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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (17644)	1/13/2016 6:18:36 PM
From: benwood	2 Recommendations Recommended By isopatch John Pitera Respond to of 33421

In past 12 months, U-6 unemployment has gone up, and the labor participation rate has gone down. That's how strong the economy is, apparently. And among all that, job growth has been primarily on the low end, and much of that with elderly (or near elderly), who either have little leverage in securing higher pay (i.e. they absolutely need the stop-gap income), or else they need the insurance above all else and so pay is by far only secondary as a consideration. U-6 unemployment Nov '15 to Nov '16: 9.6 --> 9.9 Dec '15 to Dec '16: 9.8 --> 9.9 Labor participation Nov '15 - Nov '16: 62.9 --> 62.5 Dec '15 - Dec '16: 62.7 --> 62.5 I know Mish on his blog says it's statistically invalid to consider the birth death model in the employment reports issued by BLS; however, there appears to be no way to reconcile the headline job growth figures with a) the increase in unemployment and b) the decrease in labor participation rate. Just to accommodate the growth in the labor pool, about 160k net job gains per month are required. That's about 1.9 million additional jobs per year to maintain the status quo. The January jobs report claims that 2.65 million additional jobs were created in 2015. So... what's missing here? With at least 700k jobs created beyond what's needed to maintain the status quo, both the labor participation rate DECLINED and the U-6 unemployment INCREASED .... ???

To: John Pitera who wrote (17644)	1/13/2016 6:31:36 PM
From: The Ox	1 Recommendation Recommended By roguedolphin Read Replies (1) \| Respond to of 33421

The stock charts scan link shows 80 new highs to 1450 new lows. 18 to 1 is significant but the size of the new lows is pretty dramatic, if you ask me! I still feel that QE did it's job, which was to shore up the leaky banks - not mend the economy. If it was designed to mend the economy, there would have been a whole lot more strings attached to the zero interest rate loans.

To: John Pitera who wrote (17644)	1/13/2016 9:23:02 PM
From: The Ox	Respond to of 33421

Fed’s Beige Book Finds Modest Growth in Most Districts Survey finds New York and Kansas City economic activity By HARRIET TORRY Updated Jan. 13, 2016 4:15 p.m. ET WASHINGTON—Wages and prices remained subdued in most of the U.S. through the first week of the year, according to a survey of economic conditions, a discouraging signal for Federal Reserve officials grappling with the threat of persistently weak inflation to economic growth. While the jobs market continued to improve moderately, wage increases were “flat to moderate, while price increases tended to be minimal” from late November through Jan. 4, the Fed’s beige book found. The findings come two weeks ahead of the Fed’s next policy committee meeting. Central bankers have said repeatedly that inflation should pick up as joblessness falls and slack in the economy diminishes. But recent economic data have given few indications that inflation, which has fallen short of the Fed’s 2% goal for 3½ years, is back on track. Chicago Fed President Charles Evans said earlier Wednesday that central bankers “have not done well” in terms of getting inflation to desired levels. Mr. Evans, who held a voting role on the interest-rate-setting Federal Open Market Committee in 2015 but won’t this year, reiterated Wednesday that he wants the Fed to raise short-term interest rates slowly given concerns about weak inflation. Wednesday’s report, based on anecdotes in the Fed’s regional survey of economic conditions, nonetheless had bright spots as the majority of the Fed’s 12 districts reported economic growth. Conditions in the New York and Kansas City districts were “essentially flat,” but contacts were “upbeat” in Boston. Consumer spending, a mainstay of the economy, grew in most districts through the holiday season. The housing market and commercial construction improved in most areas, and loan demand grew in most districts, the Fed said. However unseasonably warm weather caused some hiccups, prompting weaker apparel sales in a few places, and renewing downward pressure on low energy prices by increasing the sector’s already abundant inventories of oil and gas. Auto sales “were somewhat mixed, as activity has begun to drop off from previously high levels in some districts,” the report said. The report cited lower gasoline prices as a contributing factor for auto sales in roughly half of the districts. A strong U.S. dollar and slow growth overseas continued to stifle manufacturing activity in many areas, the report found. The sector has been hit by low commodity prices, weakness overseas and currency movements, which have curtailed demand for U.S. exports while also making imported goods less expensive. A gauge of manufacturing activity released last week by the Institute for Supply Management found U.S. factory activity contracted for the second straight month in December, highlighting the global forces weighing on American manufacturers. Policies meant to stimulate overseas economies have helped push up the value of the dollar against other currencies, effectively making American-made goods more expensive for international customers while lowering the price of imports into the U.S. Tourism activity varied as the strong dollar made trips to the U.S. more expensive for visitors from overseas. New York reported particular weakness, with lower hotel revenue. Mild weather hurt ski resorts across the East Coast and parts of the Midwest. Conditions on farms were generally more negative, due to weak crop and livestock prices. Drought remained a problem in some regions, while heavy rain and flooding hit harvests elsewhere. Economists welcomed the beige book’s overall uptick in growth, however they voiced concerns about persistent stress in certain sectors. The Fed in December lifted its short-term interest-rate target off near-zero levels for the first time since the end of 2008, putting its overnight target rate in a range of 0.25% to 0.50%. Fed officials have penciled in four increases this year to just below 1.5%. Few observers expect the Fed to move rates again at their gathering in January. Federal-funds futures, used by investors and traders to place bets on central-bank policy, indicated just 8% odds for a rate increase at the January policy meeting, according to data from CME Group. Federal Reserve Bank of Atlanta President Dennis Lockhart said Monday that “my bias would be to, in all likelihood, to look through the January meeting to a later meeting” before deciding to raise rates again. The official held a voting role on the interest-rate-setting Federal Open Market Committee last year, but he won’t this year.