On the subject of employment Goldman Sachs released a piece on the labor force participation rate noting that the recent .5% gain was a sign that the cyclical participation gap was essentially closed, meaning they expect the participation rate to level off hear and stop declining. Another interesting item from the report Goldman figures that the new “neutral” for job creation or the level required to keep the unemployment rate static is just 85,000 new jobs per month. This figure is roughly half of the previous estimate of 175,000 new jobs required each month to keep up with demographic trends and maintain the unemployment rate.
4th quarter earnings and revenue data for the Standard and Poors 500 show that revenues fell 4% in the 4th quarter and 3.6% for 2015. Earnings dropped 3.4% during the 4th quarter and 1.1% for the year, as per Factset research. When the going gets tough the first tactic is to revise the numbers so they fit the narrative. To wit the increasing use of adjusted earnings and assorted one time charges added to the footnotes of GAAP or Generally Accepted Accounting Principles reports to finesse the numbers.
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