Registered Investment Adviser Caleb Lawrence
A bruising week for stocks sends the major averages into the final hour with very large losses. Since Monday the Standard and Poors 500 Index has fallen 85 points or 3% while the NASDAQ has dropped 188 points or 2.5%, this despite generally positive economic data today. Bitcoin gets drubbed again as the crypto currency drops below $8,000. I guess the political spying scandal trumps decent economic data.
The January employment report showed 200,000 new jobs created to kickoff 2018. The unemployment rate was unchanged at 4.1%, average weekly hours slipped .2 to 34.3, while average hourly earnings gained .3%. December and November were revised lower by 24,000. For the year wages increased 2.9% slightly ahead of the official inflation figures and overall this isn’t a bad report as 2017 saw some solid, but not great job creation. That said the labor force participation rate finished the year at 62.7% a little lower for 2017 and still far below the pre crisis peak of 66.4% seen at the beginning of 2007 a decline of 3.4%. The employment to population ratio finished 2017 up slightly to 60.1%, but it remains far below its pre-crisis peak of 63.4% at the beginning of 2007 a decline of 3.3%. What these figures speak to is that large numbers of folks, about 95-million, used to work, but no longer do, nor are they counted as unemployed anymore. Yet a series form the very good Blog Calculated Risk shows that 8.6% more people are employed today then were at the pre bust peak, now a lot of this is due to population growth and immigration but you have to wonder just how robust the labor market is given this data.