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Politics

President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People's Pundit Daily)

President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People’s Pundit Daily)

President Donald Trump reacted to the jobs report for the month of July, calling it more “good news” about the “booming Trump economy.” The Labor Department via the Bureau of Labor Statistics reported Friday that the U.S. economy created 157,00 jobs and the unemployment rate fell to 3.9%.

“The good news keeps rolling in for the booming Trump economy!” the president said in a statement.

The Employment Situation, commonly referred to as the monthly jobs report, missed the consensus forecast of 190,000. But upward revisions to the change in nonfarm payrolls for the previous two months resulted in a combined additional 59,000 jobs than initially reported.

Regardless of the forecast, the government jobs report still did offer far more positives than negatives, as TJM Investments analyst Tim Anderson noted.

“While the July non farm payroll gains were a bit shy of expectations, combined upward revisions for May and June are very encouraging,” Mr. Anderson said in a statement. “Revisions always give us a good look at which direction data is trending.”

The Hispanic unemployment rate ticked down 0.1% to 4.5% in July, falling again to the lowest level ever recorded. In June, the rate among Hispanics hit the previous low (4.6%). President Trump seized on these numbers in his statement.

As the overall unemployment rate fell to 3.9%, unemployment for Hispanics and for those without a high school diploma fell to their lowest levels in recorded history, 37,000 new manufacturing jobs were created in July for an average of 21,000 new manufacturing jobs under President Trump, and average weekly earnings rose 3.0% over the past 12 months, this is the best economic progress we’ve made in years.

Hispanic unemployment averaged 1.9% higher than the general population under Barack Obama. That gap has narrowed to 0.9% for Hispanics under the Trump Administration.

The unemployment rate for African Americans ticked slightly higher by 0.1% in July, coming off an all-time low. Still, African American unemployment averaged 5.2% higher than the general population under Mr. Obama. That gap has narrowed to just 3% under the Trump Administration.

The U-6 alternative unemployment rate fell to 7.5%, down from the previous low of 7.8% measured last May. That’s the lowest U-6 rate since May 2001, and a clear indication the U.S. economy has reverted back to a full-time economy, rather than a part-time.

President Donald Trump reacted to the jobs

Economy

United States Postal Service (USPS) clerks sort mail at the Lincoln Park carriers annex in Chicago, Illinois on November 29, 2012. (Photo: Reuters)

United States Postal Service (USPS) clerks sort mail at the Lincoln Park carriers annex in Chicago, Illinois on November 29, 2012. (Photo: Reuters)

The Institute for Supply Management (ISM) non-manufacturing index (NMI) showed the service sector expanded at a slightly slower pace in July. The NMI came in at 55.7%, which is still solid but a decline of 3.4% from the June reading of 59.1%.

“There has been a ‘cooling off’ in growth for the non-manufacturing sector,” Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee said. “Tariffs and deliveries are an ongoing concern. The majority of respondents remain positive about business conditions and the economy.”

The New Orders Index fell 6.2% to a still strong 57%. The Employment Index rose 2.5% in July to 56.1% from the June reading of 53.6%.

The Prices Index increased 2.7% from the June reading of 60.7% to 63.4%, indicating that prices increased in July at a faster pace. Prices have increased for 29 consecutive months.

