Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Saturday, 7 March 2015

US unemployment rate tumbles to just 5.5 percent

NFP guesses

I really must buy a Powerball ticket this week - for a second consecutive month I went über-bullish on the nonfarm payroll guesses at +275,000 with a stab at unemployment falling to 5.6 percent...


In the event even that wasn't quite bullish enough with US employers adding a rip-snorting +295,000 payrolls in the month of February.

The January result was revised down moderately by 18,000 from +257,000 to +239,000, so the net result was therefore in effect +277,000...


I'll take that with a confidence interval of +/- 2k...

;-)

Payrolls

Monthly figures and results are largely guesswork in truth, but it's the trend that we are most interested in, and the trend remains imperiously strong with 53 consecutive months of nonfarm payroll growth.


Zooming in the chart below we can see just how strong the results have been over the last four months. 

In February, job gains occurred in food services and drinking places (+59,000), professional and business services (+51,000 and +661,000 over the past year), construction (+29,000 and +321,000 over the past year), healthcare (+24,000), and in transportation and warehousing.


Total nonfarm payrolls are clearly rising very strongly now as the US economy powers up through escape velocity...


Looking at the average rate of payrolls growth we can see how the rate of increase has improved with each calendar year since the horrors of 2009. Ahoy there, recovery!


Unemployment

Both the unemployment rate (5.5 percent) and the number of unemployed persons (8.7 million) declined in February. 

Over the year, the unemployment rate and the number of unemployed persons were down by 1.2 percentage points and 1.7 million respectively. The number of long-term unemployed declined by 1.1 million over the past year to 2.7 million.

The unemployment rate is now at its lowest level since May 2008.


The weakest part of the release was average hourly earnings which have increased by only +2.0 percent over the past year, while the participation rate was also unchanged in February at 62.8 percent.

The Wrap

Another bullish result which will ignite talk of an interest rate hike as soon as June rather than deferring until September.

The soft wages data suggests that the latter may be favourable, although possibly the earnings figures are being biased down as Baby Boomers retire to be replaced in the workforce by younger workers on lower salaries. Maybe. Perhaps.

In the context of global growth, while Australia's economy is trundling along well below trend, the US economy is now in recovery mode, China is still pushing for 7+ percent growth and Japan is picking up after its tax hike fiddling. The British economy and labour force is recovering nicely too.

On the other hand the Eurozone remains in a horrible mess, a "corpse" economy showing only moderate vital signs.

Today's strong US payrolls result follows on from a strong reading on the JOLTS index which I looked at here

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The latest Aussie Labour Force figures will be released on Friday this week.