A short wrap up to the employment situation from NFTRH 385…
Hourly wages eased and this, along with the quality (or lack thereof) of jobs created has given the bears reason to announce why this was a bogus report. At nftrh.com we also continued the ongoing caveat that it is an economic ‘back end’ job creation story, with services carrying the day. I don’t believe that is healthy long-term, but as we found out in the late 90’s, the condition can persist a long while before the shit hits the fan. Ref. Employment by Industry. Here is a monthly view from BLS…
‘Back end’ or not, various services sectors are still cranking along, in many cases employing people in jobs that will vaporize as soon as the economy begins to crack beyond the fissures already visible in manufacturing, energy and mining.
This has been a Goldilocks phase reminiscent of the great bull market that had its blow off in the late 1990’s. Back then “King Dollar” pulled capital into the US, industries were out-sourced, the handlers of money got richer, the masses remained employed and those who made things and mined things were under pressure.
As you may know, back then I was in the “made things” category and my company did just fine. But there was a lot of work and some luck involved. I can’t imagine it was as hard for the average financial services professional to stay afloat back then as it was the average US manufacturer. I did learn during that time that a racket without sound underpinnings can operate indefinitely… until one day, it doesn’t.
Backing away from the ideological stuff, let’s just note that in both 2000 and 2007 the unemployment rate began to turn up before a recession hit.
Thus far? It’s not happening. Now, data detectives may don the Tin Foil hats and find reasons why the government is fudging the numbers, but we need to play it straight here if we want the analysis to be in line with what the market believes, not what some sleuth in a shiny hat believes. I would bet the government was every bit as loose with numbers 16 and 8 years ago as it is today.
So far, the employment picture on balance is holding up. Now, where does the trend bottom out? It sure does look close if it is going to make a ‘higher low’.
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