Jobs, Jobs, Jobs
Jobs. Jobs. Jobs. – that what moved the market today. At least that’s what the market reacted to. Is it real? (read below).
Naturally, the stock market soared to a 12 month high, then fell off (showing a little bit of sense).
The big mover was the US Dollar – it went straight up – up over 2 cents against the Euro. This was a MAJOR move in the currency.
What followed the Dollar move was a major fall in Gold – down over $65 at one point – and a fall in bond values (increase in interest rates).
Oil and Gasoline fell slightly and are at the bottom of their trading zones right now. Let’s hope they keep going down. With a strong Dollar, they just might fall further.
In the News Today……
Unemployment Rate – fell to 10.0%. This is great news, and the number looks like it was calculated correctly – that is according to government rules using data that looks okay. So, this is good news. But, let’s look closer at this number.
The number of non-farm jobs fell by 11,000 in the same period. So, let’s think about this a little bit. The economy lost 11,000 jobs and the unemployment rate went down. Sort of not logical – at least to the man on the street. Here is how it happens. The unemployment rate is calculated using an algorithm that says who is still on the unemployment benefits role who doesn’t have a job yet. There are a bunch of people who are falling off the unemployment role because unemployment benefits only last for so long. So, more people fell off the list (and that’s a positive for the unemployment number) than lost their jobs.
Another fact is that the jobless rate is calculated by taking a “survey” of households. Have you ever asked yourself how good a sample really is? Well statisticians earn tons of money to answer that question. Do you trust the people taking this survey? Well, the answer may lie in that the unemployment rate calculation sometimes is at variance to the number of jobs lost in the economy which is reported by businesses to the government – you see two different methods.
The average work week rose, so this is good news too, as those who are working are working a few more hours. However, the average work week hours is a phony number – and can be very misleading.
What’s the rub? Well those folks who fell off the list still don’t have a job, but they are bucketed into a new category. Unemployment is real to anyone who doesn’t have a job and is looking for one. Also, there are a bunch of people out there who have part time jobs, or are taking fewer hours at their employer, rather than being laid off.
My conclusion: the unemployment rate went down, so politicians look good – remember it is the government who writes the rules on how to calculate the unemployment number. However, I am willing to bet that the number of people who are really looking for work, or want more hours, or want to full time job has just increased again. In other words, things just got worse, not better.
Durable Goods Orders – rose 0.6% last month. This is a rise in 6 out of the last 7 months, and this is really good news for factories. This hasn’t translated into new jobs in those factories yet, but if the demand continues it will mean more jobs.
Here are the last numbers for today:
Dow Jones 30 Industrial – 10,389 (up 23 points)
10 Year Treasury Bond – 3.48% (up 0.10%)
Euro – $1.4850
Gold – $1162 (down $55)
Oil – $75.81 (down $0.65)
Gasoline – $1.98 (down $0.02)
