QUOTE OF THE WEEK
“Don’t judge each day by the harvest you reap but by the seeds that you plant.” – Robert Louis Stevenson
TECH CORNER
Last Friday’s Bureau of Labor Statistics Report (BLS) for September came in way above expectations. The Bureau reported that the economy added 254,000 jobs vs an expected addition of around 140,000. The stock market immediately rallied on the news then fell back and then rallied up again all in one day. Today (Monday) the market is selling off. I think we are in for a lot of volatility between now and the election. The stock market can’t seem to make up its mind.
On the surface, the jobs report seemed almost too good to be true. Guess what, it was too good to be true. Approximately 75% of the jobs added were in healthcare, leisure, government, and hospitality. Except for government these are not high paying jobs. One little known fact is that the BLS considers any job an addition to the total job report. So, if you are working three jobs to make ends meet, that is considered three new jobs. Multiple job holders are at an all-time record high. On the surface, the report looks much better than it does after you dig into the statistics.
The report also reported that the hours worked is at a 14-year low. After the pandemic most employers couldn’t find new employees to fill their openings. What is now happening is that employers are reluctant to lay anyone off, so they are cutting the work week to lower costs. That can’t go on forever because for most companies, labor is their highest cost.
Another statistic that caught my attention is that the U.S. economy has lost over 500,000 fulltime jobs over the last twelve months.
So on balance the labor market is not really that great. This fact corresponds with other economic indicators that we track. The economy is in decline.
We are maintaining our safety-first positions for the portfolios.
