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Economy

Mr Assange, sporting a long white beard and wagging a finger, shouted "UK must resist" as he was carried out in handcuffs by seven men and hauled into a police van.
U.S. jobless claims graph on a tablet screen. (Photo: AdobeStock)

The Labor Department (DOL) said initial jobless claims were unchanged at a seasonally adjusted 230,000 for the week ending April 27, missing the forecast. The 4-week moving average rose by 6,500 to 212,500, up from the previous week’s unrevised average of 206,000.

PriorConsensus ForecastForecast RangeActual
Initial Jobless Claims230K215K210K — 220K230K

The advance seasonally adjusted insured unemployment rate was unchanged at a very low 1.2% for the week ending April 20.

No state was triggered “on” the Extended Benefits program during the week ending April 13.

The highest insured unemployment rates in the week ending April 13 were in Alaska (2.5), California (2.1), Connecticut (2.1), New Jersey (2.1), Illinois (1.8), Massachusetts (1.7), Montana (1.7), Pennsylvania (1.7), Puerto Rico (1.7), and Rhode Island (1.7).

The largest increases in initial claims for the week ending April 20 were in Massachusetts (+6,811), California (+4,471), Connecticut (+4,008), New Jersey (+3,096), and Rhode Island (+2,833), while the largest decreases were in Texas (-2,429), Washington (-1,191), Michigan (-737), Georgia (-593), and Arizona (-518).

The Labor Department (DOL) said initial jobless

Video

On Liberty Never Sleeps, Tom notes how everyone is fighting battles on just about every front, almost everything is politicized, and stupidity prevails.

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On Liberty Never Sleeps, Tom notes how

Economy

New residential construction, hew homes, housing starts, building permits, depicted on blueprints. (Photo: AdobeStock)
New residential construction, hew homes, housing starts, building permits, depicted on blueprints. (Photo: AdobeStock)

Construction spending was estimated at a seasonally adjusted annual rate of $1,282.2 billion, 0.9% (±1.0%) below the revised February estimate of $1,293.3 billion.

PriorRevisedConsensusForecast RangeActual
Construction Spending – M/M ∆1.0%0.7%0.2%-0.5% — 0.6%-0.9%
Construction Spending – Y/Y ∆1.1%———0.8%

Total construction spending for March is down 0.8% (±1.5%) from the March 2018 estimate of $1,293.1 billion. During the first three months of this year, construction spending amounted to $277.7 billion, down 0.2% (±1.3%) from the $278.3 billion for the same period in 2018.

Construction spending was estimated at a seasonally

Economy

Manufacturing industry production concept, depicting factory production on a conveyor belt with factory operational workers in uniform. (Photo: AdobeStock)
Manufacturing industry production concept, depicting factory production on a conveyor belt with factory operational workers in uniform. (Photo: AdobeStock)

The Institute for Supply Management (ISM) manufacturing index (PMI) fell 2.5 percentage points in March to 52.8, missing the consensus forecast.

PriorConsensusForecast RangeActual
ISM Manufacturing Index (PMI)55.3 55.0 54.5 — 55.5 52.8 
New Orders Index57.451.7
Production Index55.852.3
Employment Index57.552.4
Supplier Deliveries Index54.254.6
Inventories Index51.852.9
Prices Index 50.054.3

The Institute for Supply Management (ISM) manufacturing

Economy

Total Number of Jobs for March Revised Higher By 22K

Man reading newspaper with the headline Job Market. (Photo: AdobeStock)
Man reading newspaper with the headline Job Market. (Photo: AdobeStock)

The ADP National Employment Report finds the U.S. private sector created 275,000 jobs in April, crushing the consensus forecast and range. The total number of jobs added in March was revised up from 129,000 to 151,000.

PriorConsensusForecast RangeActual
ADP employment129,000 180,000 160,000 — 220,000 275,000

“April posted an uptick in growth after the first quarter appeared to signal a moderation following a strong 2018,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The bulk of the overall growth is with service providers, adding the strongest gain in more than two years.”

The lower-paying service-providing sector added a whopping 223,000 of the total jobs created in the private sector for the month. Franchise jobs added 9,500.

Still, the goods-producing sector added a solid 52,000 in April, including 49,000 in construction and 5,000 in manufacturing. Natural resources and mining was -2,000.

“The job market is holding firm, as businesses work hard to fill open positions,” Mark Zandi, chief economist of Moody’s Analytics, said. “The economic soft patch at the start of the year has not materially impacted hiring.”

“”April’s job gains overstate the economy’s strength, but they make the case that expansion continues on.”

Small businesses with 1 to 49 employees added 77,000 jobs, medium-sized businesses (49 to 499) added 145,000, while large-sized businesses with 500 or more employees added 53,000.

