Disclaimer

Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Saturday, March 10, 2012

US Employment data for February



Once again, revisions to the payroll data were positive.  But overtime hours ( a very sensitive indicator) were revised down for January though they rose again in February.  And the unemployment rate didn't fall in February.

But these are statistical zigs and zags.  The stats are based on sample surveys with random fluctuations in the measurements around the "true" picture.  The best guide to the true picture is the trend over a couple of months.  The chart below shows the 6 month change in the unemployment rate, inverted because unemployment falls when the economy strengthens.   This indicator is the strongest it's been in nearly 30 years.  (As ever, if you click on the chart you should get a bigger image)



The chart below shows the change in payrolls, 3 monthly average.  It's not yet exceeded the records set over the last 27 years.  But it's fairly typical of a normal economic recovery.



The Bernanke "helicopter" is working.  All we have to avoid now is a premature tightening in monetary policy and a cretinous tightening in fiscal policy (the deficit is already falling thanks to the recovery).

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