Jack Dunn - Reclaiming Common Sense


(Aug. 1)  The ADP Report was released Wednesday. "July ADP: Strong Growth, Solid Revisions" reported that we saw one of our best June to July growth rates and a July annual growth rate greater than July 2016 and July 2017. May and June had the goods producing jobs revised lower and the service sector jobs revised higher than last reported. IT was week, as was expected. It was the one sector that was thought could have growth or contraction year to year. It was better than last month, worse than last year.

(Aug. 2) You would be hard pressed to find any television news source that gives you weekly updates on the unemployment claims data. Down was up this week. The first-time unemployment claims, non-seasonally adjusted, was under 200,000 claims, again. Yes, again.  This week we received the first-time claims data for the fourth week of July. "Historic Weekly Unemployment Claims Data" details how with over 141 million covered insured we have fewer non-seasonally adjusted first-time claims than any time since the program was created when there were 53 million or fewer covered insured.

(Aug. 3) This was a solid jobs report. The media latched onto the headline non-farm payroll (NFP) number as being a disappointment. Remember that the NFP data includes government jobs and that a over 5% drop in NSA Government sector workers was anticipated. The upward revisions to the April and May data meant that 50,000 more workers were added to the economy than were reported in the main headline number. Did we add 80,000 NSA CES Private Sector workers or 125,000. Should that number have been reported at 170,000 or 215,000, or 224,000? Unemployment dropped to a level not seen since July 2000. "July Jobs Report Better than July 2017" digs into the data and the revision.


(Aug. 3) The media has suddenly decided to start focusing on the wage section of the Jobs report. The thing is that they are reading the report and not examining the data. To understand the impacts of wage growth and worker growth the non-seasonally adjusted weekly wage data has to be examined by sector. The worker data has to be examined by sector. There are three sectors that are still in recovery mode from the Great Recession: Information Technology, Construction, and Manufacturing. "Wages and Workers Did Well during July" details how every sector received higher weekly wages this year than during July 2017. 

(Aug. 4) Week In review includes the above articles plus articles regarding Second Quarter GDP and the August ADP forecast article and the August Jobs Report Forecast Article.


(Aug. 6) Most weeks after the release of the Jobs Report, or Employment Situation Report, this column produces an article in the "Five Presidents at __ Months" series. This month "Five Presidents at 18 Months: Best Ever" continued the comparison of President Trump with former Presidents Reagan, Clinton, George W. Bush and Obama. President Trump has added more full-time jobs than his predecessors. Any interesting situation that was identified was that the workforce population grows the most during Republican Presidencies.

(Aug. 7) The Great Recession hit the male workforce the hardest. "Men Coming Back to Work" details how men lost over 10 million full-time jobs during the most recent recession, how women recovered all of their lost full-time jobs before men recovered their lost full-time jobs, and how men have started to see a surge in job creation.

(Aug. 7) This week we saw the June JOLTS, Job Openings and Labor Turnover Survey, the week after the July Jobs Report was released. There is a considerable amount of confusion as to how the Jobs Report data on job openings, hire, quits, and separations compare with the Current Employment Statistics worker data and the Current Population Survey U-3 unemployment levels."June JOLTS: Job Openings Off All-Time Peak" details that the highest quit rate are in three of the four lowest paid sectors.The same could see about the job openings data. Three of the four highest job openings sectors are the lowest paid sectors.  Apples, Oranges, and Tomatoes.

(Aug. 8) There is a common belief that the drop in the participation rate was due to the retiring of Baby Boomers. It is wrong. "July's Aging Workforce: Record for Over 55" details how there are more people over the age of 55 who are employed and who are unemployed. The over 55 groups are over-participating. Teenagers and people in their twenties are under-participating.

(Aug. 9) Thursday is still "Unemployment Claims Report Day." The former Obama Administration used to tout consecutive weeks with fewer than 300,000 seasonally adjusted claims. We started seeing the non-seasonally adjusted first-time claims level dip below 200,000 claims during September of 2015. "Another Record for First-time Unemployment Claims" detailed how this happened once during 2015, twice during 2016, four times during 2017 and now nine times during 2018. 

(Aug. 9) Another day, another dive into the Jobs Data. We saw a record level of July workers who were working two part-time jobs. We nearly saw a record for the number of people working two full-time jobs. "More Multiple Jobs Workers this July" details how nearly 7.5 million people were working multiple jobs this month. This is the most workers working two jobs during the month of July since July 2008.

(Aug.10) The discussion of inflation, wage inflation, consumption inflation, is picking up steam. Are wages keeping up with inflation? Yes. Is the way that inflation is being measured obscuring some things that we need to know? Possibly. Do we have Commodity Inflation or Commodity Deflation? Do we have Service Inflation or Service Deflation? Are we seeing Shelter Inflation or are we spending less of our monthly income on shelter? The seasonal factors did not add up to 100.00% this month, they added up to 100.13%.


(Aug. 11) Week in Review


(Aug. 13) The July Retail Reports (MARTS) is one of the major reports that can move the market, other than the "Jobs Report," and possibly the Gross Domestic Product (GDP) report. "July Retail Forecast: MARTS Marching Ahead" projected a strong annual growth rate, and strong year over year July retail sales for all sectors. It was thought that there might be two sectors that could see a July drop from last July's levels.

(Aug. 14)  There are three reports with regard to real estate that this column follows: New Construction, New Home Sales, and Existing Home Sales. This column uses month to month changes, same month changes, rolling year changes and current year changes to project current month possibilities.  "July Real Estate Forecast: Remarkable" projected strengthening data for Starts, Units Under Construction, New Home Sales, and Existing Home Sales. Inventory Matters.