RESPONSES FROM THE PANEL

  • “Business is strong in both our commercial-construction and residential-service areas.” (Construction)
  • “Current local and national conditions are good. On track to meet goals and projections for 2018.” (Finance & Insurance)
  • “There has been little change in business activity, despite all of the political turmoil. Patients get sick regardless of what is going on in the economy.” (Health Care & Social Assistance)
  • “Vendors continue to report that they are seeing significant increases in order volume this year. They report having to hire more staff to keep up with the increase in orders.” (Management of Companies & Support Services)
  • “Tariffs continue to make steel pricing volatile. Crude oil has trended over (US)$70 a barrel, which provides a bullish outlook for the duration of 2018.” (Mining)
  • “The improving U.S. economy is having a positive impact on our sales growth in all business sectors, with oil and gas taking the lead.” (Other Services)
  • “Generally optimistic. High labor-participation rates, but a GDP (gross domestic product) forecast of about 4 percent is tempered by tariff issues with China and the European Union.” (Professional, Scientific & Technical Services)
  • “Expanding concerns with price increases due to tariff and global trade policy changes and uncertainty. Receiving more requests from suppliers for price increases due to changes in the costs of steel, aluminum and the like.” (Public Administration)
  • “Business is up overall, but a lot of questions loom over the rest of the year. These include concerns about international markets and the increasing tariffs that impact the landed costs of goods.” (Retail Trade)
  • “Import tariffs on wood and steel. Shortages of rail cars, truck drivers and skilled labor. High-priced construction materials.” (Wholesale Trade)

The Institute for Supply Management (ISM) non-manufacturing

Economy

People wait in line to attend TechFair LA in Los Angeles, Calif. (Photo: Reuters)

People wait in line to attend TechFair LA in Los Angeles, Calif. (Photo: Reuters)

The Hispanic unemployment rate ticked down 0.1% to 4.5% in July, falling again to the lowest level ever recorded by the U.S. Labor Department. In June, the rate among Hispanics hit the previous low (4.6%).

The Employment Situation, commonly referred to as the monthly jobs report, missed the headline jobs created forecast. That compares to the ADP National Employment released on Wednesday, which found the U.S. private sector added 219,000 jobs for the month of July.

But the government jobs report still offered far more positives than negatives.

The U-6 alternative unemployment rate fell to 7.5%, down from the previous low of 7.8% also measured in May. That’s the lowest U-6 rate since May 2001, and a clear indication the U.S. economy has reverted back to a full-time economy, rather than a part-time.

The overall civilian unemployment rate compared with the Hispanic unemployment rate from July 1997 to July 2018. (Photo: Screenshot/BLS)

The overall civilian unemployment rate compared with the Hispanic unemployment rate from July 1997 to July 2018. (Photo: Screenshot/BLS)

The Hispanic unemployment rate ticked down 0.1%

Economy

People browse booths at a military veterans' job fair in Carson, California October 3, 2014. (Photo: Reuters)

People browse booths at a military veterans’ job fair in Carson, California October 3, 2014. (Photo: Reuters)

The U.S. economy created 157,00 jobs in July and the unemployment rate fell to 3.9%. While the consensus forecast was calling for 190,000 jobs to be added to the payrolls last month, the unemployment rate matched its consensus forecast.

However, Labor Department (DOL) via the Bureau of Labor Statistics (BLS) said upward revisions to the change in nonfarm payrolls for the previous two months resulted in a combined additional 59,000 jobs than initially reported.

“While the July non farm payroll gains were a bit shy of expectations, combined upward revisions for May and June are very encouraging,” said Tim Anderson, an analyst at TJM Investments. “Revisions always give us a good look at which direction data is trending.”

The unemployment rate among Hispanics fell to a new all-time low of just 4.5%, beating out the previous low of 4.6% measured in May 2018. though among African Americans it ticked up to 6.6% after also hitting an all-time low. Until May, the 3.9% unemployment rate was the lowest since December 2000.

The U-6 alternative unemployment rate fell to 7.5%, down from the previous low of 7.8% also measured in May. That’s the lowest U-6 rate since May 2001, and a clear indication the U.S. economy has reverted back to a full-time economy, rather than a part-time.

Manufacturing continued its recent upward trend under the Trump Administration after struggling on life support during the heavily-regulated period of recovery.

The manufacturing sector added a solid 37,000 jobs in July, with most of the gain coming from the durable goods component. Employment rose in transportation equipment (+13,000), machinery (+6,000), and electronic instruments (+2,000). Over the past 12 months, manufacturing has added a whopping 327,000 jobs.

Construction employment also continued on an upward trend, adding 19,000 jobs in July. Employment in the construction sector has increased by 308,000 over the year.

