Out Fox The $treet

Again, the market is trading with little to no rationality. This action is similar to the bottoms of the last 3 years. Don't really want to rehash all the news today except to say that the BLS report is continuously incorrect due to seasonal adjustments that are faulty. Normally that is why the jobless claim numbers are used for the leading indicator calculations. Combine the steady jobless claims with the strong ISM employment index and the Household survey and the jobs picture is a lot stronger then perceived by the market. Below is a graph from the Calafia Beach Pundit on the jobs data. Does this look like a data point to fear? The jobs market continues to make steady progress. Anybody using the Establishment survey as the only tool for investing is very misguided. Will the market bottom next week is impossible to tell? The above data tends to be pushed to extremes and nobody knows what is going to happen with Greece. The jobs data is the US just isn't a reaso...

Considering the weak government jobs report today, its interesting that the Monster Employment Index (MEI) hit a post recession high in August. With the doubts over the validity of the government report, why not look at this index instead combined with ADP and jobless claims. All of the other jobs reports were mostly encouraging. Jobless claims have been flat around 400K, ADP showed 91K jobs gained, and the household survey had 330K in gains. Honestly Stone Fox hasn't used the MEI in the past so understanding what the data represents isn't probably 100% accurate. The MEI is reportedly a gauge of US online job demand based on real-time review of millions of employer job opportunities culled from a large representative selection of career Web sites. So clearly the index could have issues with certain firms moving hiring decisions to the internet or the Web sites used lacking key representation. Logically any company probably wouldn't still be in busines if they just now...

After a surprisingly weak employment report today shouldn't investors focus on the fact that less workers and hence salaries will mean higher profits for corporations. After all we already know that November was a blockbuster month for retail sales (see Mark Perry's blog ) so the limited job growth isn't impacting spending. So why are all the headlines on jobs so doom and gloom? It's only gloomy if your looking for a job. Only 50,000 private jobs were created in November which was a far cry from the 150,000 prediction and 160,000 created in October. It appears that the seasonal adjustments for November were whacky so don't be surprised if we see a large adjustment upwards. So why all the negativity? The market is holding up well so clearly investors get the profits impact better then economists. After all adding 50K jobs last month and 160K in Oct is indeed job growth. Job growth leads to more income and hence spending. Might be lower then expected, might be slo...

As everybody scrambles to focus on the total jobs loss or the unemployment rate reported for November this morning, the real key number is the Average Weekly Hours. For November the number increase to 33.2 from 33.0 in October. This is a significant increase and according to reports a 0.1 hour increase is the equivalent to 400K jobs. Not only does it correlate to a ton of more hours worked it also signals that eventually more people will be hired as existing workers are utilized more. Still a lot of slack in the economy, but this is one of the better indications that the jobs market is indeed improving. Overall, just about all the metrics in the jobs report were very bullish: job losses much lower then expected, revisions to previous months up 159K, and workweek increased the most in months. The average workweek, which closely correlates with overall output and gives clues on when firms will start hiring, rose to 33.2 hours from 33 hours in October. That was the highest since February...

And I think he also nails the importance and outcome. Mike predicted a 450K versus the 467K reported. He also went on to say that it wouldn't prevent the equity markets from rallying. Jobs are a lagging indicator after all. If we see companies like increase production in Q3 because of lean inventories, the US will likely see a huge improvement in the jobs reports for July and August. The reported number was much worse then expected, but the expectations seem way off base. With the ADP report on Wednesday and the weakness in the auto sector in June it's hard to figure out why the consensus would be in the 365k range. Regardless the 'worst' then expected numbers were a 'shock' to the equity markets sending them down 2% today. The unemployment rate moved up only 0.1% to 9.5% and that will likely help the markets rally into the close. On the May report the better then expected numbers caused a huge rally to start the day that eventually rolled over as the day when o...