27,000 jobs, the biggest …

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Friday, November 08, 2013 – Jobs, Jobs, Jobs Friday

Jobs, Jobs, Jobs Friday by Sinclair Noe DOW + 167 = 15,761SPX + 23 = 1770NAS + 61 = 391910 YR YLD + .14 = 2.74%OIL + .13 = 94.33GOLD – 19.10 = 1289.50SILV – .17 = 21.60 Another record high close for the Dow. For the week, the Dow rose 0.9 percent, the S&P 500 was up 0.5 percent while the Nasdaq was down 0.1 percent. Today was all about jobs. The Bureau of Labor Statistics reported that total nonfarm payroll employment rose by 204,000 in October and the unemployment rate increased from 7.2% to 7.3%. The 204,000 new jobs was much better than the estimates of about 120,000. Further, the numbers from previous months were revised higher; September was revised from 148,000 new jobs to 163,000 new jobs, and August was revised from 193,000 jobs up to 238,000; for a net gain of 60,000 upwardly revised jobs. So, why did the unemployment rate move higher? Part of this may have to do with the government shutdown and there might be a reversal in the November numbers. The furloughed government workers, at least some, were likely counted as unemployed with regard to the unemployment rate, but for the total number, that 204,000 number, those furloughed workers were not counted as unemployed. The problem with the unemployment rate is that the rate can fall even when the labor market conditions get worse. There are two possible reasons why the unemployment rate drops; either more jobless people find work, or more …

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Tuesday, October 2, 2013 – Jobs, Jobs, Jobs

Jobs, Jobs, Jobs by Sinclair Noe DOW + 75 = 15,467SPX + 10 = 1754NAS + 9 = 392910 YR YLD – .10 = 2.51%OIL – 1.57 = 98.11GOLD + 24.60 – 1342.20SILV + .47 = 22.81 The Labor Department reported the economy added 148,000 net new jobs in September. The change in total nonfarm payroll employment for July was revised from +104,000 to +89,000, and the change for August was revised from +169,000 to +193,000. With these revisions, employment gains in July and August combined were 9,000 more than previously reported. The unemployment rate declined in September to 7.2% from 7.3% in August. This is the lowest level for the unemployment rate since November 2008. The Labor Force Participation Rate was unchanged in September at 63.2%. This is the percentage of the working age population in the labor force. The participation rate looks at the people who are actually in the labor pool. As the Boomer generation retires, willingly or not, they get out of the labor pool, and this is why we’ve seen the unemployment rate decline, even though the economy isn’t really doing a great job of adding jobs. There are 4.146 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 4.290 million in August. This is generally trending down, but is still very high.  Long term unemployment remains one of the key labor problems in the US. Is the Affordable Care Act causing a surge in part-time employment? Apparently not. …

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Thursday, September 19, 2013 – Shine On You Crazy Dimons

Shine On You Crazy Dimons by Sinclair Noe DOW – 40 = 15,636SPX – 3 = 1722NAS + 5 = 378910 YR YLD +.06 = 2.75%OIL + .04 = 106.43GOLD – .20 = 1366.10SILV + .13 = 23.19 No taper, despite hints and great expectations. Having announced the intention to taper, ultimately, a few weeks later, the proposal was shelved. The reasons given were concerns about the strength of the economic recovery and the impact of high rates on the ability of an over-indebted world to continue to meet its obligations. All these factors were largely unchanged between the time of the original announcement and the repudiation. What did change was the taper tantrum, the unpleasant market reaction to the hint of taper. Bond yields rose sharply; the Fed’s tough talk has already led to a 140 basis point rise in 10-year Treasury yields, which would be roughly equivalent to six rate increases; that in turn resulted in pushing mortgage rates higher, putting a crimp in the housing recovery. Today we learned home sales were up. Sales of previously owned homes unexpectedly rose in August to the highest level in more than six years as buyers rushed to lock in interest rates before they jumped even higher. The labor “participation rate” dropped to 63.2% in July, the lowest level since the late 1970s. The rate for men is at an all-time low. The unemployment rate has been falling, but chiefly because so many people are giving up hope and dropping …

