Friday, September 3, 2010

Employment Situation Summary 9-3-10

Employment Situation Summary
Release Date: Usually the first Friday of each month
Release Site:
Market Sensitivity: VERY HIGH
Management Value: VERY HIGH

Friday, September 03, 2010

We write these analysis reports to offer real investors and business leaders actionable intelligence well beyond the spin we get from media headlines, economy experts and market gurus. If we are in the business of combating absurdity, business is good!

The employment report, again, requires little analysis as the picture has not improved. That was predictable based on the balance of data and general mood of consumers and employers. The "experts" were surprised, as usual. This time it wasn't as bad as they thought it would be. So, a rise to 9.6% is reason for optimism this month. WOW.

We continue to be amused/baffled by the media reports. When the rate goes up that is, somehow, good news and when the rate goes down it is an ominous sign. Let's get to some actual numbers that mean something.

In a service based economy the percentage of unemployed workers with a minimum four year college degree is a bellwether indicator of the trend, health and sustainability of the economy at large. These are the people most likely to spend on durable goods, homes and big ticket luxury items, so it is one of our go-to stats when evaluating the state of the job market and economy as a whole. This group continues to be out of work at rates never seen since the stat has been tracked and the rate has risen .1% per month since May to the current level of 4.6%. That's bad.

The total for un/under/discouraged/gave up (Table A-15, U-6) is up .2% this month over last to 16.7%.

Total private, non-farm (Table B) added 67,000 paychecks. That is less than a third of what we need to break even on new entrants at this point.

The number of part-timers for economic reasons, i.e. slack work or could only find part time work, is up substantially.

Ultimately, there is no improvement in the job market which is a clear indicator of the direction of the economy and prognosticates poor fortunes for US business.

Use those stops in the market, puts are better if you know how. Make sure your private equity plays are diligenced by a crack team. Build in as many safety nets as you can. Triple verify real estate cash flows if you can't afford to carry a property out-of-pocket. There are plenty of opportunities but the defense has to be ready to play!

Every effort is made to ensure accuracy of data transcription but accuracy cannot be guaranteed. The official release site should be cross referenced. The analysis represents the opinion of Blue World Asset Managers, Ltd. who does not warrant or guarantee predictions based on its analysis.