Keith Underwood 2 Comments
  • Revisions to June and July NFP figures of +44,000 brings the 3 month average gain to +221,000
  • Average hourly earnings are up 0.56% since June and up 2.2% from August 2014
  • August NFP of +173,000 is 30% below the 12 month average gain of +247,000


Looking through the lens of the FED, there are positives and negatives about today’s NFP release. On the face of it, a sub-200k number is a slight cause for concern, as the bobble heads will stoke a return to QE before raising rates (just cause the ECB threatens…). Markets will wonder, incorrectly, if the China collapse catastrophe has impacted US hiring, but I can’t see how such a recent event in China would have such an impact so soon. Day traders will react in their usual knee-jerk way of seeing correlated markets and the impact on the US and ride the negative sentiment while medium term players will know it’s too soon to judge the fallout in China impacting hiring in the US. One can’t ignore market sentiment if trading short-term but medium and long-term investors will evaluate more data over time.


Hourly earnings are rising. That’s occurring at a measured pace, but one that moving in the right direction. Every industry has experienced an increase from July apart from the transportation and warehousing industry, which remained flat month to month. On the upside, the 1.2% increase in the information industry (producing and distributing information and cultural products, providing the means to transmit or distribute these products as well as data or communications, and processing data) from July to August is notable. We knew the summer movie theatre box office was doing well but not that well! It seems to reason that this growth industry has employees in the director’s chair (can’t resist) when it comes to remuneration.


Don’t ignore the math. August NFP was lower than the 12-month average by 30%. This is a massive miss and should raise some questions about it being an aberration or perhaps the start of sharp contraction in the economy. I’m not yet convinced that trouble is brewing right here in river city. Housing is on a solid foundation (couldn’t resist), car sales are brisk, and US Open tennis tickets are selling easily. I am cautious but wary but as my very good friend Gene P. says, “more will be revealed” so we continue to data watch for more clues.


Happy Labor Day. – quick, discreet, and so worth the risk.






  1. Good day! This is my 1st comment here so I just wanted to give a quick shout out and say I truly enjoy reading your articles. Can you suggest any other blogs/websites/forums that go over the same topics? Thanks a ton!

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