As Predicted, Employment Trends May Be Accelerating [CHART]

Employment Trends May Be Accelerating by Todd Sullivan, ValuePlays

“Davidson” submits:

The Establishment Survey rises by 257,000 and the Household by 759,000. All good! There were positive revisions to the Establishment Survey which has been the pattern for some time. Finally, the chatter in the media seems to be taking these  reports as a positive rather than locating something to interpret as ‘a sign of weakness’. Light Vehicle sales were reported earlier in the week with a SARR(Seasonally Adjusted Annual Rate) of 16.7mil (subject to revision). These were also treated as an overall surprise. See the chart below.

Michael Mauboussin: Here’s what active managers can do

michael mauboussin, Credit Suisse, valuation and portfolio positioning, capital markets theory, competitive strategy analysis, decision making, skill versus luck, value investing, Legg Mason, The Success Equation, Think Twice: Harnessing the Power of Counterintuition, analysts, behavioral finance, More Than You Know: Finding Financial Wisdom in Unconventional Places, academics , valuewalkThe debate over active versus passive management continues as trends show the ongoing shift from active into passive funds. Q2 2020 hedge fund letters, conferences and more At the Morningstar Investment Conference, Michael Mauboussin of Counterpoint Global argued that the rise of index funds has made it more difficult to be an active manager. Drawing Read More

While it is too early to call, the trend in the Household Survey(my preferred employment measure) appears to show signs of acceleration. There have been hints in Job Opening and Help Wanted Online data in the past 6mo that we could be seeing an acceleration in employment, but it takes more than a couple of reports to actually have some confidence that this is so. Just the same, the economic trends in place since early 2009 continue to be affirmed. All remains good!

This is the first jobs report since early 2009 in which pundits and media seem to actually like without finding some negative they could use to dismiss any of the positives. I think this is significant.

1)      I continue to recommend Equities over Fixed Income.

2)      I continue to expect another 5yrs of economic expansion(based on traditional housing cycle economic impact).

3)      I think our recent repositioning into greater Intl LgCap and NatResource exposures is already showing benefit.