Consumers are the ultimate driver of an Economy, especially the US economy. By most estimates, the consumer and his/her spending makes up over 66% of the US GDP (Gross Domestic Production) a broad measure of economic health.
Here is an interesting analysis of the Bureau Of Labor Statistics (BLS) most recent monthly Employment Report … mentioned on our “Break In” of our Friday post.
Employed Consumer
The highest, most blunt view of employment is the Unemployment rate, usually figured in % total unemployed.
At 4.4%, the unemployment rate has fallen to a rate many, including ourselves thought maybe possible via post great recession!
The little Economy Engine that could!
Take this job and shove it
Confident enough to walk away from the job? Sure looks like it.
Said another way, individuals have enough confidence in finding a new job, they are not afraid to walk from their current one.
A new high soon?
Job Opening- aka JOLTS
Brought to the attention of many by our current Federal Reserve Chairwoman, Janet Yellen, the job opening report also known as JOLTS report is showing clear evidence of job opportunities.
This chart helps explain why workers are not afraid to walk from their current job as well (prior chart.)
Jobs are abundant!
Total Employment to Population
Certainly the Great Recession has had lingering effects. Focusing on the move upward since 2009, one can see the line heading in the correct direction, possibly giving confidence to those above who are leaving their current job.
Bottom line, a more confident, job opportunistic consumer economy!
Full Circle Now- Higher Spending? Higher GDP?
Going back to our original statement, with so much tailwind for the consumer coming from the employment of the US Economy, it would not be a stretch to think higher spending is in the cards, and a better GDP!
As we had mentioned earlier when an odd economic report occurred, we noted it likely inaccurate. Today the report for the most recent month was released and it looks like the two will cross each other out – we will discuss in greater detail shortly.
Somber Friday
We were stunned at the shooting here in our home town of Dallas Texas last night. Our office is not close to downtown, and thankfully our friends in that area are safe and sound as well as ourselves. Thanks to all of those who reached out to us!
We send the best wishes to the victims and the families of those who lost their lives or were injured in the shooting. So sorry this occurred!
What a different a month (or two) can make. Here is our March 2016, all new…trendy format Monthly Capital Market Review and last minute tax tips, along with a Video for your viewing and listening pleasure. Hope you are enjoying!
As Moto Moto said in Madagascar, these tips are so good we had to say them twice!
Our favorite tax savings ideas that still work for last year (2015 taxes):
Itemize your standard tax deduction
HSA- Health Savings Account
Fund an IRA
Simplified Employee Pension – SEP deduction/contribution against non W-2 income (1099)
Tax Fraud Alert
As noted here, last month we had our first incidence of fraud in February. We are now up to 9.5 so far, as we have one incident that we think was fraud, but could not be proven!
Be sure to keep your guard up!
Economic Update
PMI Manufacturing Index
PMI (Definition: The ISM manufacturing composite index indicates overall factory sector trends. The relevance of this indicator is enhanced by the fact that it is available very early in the month and is not subject to revision.) Graph from our friends at Econoday.
Less than 50 is contraction, greater than 50 is growth.
Employment Situation
While there was a small increase in unemployment claims late in March, the overall employment picture, via hiring, as can be seen below, again from our friends at Econoday, remains steady. It is worth noting, these reports can be volatile.
Capital Markets Update
Updated Support and Resistance
This Graph, included in our Newsletter, shows the updated Support and Resistance lines and levels of the current market.
As mentioned in our Yellen Speaks post, after telling capital market participants that slower rate increases were more likely (late 2015 she told the world to expect four increases, now only two) capital markets smartly broke through the lower upper resistance. Now, can we go to new highs ? Maybe …
Never go all in or all out !
Oil and Market Correlation Chart
For those that think oil does not affect the sentiment and capital markets, look at this chart from Liz Saunders :
Sorry for the motor mouth/fingers … there were a lot of moves worth noting, especially very near the end of the month !
The conspiracy theorists who wondered why a major Employment Report would be released on a market holiday (Good Friday) were rewarded with a bit of tasty news last Friday. Likely they will be out in droves today!
Weak Employment Report
With a street expectation of 247k jobs gained for the month of March a very low actual number of 126k was a surprise. Not all the news was bad, and we think this may be an aberration.
The blue line is the unemployment rate which continues to decline (good news.) Noting the last time we had a low report, orange line (August 14) a fast bounce back up to the 200k’s occurred. We think this may be the case again, as somehow energy prices and the strong dollar effects have seeped into this report.
Next months report will be even more important, but for now, unfortunately Janet Yellen, Federal Reserve Chair WILL NOT raise short-term rates if this continues.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
USA Employment Update and Consumer Analysis – NICE!
Consumers are the ultimate driver of an Economy, especially the US economy. By most estimates, the consumer and his/her spending makes up over 66% of the US GDP (Gross Domestic Production) a broad measure of economic health.
Here is an interesting analysis of the Bureau Of Labor Statistics (BLS) most recent monthly Employment Report … mentioned on our “Break In” of our Friday post.
Employed Consumer
The highest, most blunt view of employment is the Unemployment rate, usually figured in % total unemployed.
At 4.4%, the unemployment rate has fallen to a rate many, including ourselves thought maybe possible via post great recession!
Take this job and shove it
Confident enough to walk away from the job? Sure looks like it.
Said another way, individuals have enough confidence in finding a new job, they are not afraid to walk from their current one.
Job Opening- aka JOLTS
Brought to the attention of many by our current Federal Reserve Chairwoman, Janet Yellen, the job opening report also known as JOLTS report is showing clear evidence of job opportunities.
This chart helps explain why workers are not afraid to walk from their current job as well (prior chart.)
Total Employment to Population
Certainly the Great Recession has had lingering effects. Focusing on the move upward since 2009, one can see the line heading in the correct direction, possibly giving confidence to those above who are leaving their current job.
Full Circle Now- Higher Spending? Higher GDP?
Going back to our original statement, with so much tailwind for the consumer coming from the employment of the US Economy, it would not be a stretch to think higher spending is in the cards, and a better GDP!
NICE!!
Have a Great “Healthy Consumer Economy” Monday!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
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Posted in Economy, Investing/Financial Planning, Market Comments
Tagged BLS, Employment, JOLTS, Quit rate, Unemployment Rate, Unemployment Report