Friday, June 7, 2013

Employment Report

Broke up my home ‘cause I didn’t have no work to do,
Broke up my home ‘cause I didn’t have no work to do,
My wife had to leave me ‘cause she was starving too.
When Mr. Roosevelt sent out those unemployment cards,
When Mr. Roosevelt sent out those unemployment cards,
I just knowed that work was goin’ to start.   Big Bill Broonzy, from the Collection of Alan Lomax
“The establishment survey showed a gain of 175,000 a reasonably good, but not spectacular print. The bright spot was involuntary part-time employment only rose by 26,000 so most of the jobs were (for a change) full-time jobs…
     Quick Stats
-In the last year, those "not" in the labor force rose by 1,741,000
-Over the course of the last year, the number of people employed rose by 1,596,000 (an average of 133,000 a month)
-In the last year the number of unemployed fell from 12,695,000 to 11,760,000 (a drop of 935,000)
-Long-Term unemployment (27 weeks and over) was 4,357,000 - a decline of 1,028,000 from a year ago
-Percentage of long-term unemployment is 37.3%. Once someone loses a job it is still very difficult to find another.
-7,904,000 workers who are working part-time but want full-time work. A year ago there were 8,116,000. There has been little improvement in a year. This is a volatile series.”  - Mish Shedlock, Global Economic Advisors
Full analysis with charts at…
The BLS revised the prior month’s gain in employment from 165,000 to 149,000 after revising it for new data.
“The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, worsened in May, dropping to 43.9%, from 44.5% in April. P2P is also down from May 2012, when it was 44.4%... The decline in P2P versus 2012 indicates that fewer people worked full-time for an employer this May compared with a year ago.”

Chart and story at…
JOBS – TROUBLE AHEAD? (Yahoo Finance)
“…defense cutbacks…have subtracted some $62 billion from federal spending since last fall, and an additional $200 billion in higher taxes and sequestration spending cuts are further reducing consumer outlays and government spending in the second and third quarters of this year…
…With all this fiscal drag, economists expect growth to slow to less than 2 percent in the second quarter, and jobs creation is likely to slow through the summer. With southern Europe’s depression dampening continental demand for goods made in Germany and other northern states, the prospects for U.S. exports and cut-priced competition from Europe in U.S. markets is heating up—growth and jobs creation could stay depressed for a long time.” - Peter Morici is an economist and professor at the Smith School of Business,, University of Maryland.  Opinion at…
All in all, this just looks like more of the same – slow growth that leaves us with no celebration, but no disaster either.
Friday, the S&P 500 closed up 1.3% to 1643 (rounded).
VIX fell 9% to 15.14.   
Friday’s move up was statistically significant for price-volume.  As reported here, and elsewhere, the move means there is a 62% probability that Monday will reverse direction and close down.  So it is likely that this bounce upward will end; if not Monday, soon thereafter.
Internals are most useful when they run counter to the price trend.  Since they are moving up along with price, we aren’t getting too many clues.  As of yet, they haven’t moved upward enough to convince me the down-trend is over, but with the Fed in play...who really knows.
Friday, the overall NTSM analysis was HOLD at the close.   SENTIMENT remains negative, but VIX has come down and is now neutral.  Price and Volume indicators are neutral. 
I remain about 20% invested in stocks as of 5 March (S&P 500 -1540).  My reasoning may be found at…(although that probably looks pretty lame by now.)
The NTSM system sold at 1575 on 16 April.  (This is just another reminder that I should follow the NTSM analysis and not act emotionally – I am under-performing my own system by about 2%!)
I have no problems leaving 20% or 30% invested.  If the market is cut in half (worst case) I’d only lose 10%-15% of my investments.  It also hedges the bet if I am wrong since I will have some invested if the market goes up.  No system is perfect.