Registered Investment Adviser Caleb Lawrence
The major averages enter the final hour with small losses on little real news. Since Monday the Standard and Poors 500 Index is down 25 points or a little less than 1% while the NASDAQ has slipped 70 points or a little less than 1% as well.
The latest regional and state level employment data shows a number of regions losing momentum in April with respect to employment growth, notably the East North Central, Mid-Atlantic, East South Central and West North Central regions. The West South Central, Pacific and Mountain regions continue to show decent job growth. At the state level Texas +39,600, California +39,300, and Louisiana +9,200 created the most jobs.
Despite the endless parade of happy talk from the mainstream media about the 3.9% unemployment rate and how great the economy is. Study after study has shown that many Americans continue to struggle mightily. The latest is the ALICE Report from the United Way that shows some 51 million households, or 43% of the total, struggling to survive in the modern economy despite full time work. California, New Mexico and Hawaii have the largest share of struggling families, at 49% each, high housing costs and to a lesser extent taxes are the primary culprits in California. Low wages are of course another major factor and a recent report lays the blame on the Gig Economy once again after its shown that Uber drivers make just $9.21 hour after expenses, less than minimum wage. Per a recent study by the Economic Policy Institute. By implication of course is the fact that full time work does not provide enough income to live on in many cases, and I would think this goes a long way to explaining why so many have given up. As evidenced by the sharp decline in the labor force participation rate in the post crisis period, incidentally this is most of the reason the unemployment rate is so low. Further the record numbers of folks on disability and SNAP is also a reflection of the poor labor market, and I wouldn’t be surprised if there was a connection to record levels of student debt as people have to get by, one way or another.