Reclaiming Common Sense

(June 1) The ADP Private Payroll report is usually published the Wednesday prior to the Friday Jobs Report data. The headline data from the government includes the Private and Public Sector data in the "non-farm payroll data" that normally is the headline number, even though former President Obama's "streak" data was the Private Sector data. This year, and since July of 2018, the ADP payroll data has grown at an annualized rate of at least 2.04%. The article "May ADP Forecast: All Sectors Up, 245,000 Added" found that, as a minimum, 180,000 payroll positions should be added during May. It also found that ween and Me could see an increase of over 227,5000 positions if we just kept up with the current year trend. It is even possible that we could see a value over 300,000.

(June 1) June 1 Week in Review: Green and Mean covered the ADP forecast, the weekly unemployment claims data,and the preliminary first quarter GDP report.

(June 4)  The key principle of understanding the weekly unemployment claims data or the Jobs Report data is to understand what could be expected. The article "May Jobs Report May Be Huge" examined the Current Employment Statistics (CES) worker data and the Current Population Survey (CPS) jobs and unemployment data. It was projected that we should see growth in all CES sectors month to month, except Government and Education Health Services (EHS) and May to May, non-seasonally adjusted. There were concerns that we could have another May comparable to May 2016. The CPS data was projecting non-seasonally adjusted (NSA) growth in full-time (FT) jobs and a substantial contraction of part-time(PT) jobs, as FT jobs replaced PT jobs. It was projected that just the reverse could be seen with regard to seasonally adjusted data (SA) as SA FT jobs contract and SA PT jobs increased from their April levels. "May Jobs Report May be Huge" was anticipating strong month to month and May to May growth.

(June 5) Wednesday we received the May ADP Private Sector Payroll Report. "May ADP: Good Annual Data, Weak Monthly" reported on the significant drop in month to month growth and how it impacted the annual growth. We saw annual growth in all sectors, as projected. We did not see month to month growth in all ADP sectors. We saw contractions in Construction, Natural Resources, Mining and Logging, Manufacturing, Information, and "Other Services." This report "warned" of potential weakness in the "May Jobs Report." The ADP Payroll data, while similar to the CES Private Sector data, does not include the government worker data that the Non-Farm Payroll Data included  in the Non-Farm Payroll (NFP)  CES data. We came off track with the 2014 data this month. Right now we are trending with the 2015 and 2016 data.

(June 6) The weekly unemployment claims  report was overshadowed by the weak ADP Payroll Report and questions regarding what it would mean for Friday's Jobs Report. "Unemployment Level Continues to Fall" noted that this was the eighth week that the non-seasonally adjusted (NSA) First-time unemployment (FTU) claims data was recorded under 200,00  claims. This places us ahead of last year's pace.  The continuing claims data was expected to fall. It was virtually unchanged, as was the Insured Unemployment Rate.  The NSA FTU fell from 199,094 to 188,697. The NSA Continuing Claims data rose from 1.509 million to 1.511 million while the NSA IUR was unchanged at 1.05%.

(June 7) To say that the May Employment Situation Report was disappointing would be an understatement. While we did see annual growth in all sectors, except Information (IT,) we saw month to month contractions in IT, Education and Health Services (EHS,) and Government. Annual growth dropped to just 1.72%. "May Jobs Surprise after ADP Disappointment" reported on the non-seasonally adjusted (NSA)  full-time jobs gains and the NSA part-time job contraction. We saw SA FT job losses and SA PT job Gains. Unemployment ticked upward, both SA and NSA, while we recorded our second lowest NSA U-3 unemployment level since 1979. We also have the most May full-time jobs and the most combined May jobs on record.

(June 8)  June 8 week in review: Jobs Week reported that the data was not all doom and gloom. The data was in the ballpark of possibilities. There were two singles, the ADP report and Jobs Report, and one triple, not a home run, with respect to the weekly claims report. One month does not make a trend. This was the data for the May ADP payroll report and the May Employment Situation Report. The next piece of data we will receive is the April JOLTS Job Opening and Labor Turnover Survey (JOLTS) data.  We should expect to see the most job openings, quits, separations, and hiring in the Education and Health Services (EHS,) Professional Business Services (PBS,) Trade Transportation and Utilities (TTU,) and the Leisure and Hospitality (LAH) sectors.  They don't draw pictures on the scorecard. Play Ball.

(June 10) The first article was a continuation of the May Jobs Report analysis. The article "Record May Worker and Wage Data" examined the growth in May to May workers in all sectors and the increase in average weekly wages in all sectors. Wage Growth was 3.50%. Worker growth was 1.77%. Gross income rose by 4.50%.

(June 10) The "article" that started all of this monthly analysis of the jobs data at a deeper level than what is normally done elsewhere is the "Five Presidents" series. It started with "Four Presidents at 81 months." The current installment is "Five Presidents at 28 Months: Jobs Mountain." We have seen 7.0 million full-time jobs  created and 2.6 million people drop out of the unemployed worker ranks since President Trump took office. The only other recent President who have added full-time jobs and reduced the level of unemployment was former President Bill Clinton.