(Aug. 15) This was a banner Retail Report. "July Retail Report Speaks Volumes" detailed the spike in July to July Sales in all sectors except Sporting Goods, Hobbies, Books and Music.  The same month growth rate was over 6%. The current year growth rate is over 5%. We are on the way to our first $6 trillion retail sales year.

(Aug. 16) The weekly unemployment claims data recorded the tenth week this year that the non-seasonally adjusted data was recorded under 200,000 claims.  "Shockingly Good Unemployment Claims Data, Again" had difficulty coming up with a new adjective to describe the current low unemployment claim data. We're going to need a bigger thesaurus.


(Aug. 18) Week in Review


(Aug. 20) The new home market, while a small part of the housing industry, is an economic multiplier. New construction means new jobs, new retail sales, and new service jobs. The July New Construction data a week ago this Thursday. The new home starts data was up compared to July 2017, as were the units under construction. Completions were not quite as strong as they were during July 2017. "New Construction Hammers Ahead" goes into the details.

(Aug. 21)  There has been considerable hyperventilation in the media regarding the number of job openings and the number of U-3 unemployed workers. There has also been a number of incredulous people discussing the low level of teen unemployment. T he problem is that you cannot compare data from two different surveys, that are measuring two different things, Job openings versus unemployment, that are themselves based on two different survey, the current population survey (CPS) and the current employment statistics survey (CES) data. You also need to compare participation rates when comparing unemployment rates.  "July Teen Participation Shockingly Low" details how the level of full-time jobs, the number of teen part time jobs, and yes, the number of teen unemployed workers are all lower than they were during July 1978. The teen participation rate is down from 71.78% to 42.96%.

(Aug. 22) The sales he July Existing Home sales data was a glass half empty or half full report. "July Existing Home Better Than Last July" detailed how the total number of units sold, condominiums and homes, was better than July 2016 and July 2017, how the average sales price set a record high for July, and how the record low inventory of existing homes did not set a new record low this month. Sale up, good, average sale s price up, good if you are a seller, stabilizing inventory, good if you are a buyer.

(Aug. 23) It used to be headline news when the seasonally adjusted unemployment claims data was reported under 300,000 claims. This week the non-seasonally adjusted (NSA) first-time unemployment (FTU) claims data was recorded under 200,000 weekly first-time claims for the eleventh (11th) time. The article "First-time Unemployment Claims: Speechless" details those eleven weeks. The article "Shockingly good unemployment claims data" from August 16th, detailed how we had been under 200,000 NSA FTU just four times during 2017, two times during 2016, once during 2015, and never between 1974 and 2014. Ignore the unemployment claims data at your own peril. The NSA FTU claims should fall until the end of September. We just need three more weeks of sub-200,000 claims to beat the number of weeks with NSA FTU claims under 200,000 recorded during 1973.

(Aug. 23) The new home sales data was released this Thursday. Just as the existing home sales price set a record, the new home data recorded a record July average sales price. "July New Home Sales Very Strong"  details how the number of units sold this year was up 10.4% from July 2017, the number of sales were up 8.64% (August to July) for the rolling year data, as compared to the rolling year data for July 2017, and the current year data is up 7.62% through July compared with January 2017 through July 2017. This was another piece of good news that was actively ignored.


(Aug. 25)Week in Review


(Aug. 29) The first revision to the second quarter GDP data was released this past Wednesday. The pundits had expected a downward revision to the data. That is not what happened. "Second Quarter GDP, Second Look" details how the personal consumption expenditures were revised lower, gross private domestic investments were revised up from from a negative value to a positive value, exports were revised slightly lower, Imports were revised down from growth to contraction, and government consumption was revised higher than their advance values were originally reported. Same quarter growth was revised higher to 2.9%.

(Aug. 30) The still produce weekly unemployment claims reports. This week was the twelfth week that the non-seasonally adjusted first-time unemployment claims was recorded under 200,000 claims. "Twelfth Week First-time Claims Under 200,000" detailed the weeks that we have recorded a value under 200,000 claims,  the truth that the last time we had this many weeks under 200,000 was 1973, and that we could see the seasonally adjusted first-time reported under 200,000 claims within the next two weeks.

(Aug. 31) Next Friday we will receive the August Employment Situation Report, or Jobs Report. There are a number of ways to examine the data. The problem is that there are two data sets that measure different  things. This month the two data sets are out of sync. The Current Employment Statistics (CES) data should record and report a strong private sector worker number. The Current Population Survey (CPS) should show a huge loss of Summer jobs, full-time and part-time, non-seasonally adjusted (NSA.) We should also see a large drop in unemployed workers recorded. The seasonally adjusted (SA) CPS data may reveal a net creation of jobs while the unemployment numbers still fall. We should see a strong SA CES "Jobs" number and a seasonally adjusted drop in both unemployment and participation. Almost all sectors should add seasonally adjusted workers month to month and year to year.  We are seeing strong rolling year growth for private sector workers. We need to watch the seasonal factor that is used to convert the NSA data to the reported SA value. We also need to watch the revisions to the prior data. If July sees an upward revision of 30,000 that would "borrow" 30,000 workers from August. A Seriously solid number of 300,000 could be reported as a good 270,000. Up for the CES data could be down for the CPS data.  "Auspicious August Jobs Report Forecast" examines this in detail.