The December "Jobs Report" was better than expected, with 321 thousand jobs being created. That brings the three-month average up to 278 thousand, which is certainly respectable. This will likely be the most jobs produced in any one year since 1999. (Average weekly earnings, reflecting slight higher earnings per hour and a few more hours, are also up a relatively modest 2.1% over last year.)
Republicans immediately pounced on this release as politically motivated to spur Christmas shopping, which is ridiculous. I have met many economists at the Bureau of Labor Statistics (BLS), which publishes this report, and cannot imagine a career technocrat or bureaucrat throwing away his fringe benefits and lavish retirement package for any slimy, non-intellectual political hack. (Of course, Democrats made the same unfair, biased allegations against the BLS during the Bush Administration.)
Normally, I would feel confident that this number of 321 thousand is an anomaly and would be revised downward next month, as it is a relatively volatile number, produced from a survey of corporate payrolls. However, the survey of households also indicates a three-month average of 289 thousand, confirming the payroll survey. It may be the economy has shifted gears into faster job growth.
So, how did the market react? It was up -- but not as much as one would expect from such good employment news. Because the job numbers were so good, that would mean the Fed will start raising interest rates sooner than expected. Therefore, interest-sensitive stocks, such as utilities and REITs, lost value with this news, holding down the overall market. If you are an income-investor, this was a preview of what will happen as we approach that day when the Fed actually does it. The Street still believes it will be mid-2015, while I think it will probably be late-2015.
In the meantime, let the good news be just that . . . good news!
Republicans immediately pounced on this release as politically motivated to spur Christmas shopping, which is ridiculous. I have met many economists at the Bureau of Labor Statistics (BLS), which publishes this report, and cannot imagine a career technocrat or bureaucrat throwing away his fringe benefits and lavish retirement package for any slimy, non-intellectual political hack. (Of course, Democrats made the same unfair, biased allegations against the BLS during the Bush Administration.)
Normally, I would feel confident that this number of 321 thousand is an anomaly and would be revised downward next month, as it is a relatively volatile number, produced from a survey of corporate payrolls. However, the survey of households also indicates a three-month average of 289 thousand, confirming the payroll survey. It may be the economy has shifted gears into faster job growth.
So, how did the market react? It was up -- but not as much as one would expect from such good employment news. Because the job numbers were so good, that would mean the Fed will start raising interest rates sooner than expected. Therefore, interest-sensitive stocks, such as utilities and REITs, lost value with this news, holding down the overall market. If you are an income-investor, this was a preview of what will happen as we approach that day when the Fed actually does it. The Street still believes it will be mid-2015, while I think it will probably be late-2015.
In the meantime, let the good news be just that . . . good news!