The average workweek for all employees on private nonfarm payrolls fell slightly by 0.1 hour to 34.5 hours in July, matching the consensus forecast. That follows a 0.1 hour increase in June.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $27.05, matching the consensus forecast. Over the year, average hourly earnings have gained by 71 cents, or 2.7%. That also matched the consensus forecast.

Average hourly earnings of private-sector production and nonsupervisory employees increased by 3 cents to $22.65 in July.

The government jobs report, also known as the Employment Situation, stands in contrast to the report on private sector job creation released earlier this week. The ADP National Employment found the U.S. private sector added 219,000 jobs for the month of July.

The payroll processor’s report, which is derived from actual payroll data, measures the change in total non-farm private sector employment each month on a seasonally-adjusted basis. It precedes the government jobs report, which tallies both the private and public sectors.

However, the initial government jobs report is derived from responses collected in a household survey, not hard data.

Mr. Anderson stressed how trends are particularly important for data in the BLS jobs report, “which gets most of its initial input from surveys, followed by revisions from hard data for the prior 2 months.”

“When you compare BLS coming in at 30,000 shy of the consensus and the ADP private sector job gains coming in 35,000 above on Wednesday, keep in mind that ADP tabulates their report from ‘hard data,’ while BLS gets most of its initial input from surveys,” Mr. Anderson added. “That is followed by revisions as real data comes in.”

“In light of the strong upward revisions in recent reports, it wouldn’t be surprising to see today’s report revised higher over the next couple months.”

The U.S. economy created 157,00 jobs in

Polls

Trump’s Summer Support Among Blacks Nearly Doubled This Year

An African American supporter of President Donald Trump holds up a Black for Trump sign during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People's Pundit Daily)

An African American supporter of President Donald Trump holds up a Black for Trump sign during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People’s Pundit Daily)

Support for President Donald Trump among African American voters nearly doubled from August 2017 to August 2018. The percentage of black voters who approve of the job Mr. Trump is doing as president was 15% in the Rasmussen Reports Daily Presidential Tracking Poll on August 2, 2017.

As of August 2, 2018, the percentage of black voters who approve of the job Mr. Trump is doing as president has risen to 29%.

“As we found in our 2016 presidential election polling — with likely voters, issues matter,” said Rasmussen Reports Board Member Ted Carroll. “Here we see previously unmatched levels of record low unemployment rates for blacks and other minority groups coupled with regulatory relief for small business’s, many run by minorities.”

Under President Trump, the unemployment rate for African Americans has fallen to the lowest level ever recorded. The same is true for the unemployment rate among Hispanics.

“This means jobs and a real path to upward mobility,” Mr. Carroll added.

In May, the PPD Poll, otherwise known as the PPD Big Data Poll, found Mr. Trump’s approval rating among black voters at 27%. That’s the highest level ever measured by Big Data Poll.

The mixed-mode survey of 1,067 likely voters nationwide was conducted from May 11 -12 & 14, 2018. The initial intention was not even to poll beyond May 12. But the extended field work helped ensure it wasn’t statistical noise.

Still, the increased level of support for President Trump among black voters isn’t exactly translating into votes for Republican candidates. The latest Rasmussen Generic Congressional Ballot shows Republicans with only about half that support. Republicans trail Democrats by 6 points, 40% to 46%, respectively.

Rich Baris, the Director of the Big Data Poll and PPD Election Projection Model, said the Republican Party isn’t viewed by American voters in the same light.

“I suspect the mystery is not that mysterious, at all. Black voters make rational policy choices just as other voters do,” he said. “Americans vote, whether right or wrong, for whom they believe will better their lives. It’s just that, until Donald Trump, Republicans unsurprisingly were losing a game they weren’t even playing.”

“They see President Trump as someone who is raging against the machine. They still see the Republican Party as a part of that machine.”

