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iTrust Daily Insight

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6th September
Edition 9.6.2019

September 6 Update: FANTASTIC jobs report today

  • Bitcoin:  $10,371 (Source: Coinmarketcap.com)
  • Digital currency price movement today: generally down 1-4% (Coinmarketcap.com)
  • Number of digital currencies with market cap over $1 billion: 13 (Coinmarketcap.com)
  • Market Capitalization of Bitcoin: $186 billion (Coinmarketcap.com)
  • Gold “F” futures contract: $1515 (source: Yahoo Finance)
  • Copper “F” futures contract: 2.6305 (Yahoo Finance)
  • Oil “F” futures contract: $56.73 (Yahoo Finance)
  • DJIA: $26,797 (+1/4% today) (Yahoo Finance)
  • S&P 500: $2,979 (+0.1% today) (Yahoo Finance)
  • FTSE (main London stock index): 7,282 (up slightly today) (Yahoo Finance)
  • Shanghai stock index: 3,000 (up 1/2%) (Yahoo Finance)
  • US 10 year Treasury yield: 1.564% (up 11 basis points yesterday; unchanged today) (WSJ.com)
  • US 2-10 yield difference: +0.016% (i.e., positively sloped — normal — yield curve) (WSJ.com)

This morning, the Bureau of Labor Statistics released its monthly employment report.  Many will have been disappointed the number of new hires for the month (August) was only 130,000 people — lower than the 160,000 new hire average expectation among published Wall Street analysts and economists.

However, we point to a few other very important points within the report.

  • average hourly income is up 3.2% over the past 12 months — the rising earnings of the 158 million working Americans translates directly to higher potential for more savings and more consumption and more investing 
  • only 3.7% — 6.0 million people — of the total adult workforce out of work
  • since August, the labor force has grown  by 2 million people but the number of unemployed has gone down by ~150,000
  • the Labor Force Participation Rate is now at 63.2% — a full 1/2% above where it was just in August — this economy is pulling more people into the work force.  This same phenomenon occurred during the boom times of the mid 1980s and again in 1996-1999.  Obviously, those periods ended with pretty deep recessions but we will be looking for signs whether this cycle can be sustained or whether is might be coming to an end.  The biggest “question marks” (potential factors) to consider are obvious but worth repeating: the US presidential election cycle, US-China trade negotiations, Brexit, and global interest rates.

Furthermore, yesterday we learned that non-farm private-sector (ie non-government) productivity was up 2.6% over the last 4 quarters through June 30.  This is important because literally all growth in wages must come from increased productivity (assuming no change in capital providers’ needs for profit).  So, if workers are producing 2.6% more goods and / or services with the same amount of work, business owners can afford to pay them more money since their producing more goods / services. 

Friday’s employment report:
https://www.bls.gov/news.release/empsit.nr0.htm
Table with Friday’s employment report:
https://www.bls.gov/news.release/empsit.a.htm
Thursday’s report on productivity & costs:
https://www.bls.gov/news.release/prod2.nr0.htm

Tim Shaler is Chief Economist of iTrust Capital.  He is a published Real Estate economist, was a portfolio manager and asset allocation expert at his previous firms and is an adjunct professor at Webster University. His MBA (Finance) and MA in Russian Economic History are both from the University of Chicago.

For all media inquiries, please contact Blake Skadron at b.skadron@itrustcapital.com

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