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Mixed Jobs Data, Japan is Back, and Twenty Years

Writer: Doug MacGrayDoug MacGray
Mar 11, 20245 min read

March 11, 2024


275,000 NEW JOBS:  According to the U.S. Bureau of Labor Statistics (BLS), the economy added 275,000 net new jobs in February, well ahead of expectations. However, the unemployment rate increased to 3.9% (from 3.7% last month). The unemployment rate stayed virtually the same for all major worker groups except teen workers (up to 12.5%) and adult women (up to 3.5%). The Labor Department announced that for December and January, it over-counted net new jobs by 167,000 (I hope it is not overcounting this month!). Net new jobs is a data point compiled from employers. The unemployment rate is compiled from households. Lately, these two surveys seem to be contradicting each other a bit. As you can see below, according to the BLS, the economy just keeps adding net new jobs. According to the household survey (the one that gives us the unemployment rate), the number of people actually employed has gone down for three straight months, and four of the last five. Last month, the number of people employed decreased by 184,000. Payrolls have increased, but the amount of people with jobs has been decreasing lately. This data comes from two different sources, and there will be discrepancies, but this is one that will have to sort itself out soon, it seems. Either the household data is too pessimistic, or the payroll data is too rosy. 



FULL TIME VERSUS PART TIME:  One troubling statistic in the employment data is the distinction between full-time and part-time jobs. According to the U.S. Bureau of Labor Statistics (BLS), in February of 2023, the U.S. had 133.2 million full-time jobs. In February of 2024, the BLS reported that the U.S. has less full-time jobs, 132.9 million. But the U.S. has 921,000 more part-time jobs than a year ago. Thus, much of the growth in jobs has been part-time. We need to continue to watch this data point, as I'm sure the Fed is doing.


A BREAK IN THE HOT STREAK:  The mixed signals in the jobs report caused stocks to move down to end the week, leading to U.S. stocks registering a slight loss for the week. Tech stocks, the most influential sector of late, was the worst-performing sector in the S&P 500. Five of the so-called magnificent seven stocks registered losses, as did Broadcom, Microchip Technology and Intel, the latter three of which registered losses of over 4%. 



LONGER-TERM PERFORMANCE:  Below are the annualized three-year and five-year numbers for these same indices.



A LONG TIME FOR A RECOVERY:  On March 4, Japan's Nikkei 225 stock index closed above 40,000, setting another record high. As you can see below, it closed in on 40,000 in 1990, then went on a decades long tailspin before finally beginning the recovery that has led to new high for the first time in over 30 years. Japan has experienced an inflationary economy of late after years of deflation. Corporate governance reforms seem to have helped.  Corporate earnings, and the outlook for future earnings, have risen.



HOT AND COLD JOB SITES:  With the exception of the time when governments forced economies to slow or shut down, the U.S. labor market has been strong for many years now. According to data from the Bureau of Labor Statistics, and compiled by the Economic Innovation Group, the top five, and bottom five greater metropolitan areas from 2018 to 2023 are as follows:


HIGHEST NET NEW JOBS

  • Dallas                                  +436,290

  • Houston                               +239,960

  • Phoenix                                +237,960

  • Austin                                   +226,689

  • Atlanta                                  +213,112


MOST NET JOBS LOST

  • Pittsburgh                              -50,659

  • Baltimore                               -29,320

  • Cleveland                              -21,955

  • Chicago                                 -20,041

  • Milwaukee                              -19,894


APPLE TAKES A HIT FROM EUROPE:  Last week, the European Commission fined Apple nearly $2 billion for monopolistic practices with its music streaming app. The Commission found that Apple acted in a manner that prevented people from learning about other, cheaper music streaming services. The investigation began when Spotifiy complained. Apple charges a 30% fee for in-app store purchases, and so it is in their economic interest to keep people purchasing apps in its store at its prices.


RENT STABILIZES:  According to ApartmentList.com, rents were up 0.2% in February after six straight months of declines. The nationwide median rent is $1,377. Rents have been down 1.0% over the past twelve months.


HOUSE PRICES UP:  While rents are not increasing, home prices are. According to CoreLogic, U.S. home prices in January were 5.8% higher than a year ago. CoreLogic forecasts that prices will rise by another 2.6% over the course of the next twelve months.


CONFIDENCE IN THE GROWTH OF THE ECONOMY:  When asked the simple question, "Will the global economy be stronger in 2024 than in 2023?," 85% of Indian citizens said 'yes,' the highest recorded in any country. 82% of Chinese and Indonesian citizens also answered in the affirmative. At the bottom, and all registering in the 30s, were Japan (at the bottom), Portugal, France, S. Korea, Sweden, and Canada. The U.S. came in at 45%. The global average was 50%.


IS IT PHONES?:  Below is a very sad graph. As reported by The Atlantic Magazine, since 1976, teens that go out with friends at least two times a week hung steady (70 to 80% or more) until 2008, one year after the release of the iPhone. Then a dramatic decrease began. According to the U.S. Census Bureau, Americans are spending less time with their spouses and children in favor of being alone (with our phones?). Americans spend an average of 4.5 hours on their phones.



A TWENTY-YEAR TRADITION:  Twenty years ago, a handful of guys got together to go skiing in New Hampshire. We had so much fun, we did it again. Over time, the trip has moved west, and grown to more guys. This year, eleven of us made it to Park City, Utah where we were welcomed with a lot of fresh snow and great skiing conditions. One of our members tore his Achilles on the first day, a rare injury for our group. Otherwise, it was a successful, fun trip as usual.



Have a great week!


Our mission is to help you see the objective, find the path, and navigate past the obstacles to a more prosperous future.


Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

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(610) 628 4545


"Friends are those rare people who ask how we are and then wait to hear the answer."  Ed Cunningham


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SOURCES:

APPLE TAKES A HIT FROM EUROPE: gritcap.io


(c) 2024 A.D., Stonecrop Wealth Advisors, LLC, All Rights Reserved


*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.


Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.

 
 
 

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