Worth noting, the ADP Research Institute Workforce Vitality Report (WVR) was released on April 24, and found wages for U.S. workers grew 3.8% over the last year, increasing the average wage level by $1.04 to $28.40 an hour.

That is a solid gain driven by wage increases for U.S. workers in the manufacturing industry. Manufacturing represents 10% of the workforce and saw a 3.9% wage increase to a $29.55 average hourly wage.

Trade, which represents 22% of the workforce saw 4.9% wage growth to a $25.27 average hourly wage.

ADP National Employment Report Methodology

The matched sample for the ADP National Employment Report was sourced from their payroll data, which represents 411,000 U.S. clients employing nearly 24 million workers in the U.S. The data for this report is collected for pay periods that can be interpolated to include the week of the 12th of each month, and processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of establishments.

The ADP National Employment Report finds the

News

An exchange showing one hand giving cash to the another for new house and keys, a vector illustration for new home sales. (Photo: AdobeStock)
An exchange showing one hand giving cash to the another for new house and keys, a vector illustration for new home sales. (Photo: AdobeStock)

The National Association of Realtors (NAR) said pending home sales rebounded sharply in March, up 3.8% to 105.8 from 101.9 and beating the consensus forecast.

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on contract signings. Year-over-year contract signings declined 1.2%, which marks the fifteenth straight month of annual decreases.

Pending Home Sales IndexPriorConsensusForecast RangeActual
M/M ∆-1.0%0.7%-2.1% — 2.5%3.8%
Level101.9105.8

“We are seeing a positive sentiment from consumers about home buying, as mortgage applications have been steadily increasing and mortgage rates are extremely favorable,” Lawrence Yun, NAR chief economist said, predicting pending home sales will begin to climb consistently. “Despite some affordability issues in the West, the numbers indicate that there is a reason for optimism.”

“Inventory has increased, too. These are great conditions for the region.”

The PHSI in the Northeast fell 1.7% to 90.5 in March and is 0.4% below a year ago. In the Midwest, the index rose 2.3% to 95.3 in March, though is still 5.0% lower than March 2018.

In the South, pending home sales were up 4.4% to an index of 127.2 in March, which is 0.7% higher than last March. The index in the West soared 8.7% in March to 95.1 and is now only 1.6% below a year ago.

While pending contracts are trending higher overall, Mr. Yun noted that current sales activity is underperforming. A rebound in housing would be welcome during an already strong economic expansion.

“In the year 2000, we had 5 million home sales. Today, we are close to that same number, but there are 50 million more people in the country,” he said. “There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years.”

The National Association of Realtors (NAR) said

Video

On Liberty Never Sleeps, it’s off to the races in 2020 with the Democratic nomination, and some really crazy half-witted narratives.

The money pledged thru Patreon.com will go toward show costs such as advertising, server time, and broadcasting equipment. If we can get enough listeners, we will expand the show to two hours and hire additional staff.

To help our show out, please support us on Patreon.

All bumper music and sound clips are not owned by the show, are commentary, and of educational purposes, or de minimus effect, and not for monetary gain.

No copyright is claimed in any use of such materials and to the extent that material may appear to be infringed, I assert that such alleged infringement is permissible under fair use principles in U.S. copyright laws. If you believe material has been used in an unauthorized manner, please contact the poster.


On Liberty Never Sleeps, it’s off to

Economy

Consumer confidence 3D gear graphic reporting the Conference Board Consumer Confidence Index.
Consumer confidence 3D gear graphic reporting the Conference Board Consumer Confidence Index.

The Conference Board Consumer Confidence Index rebounded strongly in April after declining in March, beating the forecast.

The Index now stands at 129.2 (1985=100), up from 124.2 in March. The consensus forecast was looking for 127.1, ranging from a low of 122.0 to a high of 130.0.

PriorConsensusForecast RangeActual
Consumer Confidence Index124.1 127.1 122.0 — 130.0 129.2

“Consumer Confidence partially rebounded in April, following March’s decline, but still remains below levels seen last Fall,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index, which had decreased sharply last month, improved in April, as did consumers’ short-term outlook.”

Consumers’ assessment of current conditions improved in April. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – rose, from 163.0 to 168.3.

Those stating business conditions are “good” rose from 34.7% to 37.3%, while those saying business conditions are “bad” fell from 12.4% to 11.7%.

Consumers’ assessment of the labor market was also more positive. The percentage stating jobs are “plentiful” rose from 42.5% to 46.8%, while those claiming jobs are “hard to get” fell from 13.8% to 13.3%.

Consumers’ short-term outlook also improved in April. The Expectations Index – which is based on consumers’ short-term outlook for income, business and labor market conditions – rose from 98.3 last month to 103.0.

