Counterparties

Recovering, with a stutter

September 5, 2014

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The economy added 142,000 jobs in August. It was a pretty big disappointment, considering the consensus estimate was around 225,000. The unemployment rate ticked down to 6.1% from 6.2% — bad news, since the decline comes from people dropping out of the labor force, rather than people getting jobs. Nick Bunker and Heather Boushey sum it up: “The U.S. economy is steadily if slowly expanding but not enough to spark sustained growth in jobs and wages and a commensurate decline in unemployment.”

MORNING BID – Laboring for insights

September 4, 2014

The unemployment report occupies a unique position as a bit of a lagging indicator (especially when it comes to wage growth) and yet the most important economic figure that markets look at on a monthly basis. Various indicators point to the likelihood of another strong report come Friday that should accelerate recent trends in markets – more gains in the stock market (with a helping of the “this means the Fed is going to cut us off from the punch bowl blah-blah” stuff) and more strength in the dollar, regardless of whatever incipient gains the euro can muster after the European Central Bank meeting.

Mr. Cantor Goes to Wall Street

September 3, 2014

No longer bringing in a government salary, Eric Cantor has decided to try his hand at investment banking. The former House majority leader will become a vice chairman and managing director at the investment banking boutique Moelis. His compensation will be around  $3.4 million through the end of next year (plus “the reasonable cost of a New York City apartment”).

MORNING BID – The economic state of things

August 1, 2014

The jobs report takes a bit of heat off of Thursday’s selloff, which was predicated in part on some nonsense out of Europe and more importantly some kind of growing consensus that the economy is getting hot enough that it might force the Federal Reserve to start raising rates a bit earlier than expected, given a sharp and unexpected rise in the employment cost index on Thursday. And while it’s fair to suggest the stock market has gotten a bit ahead of itself when the Fed is rapidly moving toward the end of its stimulus policies, it’s also possible that stocks have gotten ahead of themselves for a far more prosaic reason – the economy isn’t strong enough to support the kind of valuations we’re seeing in equities right now.

MORNING BID – What’s all the Yellen about?

July 15, 2014

Rants from TV commentators aside, the market’s going to be keenly focused on Janet Yellen’s congressional testimony today, with a specific eye toward whether the Fed chair moderates her concerns about joblessness, under-employment and the overall dynamism of the labor force that has been left somewhat wanting in this recovery. The June jobs report, where payrolls grew by 288,000, was welcome news even as the economy continues to suffer due to low labor-force participation and weak wage growth.

Thirsty for work [Updated]

By Jordan Fraade
July 11, 2014

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Last week’s jobs report may have capped off the best six-month period since the recovery began, but the long-term unemployment situation is as terrible as ever. Nearly3.1 million Americans have been out of work for six months or longer — a third of all unemployed Americans. This isn’t just a bad business cycle, says Nick Bunker. It has become structural problem in the labor market* (see update below). The Beveridge Curve, which tracks the relationship between the unemployment rate and job vacancies, has shifted outward, meaning there are lots of job vacancies, but more unemployed people than you would have expected had the pre-recession trend continued. There are plenty of jobs out there, Bunker says. Employers just aren’t hiring people to do them.

MORNING BID – Minute by minutes

July 9, 2014

The bond market remains pretty much tethered to the 2.50 percent to 2.60 percent range that’s prevailed for the 10-year note for quite some time now, with the primary catalyst being today’s release of the Federal Reserve’s minutes from its most recent meeting. The relevant data that investors are probably paying most attention to – the jobs report last week, the JOLTS jobs survey, shows some more things that is meant to keep the Fed engaged rather than moving toward an imminent increase in rates. The quit rate – the rate at which people leave jobs for others – is still historically a bit on the low side, not at a level that would make the Fed more comfortable that the kind of labor-market dynamism needed for the Fed to shift to raising interest rates. Fact is, the central bank just isn’t there yet.

from Data Dive:

Here’s why it’s so hard to land a job

June 25, 2014

Six years into the recovery, the American jobs situation is still in a rut. The relationship between how many people are looking for a job (the unemployment rate) and how many jobs are available (the jobs opening rate) has historically been predictable. Plotting it out in chart form gives you what is known as the Beveridge Curve, named after the British economist William Beveridge. The idea is that as the number of workers who are looking for a job rises — which to employers means the pool of talent for them to hire from gets bigger — the available jobs get filled and the opening rate goes down.

from Data Dive:

After six years, the US economy got its jobs back

June 6, 2014

"The scariest jobs chart ever", which Bill McBride at Calculated Risk has been updating month by month for years, is finally ready to be retired.

MORNING BID – Be not afraid of more bond-market rallies

June 6, 2014

After the world’s most boring jobs report in history (seriously, misses consensus by 1,000, unemployment and wage growth in-line with expectations, and revisions over the last two months amount to a total decline of 6,000 jobs, which is a pittance), the bond market is catching a bit of a bid again. That shouldn’t be a surprise given the way this market is still taking its cues from the European bond market, which is soaring on what would otherwise be a quiet Friday. (Those of you who read Richard Leong’s story yesterday noting the likely rally in bonds post-jobs would have been all over this – just sayin’.)