Nevertheless, the 29% approval rating among blacks in the latest tracking data from Rasmussen is more than triple the 8% exit polls indicated he won on Election Day. His overall approval rating — though at 50% on Thursday — still slipped to 46% for the month of July.

That’s down from a monthly high of 49% in April. In May, Big Data Poll similarly gauged his overall approval rating at 47% in May, the highest level measured since March 2017.

Support for Donald Trump among black voters

Economy

An American Flag flying in front of a U.S. manufacturing factory. (Photo: AdobeStock)

An American Flag flying in front of a U.S. manufacturing factory. (Photo: AdobeStock)

Factory orders, or new orders for manufactured goods, increased $3.3 billion or 0.7% to $501.7 billion in June, the U.S. Census Bureau reported. This followed a 0.4% rise in May and increases during 4 of the 5 five months.

Shipments, which have been up 13 of the last 14 months, rose by $4.9 billion or 1.0% to $501.4 billion. This followed a 0.6% increase in May. Unfilled orders increased $4.4 billion or 0.4% to $1,165.2 billion and have been up 7 of the last 8 months,. The gain in June followed a 0.5% gain in May.

The unfilled orders-to shipments ratio came in at 6.64, down from 6.67 in May. Inventories, which have been rising for 20 consecutive months, gained $0.7 billion or 0.1% to $669.3 billion following a 0.2% bump in May.

The inventories-to shipments ratio was 1.33, down from 1.35 in May. Below is a detailed review taken directly from the report.

New Orders

New orders for manufactured durable goods in June, up following two consecutive monthly decreases, increased $2.1 billion or 0.8 percent to $251.5 billion, down from the previously published 1.0 percent increase. This followed a 0.3 percent May decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $1.8 billion or 2.1 percent to $87.7 billion. New orders for manufactured nondurable goods increased $1.2 billion or 0.5 percent to $250.2 billion.

Shipments

Shipments of manufactured durable goods in June, up ten of the last eleven months, increased $3.7 billion or 1.5 percent to $251.1 billion, down from the previously published 1.7 percent increase. This followed a 0.2 percent May increase. Transportation equipment, up following two consecutive monthly decreases, led the increase, $3.1 billion or 3.7 percent to $85.3 billion. Shipments of manufactured nondurable goods, up twelve of the last thirteen months, increased $1.2 billion or 0.5 percent to $250.2 billion. This followed a 1.1 percent May increase. Chemical products, up three of the last four months, led the increase, $0.5 billion or 0.8 percent to $65.4 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods in June, up seven of the last eight months, increased $4.4 billion or 0.4 percent to $1,165.2 billion, unchanged from the previously published increase. This followed a 0.5 percent May increase. Transportation equipment, also up seven of the last eight months, led the increase, $2.4 billion or 0.3 percent to $802.3 billion.

Inventories

Inventories of manufactured durable goods in June, down following seventeen consecutive monthly increases, decreased $0.5 billion or 0.1 percent to $402.9 billion, unchanged from the previously published decrease. This followed a 0.3 percent May increase. Transportation equipment, down following two consecutive monthly increases, drove the decrease, $1.9 billion or 1.4 percent to $126.9 billion. Inventories of manufactured nondurable goods, up twelve consecutive months, increased $1.1 billion or 0.4 percent to $266.3 billion. This followed a virtually unchanged May increase.

Chemical products, up eight of the last nine months, led the increase, $0.7 billion or 0.8 percent to $88.7 billion. By stage of fabrication, June materials and supplies increased 1.0 percent in durable goods and increased 0.1 percent in nondurable goods. Work in process decreased 1.4 percent in durable goods and increased 0.8 percent in nondurable goods. Finished goods increased 0.2 percent in durable goods and increased 0.5 percent in nondurable goods.

Factory orders, or new orders for manufactured

US

Trafficking Graphic (Source: Arada Photography via AdobeStock Photo)

Trafficking Graphic (Source: Arada Photography via AdobeStock Photo)

WASHINGTON, D.C. – A Jordanian national was arrested Saturday for his role in a scheme to smuggle Yemeni nationals across the U.S. southern border from Mexico. Moayad Heider Mohammad Aldairi, 31, residing in Monterrey, Mexico was taken into custody upon his arrival at JFK International Airport.

