The Independent Market Observer

1/10/14 – Big Surprise on Weak Employment Numbers: Noise or Nail-Biting?

January 10, 2014

After all the optimism embodied in the Fed’s recent minutes, at least as I read them, the employment report this morning was a shocker. Instead of the expected 200,000 or so gain in jobs, the figure came in at 74,000, well below the lowest estimate. What the heck happened?

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12/6/13 – Ending the Year on a Good Note: Employment Up, Budget Deal Possible

December 6, 2013

Another surprisingly good economic stat came out today: Employment increased by 203,000 for November, higher than the expected 185,000. Unemployment decreased to 7 percent for the headline U-3 number, while the underemployment rate, the U-6, decreased by a full 0.6 percent to 13.2 percent.

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9/6/13 – The Employment Numbers and the Fed

September 6, 2013

I was in New York yesterday, meeting with clients and doing interviews, and the one thing everyone wanted to talk about was the employment numbers—the initial unemployment claims earlier in the week and today’s employment figures. Looking at the commentary, one paper called today’s release “probably the most scrutinized employment report in recent history.” So, now that they’re out, it seems only fair to take a look at the numbers.

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4/25/13 – Slowdown, Employment, and Corporate Profits

April 25, 2013

Several data points have come through in the past couple of days that support some thoughts I’ve had for a while. I think it’s constructive to take a look at them to determine how we can expect the economy and financial markets to evolve in the near future.

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4/8/13 – A Deeper Look at the Employment Slowdown

April 8, 2013

Unsurprisingly, last week’s disappointing employment results have generated quite a bit of discussion. The most interesting part for me has been a quantitative finding from Ned Davis Research: if you compute the actual hours worked, given the number of jobs and the increase in the average work week, it’s the equivalent of another 328,000 jobs added. Therefore, the aggregate hours worked—the actual labor input into the economy—actually rose 0.3 percent rather than declining, and the increase is pretty strong, above the 12-month average.

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1/30/13 – A Look at Unemployment Insurance Claims

January 30, 2013

Guest post from Peter Essele, CFA, senior investment research analyst

Every Thursday, the talking heads on CNBC make a big fuss about the initial claims numbers, pointing out whether they’ve moved up or down from the preceding week. Often, they eat up a good 10–15 minutes of airtime squawking over the fact that the newly released numbers are either above or below historical levels.

Although this makes for good entertainment, it does little to address the big picture. In order to draw some actual conclusions about how we look against historical norms, we’ve put together the following chart, which shows the number of initial claims for unemployment insurance divided by the total number of employed citizens. When the line moves north, it’s an indication that claims are increasing relative to the number of employed individuals. When it moves lower, it signals an improving employment picture (employment outpacing claims).

Currently, we’re at some of the lowest historical levels in terms of initial claims relative to the number of employed individuals. The prognosticators on CNBC like to compare the initial claims number with historical values in insolation, but, as the chart shows, the number of new claimants represents less than 0.3 percent of the total employment pool. In terms of employment health, this paints a pretty good picture.

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1/15/13 – Employment: Stronger Than You May Think

January 15, 2013

Following on the review of how well the housing market is doing, I thought I would take a look at employment.

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