The jobs report was a huge miss at 124k. I predicted that it would exceed forecasts by a large amount based on employment tax deposit data from the Daily Treasury Statement. Those numbers were HUGE for March, but I guess for some reason it didn't correlate.
What I can say, however, is that the average hourly earnings increased at a pace twice as fast as the monthly increase over the past three years. So the DTS numbers at least picked that up. Remember: a rise in employment tax deposits can come from more people working, OR, people earning more money.
The only thing I can say is that the jobs report is based on surveys and that means it is a "guesstimate." I was working off hard data. The employment report is frequently revised and that may be the case for this one next month, who knows?
All I can say is that it was a big disappointment. Dollar back in downtrend now as expectations of early Fed rate hike recede.
Up until eight or so years ago these reports were simply noise. Weren't even much good for day trade scalping. However, algos seem to love noise more than ever with these first Friday of the month data points. A good bet might be to fade the initial knee jerk reaction to NFP.
ReplyDeleteIt also seems like this number was leaked yesterday. We got sharp upward moves in euro and other currencies that were not related to anything. People knew.
ReplyDeleteThere, there, there... That wasn't so good, now was it?
ReplyDeleteThis is with 70% reporting, as I understand it, though earlier figures were revised down. U6 dropped below 11%, nondurable weekly overtime picked up .1%, but manufacturing overtime was flat. Hmmm, where DID the extra taxes come from?
Mike with import prices collapsing we will probably see a lacklustre US jobs situation as US buyers will buy the imports rather than domestic...
ReplyDeleteIndeed if you look at the BLS data, we have not created ONE net job for a US born worker in over 5 years... all net gains are in foreign born ie illegal alien workers... its like human trafficking...
and the Fed wants to (to them) raise rates in this environment when we havent created a net job in over 5 years....
We have not created a job in over 5 years and yet economists have this report saying there are new jobs... so I dont know how economists brains work they are not the sharpest tools in the shed...
iow Like if we lose 300,000 jobs and create 125,000 jobs... this is NOT a good outcome for US workers...
so I dont know what economists look at here and I dont know how valuable it is to look at anything economists look at .... at all... gdp, deficit, "jobs", etc...
You get some reactionary things in the markets to these reports.... usually opportunities...
We're still basically in global austerity.... and the exporters will continue to lower prices in USD terms to try to get rid of inventories... probably US people will continue to get thrown out of their jobs...
US top-line flows are just adequate for US firms to still make decent money in this environment...
rsp,
My "sell S&P" recommendation was a good call, but for all the wrong reasons. :(
ReplyDeletehttp://www.zerohedge.com/news/2015-04-03/americans-not-labor-force-soar-record-931-million-participation-rate-drops-february-
ReplyDeleteNow that's how you create jobs!
Just my personal observation.
ReplyDeleteI think it's very much premature to accept an individual month of reported data as indicative of where things are headed.
Statistical methods aside, I suspect that Mike's intuitive reading of the treasury statement has merit, however, more research is required before any causation can be established.
Is that fair to say?
Matt, new jobs are never going to be created. And crappy jobs will keep replacing good jobs. This is why:
ReplyDelete1) The free-market religion is killing us, and the jobs ;) The free market won't create new jobs, period.
2) Automation is going to destroy 30-40% of the current job market in the next 20-40 years. AI revolution is undergoing and unstoppable.
3) Private funny money is at all time high. Bank credit, leverage and overall private debt are at all time high. Private funny money -;)- is what drives most 'growth'.
4) Economists, politicians and other useless professions still are clueless.
Neo-feudalism is slowly building up and we are not stopping it.
Neo-feudalism is slowly building up and we are not stopping it.
ReplyDeleteThe first private custom Boeing 747 is already entering service, setting a new standard for the plutocracy. This is really getting obscene.
Greenpoint Delivers the World’s First Private 747-8 Interior
ReplyDeleteMy thoughts exactly Ignacio
ReplyDeleteAsking the private sector to create more jobs is like asking a cow to lay an egg. The goal of any private business is to do the most with the least. Pretty much every guy with a business would do it all himself if he could. If he could find non human solutions to the things he currently cant do on time himself he would. He'd buy all the technology he needed and just keep his wife to do the books. He would be stupid to do it any other way if he didn't need to.
Private enterprise is about maximizing profits, public enterprise is about maximizing benefits. Public enterprise is really the only place we can just add a job aka making up something for someone to do.
There is a problem with the shortsightedness of our private sector today though. As they do more with less they are essentially firing someone else's consumers. Contrary to the belief of the RBC/Austrian guys, these people won't just go out there and create their own small business, at least not enough of them. And as their credit usage rises to finance the job replacing technology, they won't have much room to cut prices in order to offset the lack of demand from all their prior customers being fired by their boss. Most businesses are run on pretty tight margins. The cost of finance dictates to a large degree the prices they have to charge to make a profit.
As Dan Lynch pointed out in a comment on another thread, its the business sector that is running up all the debt in the current debt bubble (households are de-leveraging) and when they cant make their payments form lack of customers, we are going to see a downturn. This was Japan in the 80s, a non household sector debt bubble. We see how the neolibs have done with that!!
Im glad Im almost completely deleveraged and have a skill that won't be replaced for a while. Plus I like my work (not my job necessarily)