He will face a criminal complaint issued in the Western District of Texas.

On May 29, an arrest warrant was issued alleging that in the later half of 2017, Aldairi conspired with others to smuggle 6 Yemeni nationals across the U.S. southern border in exchange for a fee.

“Aldairi allegedly smuggled six Yemeni citizens across the Mexican border and into the United States,” Assistant Attorney General Brian A. Benczkowski, of the DOJ Criminal Division, said.  “Alien smuggling puts our national security at risk, and the Criminal Division is dedicated to enforcing our immigration laws and disrupting the flow of illegal aliens into the United States.”

On Monday, Aldairi found himself before U.S. Magistrate Judge Marilyn D. Go in the Eastern District of New York for an initial appearance. Judge Go ordered that he be held pending transfer to the Western District of Texas for further criminal proceedings.

“The arrest of Aldairi showcases HSI’s unique ability to coordinate investigative efforts across international boundaries with multiple countries and different agencies throughout the U.S. Government,” said Special Agent in Charge Shane M. Folden of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) San Antonio.

HSI Jordan and the U.S. Embassy of Jordan have and are assisting in the investigation. The office of U.S. Attorney John F. Bash of the Western District of Texas will handle the case. It will be prosecuted by Trial Attorney James Hepburn of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Matthew Watters of the Western District of Texas.

“Attacking the leader/organizers of illicit international pathways for aliens from certain countries of interest will always be a priority of HSI,” Special Agent in Charge Folden added.

The Justice Department said in their press release that “charges contained in the complaint are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”

A Jordanian national was arrested Saturday for his role

Economy

U.S. jobless claims graph on a tablet screen.

U.S. jobless claims graph on a tablet screen.

Initial jobless claims rose 1,000 to a seasonally adjusted 218,000 for the week ending July 28, matching the consensus forecast. The report, which shows a tight labor market with strong demand, comes ahead of the monthly jobs report, otherwise known as the Employment Situation.

The 4-week moving average was 214,500, a decrease of 3,500 from the previous week’s unrevised average of 218,000.

The advance seasonally adjusted insured unemployment rate was unchanged at a very low 1.2% for the week ending July 21. The advance number for seasonally adjusted insured unemployment during the week ending July 21 fell 23,000 to 1,724,000.

The 4-week moving average for seasonally adjusted insured unemployment was 1,741,750, a decrease of 4,500 from the previous week’s revised average.

No state was triggered “on” the Extended Benefits program during the week ending July 14.

The highest insured unemployment rates in the week ending July 14 were in New Jersey (2.5), Connecticut (2.3), Puerto Rico (2.3), Pennsylvania (2.1), Alaska (2.0), Rhode Island (2.0), California (1.9), the Virgin Islands (1.9), Illinois (1.6), Massachusetts (1.5), and New York (1.5).

The largest increases in initial claims for the week ending July 21 were in Michigan (+3,703), Kentucky (+2,562), Missouri (+1,053), Kansas (+301), and Wyoming (+11), while the largest decreases were in New York (-8,310), Georgia (-3,732), Alabama (-3,361), Pennsylvania (-2,388), and Oregon (-1,884).

Initial jobless claims rose 1,000 to a

Economy

U.S.-based employers will layoff the lowest number of employees since November 2016, the Challenger Job Cut Report released Thursday finds. The pace of downsizing fell 27.1% to 27,122 from the 37,202 cuts announced in June.

The pace is of layoffs is down 4.2% from the same time last year, when 28,307 cuts were announced. The total of cuts was previously the lowest of the year last month, falling below the previous low of 31,517 recorded in May.

“The economy is at near-full employment. Nearly 90 percent of companies recently polled by Challenger are either actively hiring or in retention mode. Companies are not letting go of their workforces right now,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.

