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Morning Commentary

America: Getting Back to Work

By Charles Payne, CEO & Principal Analyst
9/1/2017 9:36 AM
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Drumroll, please…

We get the August jobs report today. Even the Pharaohs of Wall Street in their summer mansions in the Hamptons will get out of bed and put on their mink slippers to see if job-creation magic continues. There are a number of signs that this should be an impressive report. In addition to the number of jobs, the focus will be on wages.

There was a time when we could use the so-called Jobs Openings and Labor Turnover Survey (JOLTS) report as a harbinger of higher wages. The idea is that a higher number of folks quitting jobs, coupled with increases in job openings should result in higher wages. You know, it’s a supply and demand thing. It hasn’t been that great of a predictor, but the numbers are becoming so pervasive that it’s hard not to think we could see a jolt (I couldn’t resist) in wages.

United States Job Openings

Keep in mind that the all-time record jobs openings were for June - trends matter. Implications are for a surge in goods-producing jobs.

Job Openings

May

June

Total

5,702,000

6,163,000

Mining

15,000

23,000

Construction

163,000

225,000

Manufacturing

350,000

388,000

By using ‘quits’ as an indicator, we could see these areas with the biggest pop in hourly wage gains.

Quits

May

June

Total

3,260,000

3,328,000

Professional/Business

618.000

681,000

Education/Health

429,000

472,000

State Government

190,000

234,000

 

Market Performance

The NASDAQ hit a new high on Thursday, and it wasn’t the usual suspects that put the index over the top.  Biotechnology is sizzling. I moved Biogen (BIIB) to BOLD/BUY on our Portfolio Review on Tuesday. If you’re not sure how to use the PA or would like more information about our service, touch base with your rep or research@wstreet.com.

Enjoying the best performance, the S&P Healthcare sector popped 1.7%, followed by the S&P 500 Materials Sector, which was led by chemical and package stocks.  When chemical stocks become sexy, the underlying economy is rocking.

Overall, stocks act great, entering September with resolve.  We may be heading toward the Autumnal Equinox, but the sun isn’t ready to go down on this rally yet.

Today’s Session

The government jobs report came in below expectations, and 41,000 jobs were erased from June and July releases. Net jobs of 156,000 was below consensus of 180,000 and the whisper numbers that climbed north of 200,000.

But, I was right about the trends in goods producing jobs. According to the BLS, goods producing in August increased 71,000:

Overall, the report is a disappointment, but economists like the number as good enough to move the economic needle without the threat of inflation. The America public understands we need more, and the White House understands this as well- which gives them more leverage to push both sides of the aisle from objections stances.


Comments
When I see numbers and statistics produced by government agencies, I begin thinking about the entrenched bureaucrats who are trying to prove President Trump wrong. It may take time to identify and remove the Osama loyalists.

Robert Andreas on 9/1/2017 10:05:44 AM
Charles---I am enjoying your focus away from prime time--hope you are too-- Thanks.

john on 9/1/2017 11:21:15 AM
I miss you on TV. When you coming back?

Brian K Niemann on 9/2/2017 7:03:44 PM
 

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