(June 10) We received the April Job Openings and Labor Turnover the week after we received the May Jobs Report. "Record April Jobs Openings, Hires and Quits" details how the Jobs market sees four sectors with the most Job Openings, Hires, Quits, and Separations: Education and Health Services (EHS,) Professional Business Services (PBS,) Leisure and Hospitality (LAH,) and Trade, Transportation, and Utilities (TTU.)

(June 12) Th are e impact of the improving economy can be seen in the number of men and women who are working. "Record May Job Levels for Men and Women" examines the full-time job and part-time job data, as well as the unemployed workers data, for men and women. Men work more full-time jobs than women. Women work more part-time jobs than men. Men work more dual full-time jobs than women and women work more dual part-time jobs than men.

(June 12) There is an economic theory called "the Phillips Curve" that predicts that we can experience low inflation and high unemployment, low unemployment and high inflation, or a blend of the two, both being moderate. The Phillips Curve was broken by the "Greenspan Curve" during the 1990s while we experienced low unemployment and low inflation. We are breaking the curve, again, with the Trump Curve. "May Commodity Deflation, Service Inflation" details the changes in Shelter Expenses, Commodity Expenses, Service Expenses and Health Insurance Expenses.

(June 13) Readers of this column know that the weekly unemployment claims report used to be "headline news at the bottom of the hour." Now, the weekly unemployment claims report is bottom of the bird cage news. "June Unemployment Claims Remarkably Good" details how the continuing claims data is comparable to what were recorded during the 1973 with 87 million more workers. Fired Unemployment st-time claims were remarkably low. Continuing Claims were remarkably low. The Insured Unemployment Rate was historically low for the first week of June.

(June 13) This column almost always produces forecast articles in advance of the Jobs Report, The MARTS Retail Sales Report, and the Housing Reports. It is difficult to understand the data if expectations are ignored. "May Retail Report Could be A-May-Zing" projected month to month and May to May Growth in retail sales in all sectors, non-seasonally adjusted.

(June 20) There are a multitude of ways to examine the Retail Sales data: Same month growth, current year growth, trailing year growth, total volume sales, sales by sector, and growth by sector. "May Retail Report Records Record May" details how the current year data is accelerating, the rolling year, or trailing year data, is slowing a bit, and the current month sales was up 3.48%. The rolling year data and current year data only have the same growth rate during December. Last year we had our best Retail Sales Year ever, with over $6T in total sales. January was our best January ever. February was our best February, ever. March was our best March, April was our best April, and May was our best May. There were some misses this month. The article goes into detail.

(June 20) Another week, another weekly claims report. "Strong Weekly Unemployment Claims Continue" details how the first-time unemployment claims data fell, non-seasonally adjusted, to just over 204,000 claims, the continuing claims data came in at 1.519 Million, and the Insured Unemployment Rate (IUR) fell to 1.06%. We have had nine weeks this year with the non-seasonally adjusted First-time claims under 200,000. We are ahead of last year's record pace. How low can this data, all three of them, fall before the mainstream media starts to get excited about them?

(June 22) Summer vacations even play havoc with economic article writers. "June 22 Week in Review: Two-fer" reviews the data for the week ending June 15th and the week ending June 22nd.

(June 25) The normal release of real estate reports is New Home Construction, Existing Home Sales, New Home Sales. Last week we received the New Home Construction and Existing Home Sales Reports. We will get to those two reports soon. "New Home Sales Best Through May since 2008" may be a different story than what you heard elsewhere. Where the media was focused on a drop in May sales from May 2018 and a drop in the median sales price, this column wrote an article examining the May record average sales price and the situation where we are on track for our best new home sales year since 2008. Good news.

(June 26) The "Great Recession" was a Housing Recession, followed by a Jobs Recession, followed by a Retail Recession. We emerged from the Retail Recession First. We are in a Retail Renaissance. Next, during February of 2018, we finally emerged from the Jobs recession, after recovering and maintaining all of the lost full-time jobs that were lost during the time between July 2007 and January 2010. We have been in an Existing Home Inventory Recession since 2015, at least until August of 2018.  "Existing Home Sales Come to Life during May" details how inventory grew month to month and May to May (this is a good thing,) how the units sold were better than what was recorded during the month of May 2008-2017 (almost matched 2018,) and a record average sales price record was set for the month of May.

(June 27) Unemployment claims tend to increase during the month of June and into the first week or two of July. "More Good News from Unemployment Claims Data" explains that even while there was a slight uptick in both first-time claims and continuing claims, this level of first-time claims and continuing claims were compared to the same week during 1973 when we had 85 million fewer covered insured.

(June 28)
Wrapping up the week was a report on the first piece of real estate data from more than a week ago. There has been some concern that new housing starts have been dropping. The other side of that discussion is that new home completions have been rising. This continued this month. Even though new home starts came in lower than May 2018, and even though new home completions came in below May 2018, our starts level is better than 2017, and very close to what we had during 2017. The completions level is ahead of where we were during May 2018. We have more units under construction than May 2018. "New Home Completions on Pace for Best Year since 2007" goes into the details.

(June 29) "June 29 Week in review: More Good News"  asked (an answered) the question: If good news is recorded and not reported, did it really happen? (Yes.)