To date, employers have announced 272,301 cuts for the year, which is still 6.7% higher than the 255,307 announced through this point last year.

Retailers again lead in job cuts, with 75,763 announced to date this year, an 18.4% gain over the 63,989 Retail jobs cut through this point last year. The seven-month total for Retail job cuts is 321 cuts away from the full-year total in 2017.

“Retail cuts have been inching up the last four years, as online shopping causes disruptions to business as usual. We’re starting to see layoffs in this sector that rival recession years,” said Challenger.

Health Care companies trail Retailers in cuts with 28,484, a gain of 32% from the 21,554 cuts announced in this sector in the first 7 months of last year.

“Health Care providers are undergoing cost-cutting measures and targeting labor costs, all while dealing with skills shortages. Hospitals especially face challenges in balancing cost-saving measures with quality-of-care issues,” said Challenger.

The Services sector cut 24,168 jobs this year to date, while Consumer Products manufacturers cut 22,210 through July. That’s still a whopping 238.7% more than the 6,558 cuts announced through July 2017.

According to Challenger, the Trump Administration’s steel tariffs have cost a total of 70 jobs during the last 2 months. However, automotive manufacturers, who are particularly vulnerable to trade war fears, round out the top 5 job-cutting industries this year with 11,696.

That’s a 13.5% decline from the 13,521 announced through July 2017.

“We simply do not yet know what impact the tariffs on steel, as well as other proposed tariffs, may have on jobs,” Challenger added. “We’re seeing a trickle of job cuts related to these tariffs, but it is not yet torrential.”

U.S.-based employers will layoff the lowest number

Markets

New York Stock Exchange (NYSE) Building in the Lower Manhattan Financial District, New York City. (Photo: Tomasz Zajda/AdobeStock/PPD)

New York Stock Exchange (NYSE) Building in the Lower Manhattan Financial District, New York City. (Photo: Tomasz Zajda/AdobeStock/PPD)

Equity markets began the second half of 2018 with a very impressive performance in the month of July.

For the first time since the market break in early February, the S&P 500 has regained the 2800 level, and despite the sharp selloff in the technology sector during the last four days of the month, the S&P 500 still notched a gain for the month of +3.7%.

With the exception of the Russell 2000, the other Major Market Averages also logged gains for the month, with the NASDAQ composite +2.1%,  the DJIA +4.7% and the DJ Transports +7% leading the charge.

While the gains for July held through the volatility that we ended the month with, investors may have their conviction tested in August. Multiple points of uncertainty have exposed risk factors that cannot be ignored, in the nonstop 24/7 geopolitical and eco-political news cycle that is unlikely to take summer vacation.

  • Resolution of trade issues remain front and center on 3 fronts:  China, North American Free Trade Agreement (NAFTA) and the European Union (EU).
  • While corporate earnings have been broadly stellar for the Q2, portfolio managers continue to sell into strength in most sectors as an initial reaction to earnings, regardless how strong.
  • While macro data continues to improve, and consumer confidence remains at or near all time highs, there remains a debate over “what inning we’re in”.

It’s clear the market needs to define sector leadership for the remainder of 2018. The hyperbolic rally in so-called FANG stocks is suffering from exhaustion. The price of crude oil recently breaking below $70 is putting pressure on the energy sector.

There was notable weakness in retailers today and while some names in the sector have Year-To-Date gains of +40% or more, they were under-performers for a couple years and written off as “dead money” in Q4 last year.

While financials outperformed today — as the 10-year yield hit 3.005 for the first time since mid-June — they have struggled most of this year to get out from under the stigma of a gradually-flattening yield curve.

Expect minimally a vibrant rotational market during August and maybe the remainder of Q3.

Need more than Markets at a Glance? PPD Markets covers investing news and offers a complete stock market overview of major stocks, indexes, currencies and commodities on People’s Pundit Daily.

Equity markets began the second half of 2018

People's Pundit Daily
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