The job market still stinks
Another curious payroll report masks ongoing deterioration.
Something odd is happening at the Bureau of Labor Statistics. Over the last few months, the unemployment rate has fallen rapidly from 8.3% in August to just 7.7% now. For the average person not interested in the details, it seems like things are going gangbusters.
But for those who care, the underlying data is at odds with the jobless rate. And it suggests that not only is the job market not getting better -- it's actually getting worse. Here's why.
Back in October, I wrote about how the largest statistical outlier since 2003 was responsible for the pre-election drop in the unemployment rate to 7.8%. A surge of new jobs, many part-time positions, boosted the jobs reported in the household survey.
Friday morning, there was another curious result that used a different strategy to knock down the jobless rate. This time, it was a 540,000 rise in people out of the labor force -- which continues the waterfall decline in the labor force participation rate. At just 63.6%, it's already at levels not seen since the double-dip recession of the early 1980s.
As the unemployment rate has improved over the last few months, the percentage of the population with a full-time job -- what I believe to be a truer measure of the health of the labor market -- has fallen from 47.7% to 47.3% and remains well below its pre-recession peak of nearly 53.3%. Back in the go-go years of the dot-com bubble, this measure nearly hit 55%.
More evidence was provided by Gallup, which conducts its own unemployment survey of households. It found that the unemployment rate surged nearly a full percentage point last month to 8.3%. That takes the jobless rate to levels not seen since May. Other measures, such as the percentage of those working part-time for economic reasons and the broader underemployment measure, also suggested significant weakening in the labor market.
And if you still don't believe me, then consider the huge drop in Friday's University of Michigan Consumer Sentiment Survey, which plunged from 82.7 to 74.5 -- well below expectations of 83. The future expectations component fell a whopping 13 points to 64.6, as people start worrying about the fiscal cliff/debt ceiling debate in Washington.
All of this suggests the economy is already stalling ahead of what will likely be a rocky 2013.
I continue to recommend investors adopt a defensive portfolio posture with a focus on safe havens like the U.S. dollar, Treasury bonds, and selected shorts such as Goldman Sachs (GS) and short ETFs such as the UltraShort Euro (EUO) -- both of which I've added to the Edge Letter Sample Portfolio.
Disclosure: Anthony has recommended GS short and EUO long to his clients.
I found these positions with the help of technical screens developed with Fidelity's Wealth Lab Pro back-testing tools, which you can find here. (Fidelity sponsors the Investor Pro section on MSN Money.)
Be sure to check out Anthony's new investment newsletter, the Edge, and his money management service, Mirhaydari Capital Management. A two-week free trial has been extended to MSN Money readers. Click the link above to sign up. Mirhaydari can be contacted at firstname.lastname@example.org and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.
No matter what the media says,...
It's still difficult to find a good paying full time job for someone with experience. There are still too many people applying for the same job lowering odds for getting an interview.
Many job descriptions state a high/advanced college degree is needed, but don't account for people who have had career experience for many years. Many jobs in my area want multi-lingual applicants. And many jobs are entry level as an intern with no pay.
SHAWN 3179....I certainly hope that you are not one of those COLLEGE educated kids......?
That us "stupid seniors" are depending on, to pull us through.?
And hopefully not becoming a Doctor, that we might have to depend on for SURGERY.?
I thought all you "financial" experts were trained in statistics. It appears that you were not.
Also, everyone on here is a whiner. Also a lot of you present as "facts" numbers you have only heard someone mouth without any attempt to ascertain the facts. I hope none of you have anything to do with the market.
GREAT NEWS..................GREAT NEWS...........GREAT NEWS...........GREAT NEWS........I'M SO EXCITED TO TELL EVERYONE THIS GREAT GREAT GREAT BIG NEWS........
99 WEEKERS ARE ENDING AFTER 99 WEEKS..........THATS RIGHT FOLKS ALL THOSE 99 WEEKERS ARE WEEKOUTED...............
EVEN GREATER NEWS IS THAT JAN 1st THE UNEMPLOYMENT RATE DROPS TO LOWEST LEVEL IN LAST 50 YEARS..................WOOOOOOOO HOOOOOOOOO
UNFORTUNETLY THESE 99 WEEKERS STILL HAVE NO JOB..........OH'bomination VACATIONING IN HAWAII.............SANDY VICTIMS GETTING RED NOTICES STUCK TO DOOR OF HOMES TELLING THEM THEY GET FINED IF NOT REPAIRED IN DUE TIME!
As we said before the election, wake up america. Stop letting yourself being used by the Obama progressive socalist machine!
For you collage kids that voted for Obama and the socalist party (to be fair) hope your parents will allow you to move back home! Because your chances for a real job just droped!
You stupid seniors that allowed yourselves to be used good luck in keeping a job or finding a new one . Your chances are 25% less than a collage kids chances! Once Obama care kicks in and your employer has to pay for your insurance wich will cost him another $800+/ month you are history and no "older person" will be hired!
Also for the uneducated stupid seniors, when you wife or husband of 30 years is refused life saving surgury because of the cost and there age. Look at yourself in the mirrow and know that you might as well have killed them yourself if you voted for Obama. "to be fair"
The stupidiy of the american voting public is stagering but you will not get what you wanted, a fair socalist president. Who will keep blamning everybody but his failed ideas
As the economy keeps worsting it will become harder and harder to cover it up!
Xataran...Yes, what never makes it out of the House or Senate..Seldom becomes Law nor Mandate.
And little credibility is given to the retirees and boomers, that are jumping ship or at least testing the waters of leaving the workforce....It's a different world..
And the younger Generations under 40-50 should respect that..
Like my better half has said for years, "WE need to get out of the way for the youngins', so as they may have a better life also"....She is right.
These numbers never seem to get the press they deserve.
Crazy...You have finally made some reasonable points....And I have a tendancy to agree...
But the rhetoric used to expresses your ideas and thoughts, if it were cleaned up somewhat; Would lend more Credibility to your statements/comment.
Scumbags, pieces of shidt, turds, and sorry azzes...Lends little flower to the arguement, and may be needed sometimes to make a point to a person of like mind..
But normally takes away from stature.
Plus I also know you are more capable then that....
Or do you expect us to believe that you don't realize how the size of the baby-boomer generation is going to impact labor force participation rates as they retire?
The problem with someone taxing or taking all the Rich man's money.....?
Maybe you really weren't paying much attention this past election, maybe you are not capable? Sorry for your problems...Romney a self proclaimed Rich Elitist...Had more then his FAIR SHARE of Wealth off-shore and much of the rest , in trust or blind trust, taking every Avantage of "favorable tax laws" possible.
When people from this Class pay way less then the biggest share of the Middle Class or even sometimes the working poor, something stinks....The 12-8% they pay does not build a Nation or help it recover from a Recession....The Middle Class haven given until they have little left and then many gave up their homes for lack of jobs...Or less income, not being able to keep up..
Given the fact or problems that many were over-extended, or living beyond their means; They still were making it until the Collapse "under Republican Leadership" came along...
And I would love to have you list; The number of Rich Elitist, that have "not recovered" or became wealthier....And you can throw in all Politicians to boot also...
You can probably count them on your fingers....??
Then tell me how many Homes that Romney or others like, him gave up....Please do.
If you can't come up with a dozen....You ought to STFU.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.