The percentage of consumers expecting business conditions will be better six months from now rose from 17.2% to 19.9%. The percentage expecting business conditions to worsen fell from 10.0% to 9.1%.

Consumers’ outlook for the labor market was more favorable.

The proportion expecting more jobs in the months ahead rose from 16.8% to 17.2%, while those anticipating fewer jobs fell from 14.3% to 13.2%. On their short-term income prospects, the percentage of consumers expecting an improvement was unchanged at 21.5%, while the proportion expecting a decline fell from 7.4% to 7.0%.

“Overall, consumers expect the economy to continue growing at a solid pace into the summer months,” Franco added. “These strong confidence levels should continue to support consumer spending in the near-term.”

The monthly Consumer Confidence Survey is based on a probability-design random sample and is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was April 18.

The Conference Board Consumer Confidence Index rebounded

Markets

Before the day is over, we’ll have four members of the Dow Jones Industrial Average (^DJI), one former member of ^DJI, and a few dozen members of the S&P 500 (^SPX) report earnings.

Thankfully, the market will most likely churn through most of them with little net effect in anticipation of the Federal Open Market Committee (FOMC) policy statement Wednesday afternoon followed by the non-farm payroll and employment report Friday morning for April.

Clearly, we have a slightly higher penchant for the anticipation and drama of macro events. However, in light of the spectacle witnessed last week as the Major Market Averages shrugged off multiple high profile earnings misses from the likes of 3M (MMM) Intel Corp (INTC), and AT&T (T), we feel compelled to bring up last nights earnings debacle from Google (or as I’m corrected, Alphabet).

Alphabet (GOOG) released their Q1 earnings last night, which included a miss versus consensus on both their top line revenue — $36.3B juxtaposed to an estimated $37.2B, and bottom line earnings per share, +$9.50 versus $10.45.

They also acknowledged that their top line revenue growth rate declined to +17% from +26% a year ago. Correspondingly, their growth margin declined from +25% to +18% this year. Other than that things are OK, and they remain “excited about opportunities across the globe”, according to their CFO Ruth Porat.

In the interest of full disclosure, which GOOG apparently is not, I find it incompressible that they acquired YouTube 13 years ago and still do not break out YouTube financials in their earnings reports.

In the interest of full disclosure, I’m not a big “listen to the conference call” person. It’s a tedious and time consuming process and I’d rather read the write up from those with a deeper understanding of the financials.

However, at the urging of someone who assured me that the GOOG post earnings conference call was not to be missed, I did catch the recorded replay.

My takeaway for anyone who is an aspiring CEO or CFO, was this is a textbook example of how to totally butcher a conference call, particularly after a disappointing earnings report. As the unanswered questions kept getting repeated, you could hear the frustration in the analysts and investors (mostly analysts) on the call.

There was zero acknowledgement of the changing competitive landscape search engine advertising, almost as if they are in denial that Amazon is infringing on their near total domination of search engine market share. Most strikingly no apparent mobile strategy. It’s 2019, and no apparent mobile strategy?

As a result GOOG stock was down 7% in after hours trading following their conference call. Frankly, it could have been down much more and very likely will be today.

The one question I wish was asked on the call that I’ve been trying to get an answer to for years is:  Is Google a brand name or merely a verb? Is that why they changed their corporate name to Alphabet?

Before the day is over, we’ll have

Economy

Wages and Salaries Continue to Fuel Gain in ECI

A collage graphic concept for industry and labor. (Photo: AdobeStock)
A collage graphic concept for industry and labor. (Photo: AdobeStock)

The Labor Department said the Employment Cost Index rose 0.7% for the first quarter (Q1) 2019 and 2.8% year-over-year, meeting the consensus forecast.

Wages and salaries — representing roughly 70% of compensation costs — rose 0.7% and benefit costs, which make up the remaining 30% of compensation, also rose 0.7% from March 2018.

PriorConsensusForecast RangeActual
Employment Cost Index – Q/Q ∆0.7%0.7%0.6% — 0.9%0.7%
Employment Cost Index – Y/Y ∆2.9%2.9%2.8% — 3.2%2.8%

Wages and salaries gained 2.9% for the 12-month period ending in March 2019, up from 2.7% for the 12-month period ending in March 2018. Benefit costs increased 2.6% for the 12-month period ending in March 2019. In March 2018, the increase was also 2.6%.

For private industry workers only, compensation costs rose 2.8% over the year, matching the gain in March 2018. Wages and salaries rose 3.0% for the 12-month period ending in March 2019, up from an increase of 2.9% in March 2018.

The cost of benefits rose 2.4% for the 12-month period ending in March 2019 and increased 2.5% in March 2018.

Wages and Salaries Continue to Fuel Gain

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