Two weeks from now Americans will head to the polls to vote in what has been billed as “the most important election of our lifetime.” That may be a bit of hyperbole, but it will no doubt be one of the most important – maybe not as important as the previous one in 2016, but certainly a close second.
Since then, there have been some huge changes in the financial markets and the economy, nearly all of them wildly – and demonstrably – positive. CNBC was nice enough to quantify them the other day in this chart, and the numbers are startling.
I’ll just mention a few:
S&P 500: Up 32% since the 2016 election.
Average hourly earnings: Up 5%, to $27.24 from $25.88.
Nonfarm payrolls: up 4.4 million, to 149.5 million from 145.1 million.
Unemployment rate: 3.7%, down from 4.9%.
Consumer confidence: up 37 points, to 138 from 101.
Corporate tax rate: 21%, down from 35%.
Assets held by the Federal Reserve: down 6%, to $4.22 trillion from $4.52 trillion.
Over the past few weeks, the likelihood of a December rate hike by the Federal Reserve Bank has grown substantially. Both economic data and hints from a number of Federal Reserve policymakers now point towards a December rate hike and now on Wall Street 70% of investors polled believe a rate hike in December is possible. So let us take a look at the data and what Fed officials are saying that is making investors believe a hike is coming.
One of the most compelling data points is the October jobs number. Expected to come in at 185,000, but blew that figure out of the water when actually coming in at 271,000. The unemployment rate fell to 5%, from 5.1% and average hourly earnings rose 0.4% for the month. Furthermore, the increase in pay on a year-over-year basis was 2.5%, the highest increase the jobs market has seen since July 2009. Continue reading "Fed Watch: December Rate Hike Likely Based on Fed Official's Language"→
The number of Americans seeking unemployment benefits fell 15,000 last week to a seasonally adjusted 330,000, signaling fewer layoffs and steady job growth.
The Labor Department said Thursday that the less volatile four-week average dropped 9,750 to 349,000.
A Labor spokesman said there was no indication that snow and freezing weather around much of the country caused the drop in applications. The number of applications could fluctuate in the coming weeks because of harsh winter weather that closed some offices this week and last, said Yelena Shulyatyeva, a U.S. economist at the bank BNP Paribas.
U.S. employers added 171,000 jobs in October, and hiring was stronger in August and September than first thought. The solid job growth showed that the economy is strengthening slowly but consistently.
The unemployment rate rose to 7.9 percent from 7.8 percent in September, mainly because more people began looking for work. The government uses a separate survey to calculate the unemployment rate, and it counts people without jobs as unemployed only if they're looking for one.
Friday's report was the last major snapshot of the economy before Tuesday's elections. It's unclear what political effect the report might have. By now, all but a few voters have made up their minds, particularly about the economy, analysts say.
Since July, the economy has created an average of 173,000 jobs a month. That's up from 67,000 a month from April through June. Still, President Barack Obama will face voters with the highest unemployment rate of any incumbent since Franklin Roosevelt.
The Gold Report: John, as Mark Twain famously quipped, "There are three kinds of lies: lies, damned lies and statistics." The Bureau of Labor Statistics (BLS) just came out with new jobs numbers that show the country added 114,000 jobs since September and the unemployment rate dropped to 7.8%, down from 8.1% in August. On Shadowstats.com, you argue that the numbers are wrong and pointed to politics as a possible reason for the incorrect figures. Are unemployment statistics being manipulated and if so how?
John Williams: I normally put out a commentary on the numbers, and, in this one, I raised the possibility of politics as a factor. The problem is very serious misreporting of the numbers and the result is what appears to be a bogus unemployment rate. The BLS reported a drop in the unemployment rate from 8.1% to 7.8%, three-tenths of a percentage point, which runs counter to what is being experienced in the marketplace.
What few people realize is that the headline unemployment rate is calculated each month using a unique set of seasonal adjustments. The August unemployment rate, which was 8.1%, was calculated using what BLS calls a "concurrent seasonal factor adjustment." Each month the agency recalculates the series to adjust for regular seasonal patterns tied to the school year or holiday shopping season or whatever is considered relevant. The next month, it does the same thing using another set of seasonal factors. Rather than publish a number that's consistent with the prior month's estimate, it recalculates everything, including the previous month, but it doesn't publish the revised number from the previous month. Continue reading "John Williams on Lies, Damned Lies and the 7.8% Unemployment Rate"→