Friday, May 02, 2014

Jobs report looks great

From the BLS...

Total nonfarm payroll employment rose by 288,000, and the unemployment rate fell by 0.4 percentage point to 6.3 percent in April, the U.S. Bureau of Labor Statistics reported today.

The change in total nonfarm payroll employment for February was revised from +197,000 to +222,000, and the change for March was revised from +192,000 to +203,000. With these revisions, employment gains in February and March were 36,000 higher than previously reported.

All of the data looks great from the BLS.  The concern I think for the stock market is that bad data has been boosting stocks for the past 2 weeks.  As things have looked worse, people have assumed the Fed support would stabilize or maybe even grow.  This, in turn, has pushed stocks back to record highs.  However, if the economy is improving (which I'll get to in a second) the risk for stocks is that the Fed support could be pulled faster than expected.

Re: the jobs recovery - consider the following:

The local small business development corporation receives their funding from state and federal sources and their funding levels are supported by small business formations.  To be frank, few of these "businesses" ever launch but the government still assumes that not only are they operating but they are employing people. These phantom employees often make their way into the government jobs data.  Consider this sampling of some of the new "businesses" which filed in the past month in Jefferson county.

thrift shop
sewing and crafts
spa products, consulting
dog walking and pet sitting
crafts
lawn care and snow plowing
lawn care, snow plowing
dog training
photography
a paintball league
event planning

Not exactly a lot of Apples, Microsofts, or Intels in that group.


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