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Monday, September 09, 2013 – The Problem Is We Do Get It

The Problem Is We Do Get It by Sinclair Noe DOW + 140 = 15,063SPX + 16 = 1671NAS + 46 = 370610 YR YLD – .04 = 2.90%OIL – 1.56 = 108.97GOLD – 2.30 = 1387.50SILV – .13 = 23.82 The war hasn’t started…, yet. A funny thing happened today; for a few moments the constant drumbeats for war were quieted, and there was talk of a diplomatic solution; fleeting, nothing concrete, hypothetical, could disintegrate in the flicker of a butterfly’s wing. Russia jumped on a remark by Secretary of State John Kerry, who said Syria should save itself by handing over its chemical weapons. Kerry was quick to dismiss as hypothetical his own comment that Syrian President Bashar al-Assad could avert U.S. strikes by surrendering his chemical arsenal to international control. But Assad’s ally Russia quickly turned it into a firm proposal that was “welcomed” by Damascus and echoed by the UN chief Ban Ki-moon. The White House said it was “seriously skeptical” but would take a “hard look” at the proposal. Russia’s foreign minister said he would push Assad to place Syria’s stockpile of nerve gases, blister agents and other chemical agents under UN supervision for eventual destruction. He said Russia also would push Syria to sign the Chemical Weapons Convention, the international treaty that prohibits use of poison gas. The Syrian government quickly put out a statement saying it would cooperate. Can you trust Russia to broker a peace deal? Hell no. Over the last weeks, …

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Friday, June 07, 2013 – The Ministry of Truth is Now Accepting Job Applications

The Ministry of Truth is Now Accepting Job Applications by Sinclair Noe DOW + 207 = 15,248SPX + 20 = 1643NAS + 45 = 3469 10 YR YLD + .08 = 2.16%OIL + 1.17 = 95.93GOLD – 29.10 = 1385.60SILV – .90 = 21.79 It’s the first Friday of the month and so today we start with the jobs report. The economy added 175,000 net new jobs in May. The unemployment rate moved up to 7.6% from 7.5%. I’ll explain how that works in just a moment. The March and April jobs numbers were revised slightly, and the final numbers are 12,000 less than previously reported. The headline number was slightly above expectations of 165,000 jobs added. So, another month of moderate job growth, why did the unemployment rate go up? More people jumped into the labor pool, looking for work. The participation rate increased to 63.4% in May from 63.3% in April. This is a measure of the working age population in the labor force, and historically this number is closer to 66%; some of the decline is due to people who have dropped out of the labor pool, but some of the decline is due to demographics. About 420,000 people got back into the market for a job and 319,000 found a job, but the additional 101,000 who are now in the market for a job and did not find work – that pushed the unemployment rate higher. There are still 7.9 million involuntary part time workers, basically …

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Friday, May 03, 2013 – Jobs on the First Friday in May

Jobs on the First Friday in May by Sinclair Noe DOW + 142 = 14,873SPX + 16 = 1614NAS + 38 = 337810 YR YLD + .12 = 1.75%OIL + 1.47 = 95.46GOLD + 3.30 = 1471.70SILV + .30 = 24.23 If you’ve been a regular listener over the years you know that I get a little wonkish on the first Friday of each month. That’s the day we get the monthly jobs report. I consider this to be one of the most important economic reports and so I spend a little extra time covering it. Stick around, and we’ll make you an expert. Today, the Labor Department reports there were 165,000 net jobs added to the economy in April. The unemployment rate dropped to 7.5%, down from 7.6% in March; that’s the lowest level since December 2008. The number of jobs added beat estimates of a gain of 135,000 to around 155,000. The number of new jobs created in March was revised up to 138,000 from 88,000, while February’s figure was revised up to 332,000 from 268,000.With the revision, the 332,000 jobs gained in February was the biggest monthly gain in jobs since November 2005. So, the economy created 114,000 additional jobs in March and February than initially estimated.The average for the past three months is about 211,000 jobs. It is widely estimated that the economy needs to add 250,000 over an extended period of time in order to see the unemployment rate drop below 6%. The number of …

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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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