From the WSJ article July 14 comes this summary of real labor market conditions. It also reflects the rarely honest Bernanke that an unemployment rate of 7.6% “overstates the real labor situation." The data also supports the law of unintended consequences which is Obamacare. “Restaurants and bars have been adding an average of 50,000 jobs monthly since April—about double the rate from 2012. In June, they added a seasonally adjusted 51,700 jobs, up from May's 47,900 tally, but below April's 51,800. Overall, leisure-and-hospitality establishments hired more workers than any other industry in June, accounting for 75,000 of the 195,000 jobs added last month, according to the most recent Labor Department report, although economists cautioned against reading too much into one month's preliminary figures. But a number of restaurants and other low-wage employers say they are increasing their staffs by hiring more part-time workers to reduce reliance on full-timers before the health-care law takes effect.
Restaurant owners who have already begun shifting to part-time workers say they will continue that pattern."Does the delay change anything for us? Absolutely not," Mr. Adams of Subway said, explaining that whether his health-care costs go up next year or in 2015, he will have to comply with the law. "We won't start hiring full-time people."
Retail Sales missed estimates and dropped to 0.4% vs 0.8% expected, and prior 0.5%, but ex-gas & autos was -0.1% vs 0.3% expected, and prior 0.3%. The Empire St Mfg Survey rose to 9.46 vs 5 expected, and prior 7.84, and Business Inventories were slightly lower at 0.1% vs .0% expected, & prior 0.2%.
Per Bloomberg, the consensus for G-10 economic growth looks unimpressive as the chart below indicates.
Balanced against both employment and economic realities are global central banks and their liquidity policies which merely buy time. The latter tilted equity markets in a bullish manner as investors have few other realistic choices.
Monday markets mostly edged higher led by software (IGV), solar (TAN), utilities (XLU), financials (XLF), small caps (IWM) and emerging markets (EEM) sectors. The major market sectors also posted new highs if that floats your boat. Most other sectors were only slightly changed while homebuilders (ITB) fell as demand appears to have weakened. As to the latter, it’s amazing how quickly a rise in mortgage rates from 3.5% to 4.5% freaks everyone out. In lieu of getting would-be homebuyers off the couch to buy, it had the opposite effect. Some of this may be to poor employment situation. After all, how many part-time workers can buy a home?
With TAN you might wish to watch our short public chart video on this now hot solar ETF.
Overseas, China did report a 7.5% GDP gain vs previously declining 7.7%. It would seem the days of double-digit GDP in the country are over.
Volume was as light as a half day of trading around Christmas. Ridiculous! Breadth per the WSJ was positive.
Tuesday brings more earnings and the CPI, Industrial Production and the Housing Market Index.
Let’s see what happens.
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