Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17
Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat - 9th Aug 17
Why Is The Stock Market Not Trading On Fundamentals Lately? - 9th Aug 17
USD/CAD - Can We Trust This Breakout? - 9th Aug 17
New Monthly Rebate to Help Reduce Your Trading Costs - 9th Aug 17
Stock Market Divergences Are Now Appearing! - 9th Aug 17
Is Inflation an issue or did the Fed Mess Up? - 8th Aug 17
Top 3 Technical Trading Tools Part 1: Japanese Candlesticks - 8th Aug 17
Researchers Find $10 Billion Hidden Treasure In A Dead Volcano - 8th Aug 17
What Happened to Thousands of Sheffield's Street Trees 2017 - Fellings Documentary - 8th Aug 17
Solar, Bubble, Banks, War, and Legal Tender: Five Reasons Why You Should Buy Silver Now - 7th Aug 17
CRASH - If Some People Do It, Nothing Bad Happens, But If Everyone Does It, All Hell Breaks Loose - 7th Aug 17
Gold and Silver : The Battle for Control - 7th Aug 17
Precious Metals Sector is on Major Buy Signal - 7th Aug 17
Stock Market - Has Time Run Out? - 7th Aug 17
Get Ready for an Historic Upside Gold and Silver Run - 7th Aug 17
BOOM! Bitcoin Rockets To New All-Time High As Cryptocurrencies Surge Higher! - 7th Aug 17
U.S. Dollar: This Crash Signals the End - 6th Aug 17
Predicting The Price Of Gold Is A Fool’s Game - 6th Aug 17
Asda Sales Collapse and Profits Crash! UK Retailer Sector Crisis 2017 - 6th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

The U.S. Economy, Post-Payrolls & Pre-FOMC

Economics / US Economy Mar 13, 2017 - 06:07 AM GMT

By: Gary_Tanashian

Economics

This week’s Notes From the Rabbit Hole included a little Payrolls/Wages related economic discussion before moving on to the usual coverage of stock markets, commodities, precious metals, bonds, currencies and related indicators and market internals.  With FOMC on tap there will be more data noise directly ahead, but then I expect markets to smooth out into what is looking like a sensible short and intermediate-term plan.


U.S. Economy

Graphic sources:  St. Louis Fed, BLS, TradingEconomics, Macrotrends & Bespoke Premium

So Payrolls came in a little firmer than expected and interestingly, the manufacturing sectors did some solid hiring. This is an area that is sensitive to coming fiscal policy because it is subject to regulations likely to be repealed (especially environmental, a real fundamental underpinning) and high paying jobs repatriation to U.S. shores (a phony baloney fundamental, at least in large part, in my opinion). In this graph we see that manufacturing job losses had been easing into the election, but job gains have ramped up after the election. All of this on anticipated policy changes?

Manufacturing jobs pay above the average of all industries, but the highest pay rates will go to those programming and maintaining automated systems, including robotics.

As an aside to the BLS graphic above, look at the red dot languishing down there in the lowest paid quadrant for job gainers. Leisure & Hospitality has consistently been an employment driver as we’ve noted the great consumer economy “servicing itself” month after month as each Payrolls report is released.

Who do you think is filling that ongoing and consistent need for workers to clean hotel rooms, clean restrooms, bus tables and wash dishes? Well, it is not dear old Hazel of yore, that much I can tell you. So who is going to fill those low-wage jobs that the average American may perceive to be beneath them, going forward?

In case you missed it posted at nftrh.com, here is the monthly breakdown by industry.

The average hourly earnings of U.S. employees, is at $26.09/hr.

Here is the spread between hourly earnings and the Consumer Price Index. The only time the consumer caught a break was during the crash of ’08.

And here is the ‘Consumer Comfort’ index spiking to new highs. We have a forward looking consumer sentiment indicator telling us that things are going to get better, but hard data (wages & CPI) of today telling us that they have not yet gotten better. The consumer is all-in, Donald. He believes you and is depending on you!

NFP in its firming trend since the election…

But as implied by the sideways shorter-term view above, the long-term trend is just rolling along, as it normally does during an economic “recovery” *.

* At some point could we maybe stop calling it a recovery and start calling it a mature economic expansion, to the extent it has already expanded? The mature economy’s 2% growth is the reality that the Trump administration will try to improve upon with ‘fiscal’ stimulation. But the only tools left in the bag may be inflation and debt.

Here is the GDP growth rate…

…and here is the long-term debt-to-GDP. Notice that the Reagan-era deficit spend lasted his entire term through Bush 1’s term. Then came a really positive phase in the U.S. economy as deficits came down, stocks bulled and the economy roared. Folks, I’m no fan of Bill Clinton, but the facts are the facts. Many compare the Trump administration to the Reagan administration. If they remain alike, the debt will continue to expand, despite what Trump tweets to the contrary.

At which point NFTRH 438 took off its junior econo-geek hat and proceeded to the main focus, which is as always, the world of asset markets and the tools that provide probabilities related to them.  We’ve got some interesting short and intermediate-term plans cooking that could disturb bullish and bearish herds at varying times going forward.

Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates (including Key ETF charts) and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com

By Gary Tanashian

http://biiwii.com

© 2017 Copyright  Gary Tanashian - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Gary Tanashian Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife