Employment Accelerating As Expected by Todd Sullivan, ValuePlays
From early Nov
The media says “We are off to the races!” with this morning’s employment reports. As usual the focus is on a ‘do or die’ interpretation based on a single month’s report. The Household Survey reported 4,000 higher employment vs. October 2014. It is not the actual number but the 6mos trend which is important. Both, measures of employment are valid within the context of each series. The Household Survey seeks to measure all employed persons including the self-employed while the Establishment Survey measures only corporate and government payrolls. Both series carry statistical errors which often result in sharp differences month to month. The 6mos trend analysis is required to reduce these errors.
From the Establishment Survey release:
“Total nonfarm payroll employment rose by 321,000 in November, compared with an average monthly gain of 224,000 over the prior 12 months. In November, job growth was widespread, led by gains in professional and business services, retail trade, health care, and manufacturing.”
“The change in total nonfarm payroll employment for September was revised from +256,000 to +271,000, and the change for October was revised from +214,000 to +243,000. With these revisions, employment gains in September and October combined were 44,000 more than previously reported.”
Looking at the Light Vehicle Sales vs. Household Survey chart below, both of which released November levels this week, the uptrends are fairly easy to see. The Household Survey has added 3million jobs annually since May 2011 with today’s release being in line with a well established trend-see GREEN ARROW.
Are investors only now waking up to the recovery which has been in place since early 2009? Only time will reveal the truth!
The US economy continues to expand at a decent but less than historical pace due to continued tight credit conditions. I anticipate credit conditions to loosen as economic expansion continues. With economic expansion I anticipate much higher equity prices the next 5yrs or so.
He later adds:
The Temp Help series below was just released with another rise. So many miss the point that in today’s litigious environment, many companies hire potential long term employees as part-timers first. Once, it appears after 6mos or longer that the individual is a good fit with a company’s culture, that employee is made fulltime. This can be seen historically and it is in the commentary of corporate America and the Staffing Industry. This rise portends a good economy for the next 12mos-18mos.