Sunday, January 12, 2014

Overheard at the White House: "Someone send Chris Christie a fruit basket to thank him for distracting everyone"

Okay, so that's just my imagination running wild, but you have to admit there must have been some pretty happy people in DC this weekend when the news cycle dropped the discussion of the dismal jobs report in favor of Bridgegate.

However, I won't give them a pass.  This was a terrible jobs report but we have to keep in mind that it is just one month of data.  What is so confusing for those of us that follow various economic news sources is that this report conflicted with so many other reports.  Construction jobs reportedly fell while many others said construction activity improved, huge numbers of people leaving the workforce, while others suggested that people were re-entering the workforce, etc.

At the end of the day the hoopla over the shockingly strong Nov jobs number and the disappointment in the December numbers are probably both over done.  The reality probably lies somewhere in the middle of the increasingly volatiles data set.  What concerns me is the Federal Reserve has stated their goal is to return unemployment below 6.5%.  Well, at the current rate they could get there in a couple of months.  However, with 92 million Americans not working and no increase in workweek or average hourly wages, it is clear that while the calculated "unemployment rate" may be falling the reality on the ground suggests something far different.

Finally, a note on "oh, it was the weather" excuses that were everywhere on Friday.  Maybe this impacted the number of construction jobs (but remember it's still plenty warm in growing states like FL, TX, and CA) but how did the weather lead to a 6,000 cut in healthcare workers??  Also, since everyone has the memory of a flea with ADD these days click through here and look at the weather in December in New York City.  Note that the lowest high temperature for the month was a brutal 30 degrees ........... on Christmas. 

*******************************************************************
There is a worrisome chorus emerging from Wall Street's biggest banks and investors....

Goldman Sachs said "the S&P 500 is overvalued by almost any measure."

The largest fund manager in the world said "The age of getting rich quickly is over as is (most likely) the age of getting rich slowly." Note that this guys job is to help you get rich slowly and he's saying that's unlikely for the next 20 years or so.

A former Morgan Stanley strategist said stocks ignored reality in 2013 and that party will end in 2014.

There is a good collection of stories along these lines and perhaps I'll link to some later this week. 

Cheers!

No comments: