Everyday, Everyday I Have the Blues
By John Stoltzfus,
Chief Investment Strategist
Trend Analysis
Market Strategy Radar Screen Weekly - December 8, 2014
In this article:
- Market Analysis
- S&P 500
- Asset Allocation
“Gather Ye Rosebuds While Ye May”
We quote the poet Robert Herrick, but we remember it because of the late Larry Wachtel
Last Friday, the Labor Department’s non-farm payroll number helped confirm with significant weight the
quality and potential sustainability of the U.S. economic expansion that has shown momentum and
resilience beyond the end of QE (quantitative easing) and driven equity markets higher this year.
An aggregate surge in employment over the last year now even shows an albeit modest 2.1% increase in
wages in the latest 12 months, just ahead of the current inflation rate. It’s worth noting that the average work week rose to 34.6 hours, up from 34.5 and at a level where it was pre-crisis. The data points to further normalization ahead.
Reflation a Possible Reality
The better than expected payroll number, which showed the addition of 321,000 jobs in November and beat an earlier economist survey that projected a gain of 230,000 jobs, gave skeptics and even the most recalcitrant bears considerable pause to ponder.
The 321,000 advance in payrolls in November followed an increase in October that was revised higher to 243,000 by the Labor Department last week. Figures for September and October were revised up by a total of 44,000 jobs.
It was the first time since before the Great Recession began in December 2007 that payroll growth exceeded
300,000 with unemployment below the 6% level, according to Bloomberg data.
The November non-farm payroll number marked the 10th straight month employment has increased by at least 200,000 and the longest period of time since a 19- month period that ended in March 1995 that the number
has exceeded 200,000. The benchmark “headline” unemployment number held steady at a six-year low of 5.8%.
