Morning Report: Good jobs report 1/8/16

Markets are higher this morning after a turn-around in Asian markets and the strong jobs report.

Jobs report data dump

  • Nonfarm payrolls +292k vs 200k expected
  • Unemployment rate 5% in line
  • Average hourly earnings flat vs. 0.2% expected
  • Labor Force participation rate 62.6% vs. 62.5% expected

Generally a strong report – only disappointment is lack of wage growth. The labor market continues to improve, and if this trend continues, we are probably going to see another rate hike at the March FOMC meeting.

Builder KB Home reported a big miss yesterday, which sent the stock down 15%. Revenues and EPS both were shy of expectations. The slowdown in the oil patch is moving buyers down the price curve in Texas. Margins remain under pressure due to lack of available land and increasing labor costs.

We may have a new most valuable publicly-traded company. Saudi Aramco (the state-owned oil company) is thinking about an IPO, which could value the company over a trillion dollars. With oil revenues falling, the Saudi government is looking at different ways to balance the budget.

57 Responses

  1. Frist? Yes, Frist!


  2. We need a catchy name for this like the Wageless Recovery. Salaries are notoriously sticky but there have been a lot of systemic changes which have had downward pressure. My anecdotal case study is a former fed contract worker who got laid off in 2007 and has been working the past several years as a Starbucks barista at subsistence wages but he keeps holding on to the dream of getting an office job again some day.


  3. @yellojkt: “We need a catchy name for this like the Wageless Recovery.”

    The “oversupply of labor” recovery? Generally, wages only go up when the labor market tightens, so presumably that is not happening.


  4. Remember all the whining about how Republicans are preventing the government from “studying” the causes of gun violence by banning the CDC from researching it as a disease?


  5. Quite a catch.


  6. Congrats, NoVA! Go, Stillers!


  7. Mark:

    On the back of our recent conversation regarding local vs federal power, you may be interested in this article from 6 months ago in NR.

    In effect, AFFH gives the federal government a lever to re-engineer nearly every American neighborhood — imposing a preferred racial and ethnic composition, densifying housing, transportation, and business development in suburb and city alike, and weakening or casting aside the authority of local governments over core responsibilities, from zoning to transportation to education. Not only the policy but the political implications are immense — at the presidential, congressional, state, and local levels.


    • Man, I can’t wait to have people who don’t live in my city or neighborhood, who may have never been and may never come to my state, engineering where I live from their ivory towers. That sure to turn out great.


    • Kurtz is certainly alarmed by AFFH, and I will try to find time to read it through. If it is half as bad as Kurtz thinks, I will join in the campaign that I am sure suburban municipalities will wage against its final adoption.

      Have you read the actual proposed reg? Does it pit city against suburb? If if does, that will push the voting demographic of the suburbs further to the Rs. In TX, big cities are mainly D, but not by outlandish margins, suburbs are mainly R, but not by outlandish margins, and the Big Empty, including the small cities that serve as county seats (the Tylers, Amarillos, Abilenes, Midlands, San Angelos, Texarkanas, Lufkins, etc.) are 80%+ R. If AFFH is what Kurtz thinks, the suburbs will be driven to rural R margins.

      I also would not be surprised if it had that effect in similarly urban-rural states, like PA, where the middle of the state has always been referred to as “Pennsyltucky” in Philly and Pittsburgh.

      On another level, I oppose using race as a code for poverty. Most poor people in America are actually white, and while a much higher % of blacks than whites have not escaped poverty, I believe that most black families in America have escaped poverty.

      I may not read the proposed reg out of sheer preference for playing with my granddaughters, but I may. If I do, or you do, let’s share.


  8. ha. bengals gotta bungle.


  9. Good piece on Uber & the New York Taxi industry. This was funny:

    “After breakfast, Freidman walks two blocks east to his temporary digs at Trump Park Avenue on 59th Street. (Sandra is occupying the $4.8 million master residence six blocks north.) After he retrieves a Chihuahua named Harry from upstairs—he signs his e-mails “Yes I Am a Dog Lover” or “”—the plan is to hop into his Ferrari and zip over to one of his several garages in Queens. Not that he wants that written: “Honestly, I would love the piece not to be about ‘We had breakfast at Cipriani, then we walked over to his Park Avenue apartment, then we got into his Ferrari.’ ””

    & zero sympathy from me:

    “If Uber is chiefly responsible for driving down the price of taxi medallions, Freidman played a big role in driving it up in the first place. Allow him to explain his strategy: “I’d go to an auction, I’d run up the price of a medallion, then I’d run to my bankers and say, ‘Look how high the medallions priced! Let me borrow against my portfolio.’ And they let me do that.”

    Freidman says his father is the kind of fellow who believes “your houses and your cars have to be paid off.” His philosophy has been the opposite. According to the Citibank bankruptcy filing, Freidman’s companies owe roughly $750,000 on each Citibank medallion. That’s fine if you’re regularly outperforming the country’s major stock indexes, as medallions had been for decades. It’s less ideal when medallion prices drop to around, say, $750,000.

    There are parallels between the medallion bubble and the housing bubble of the mid-2000s: way-easy credit, credulous borrowing, everybody in debt. Freidman, in asking for a bailout from the city, even compared himself to too-big-to-fail American International Group. But he’ll take the comparison only so far. Ask him about the lawsuits and the missed payments, and he’ll tell you Citibank, Uber, and Capital One are in bed together. (He just sued Capital One, citing a credit card promotion it struck with Uber.) The self-made Freidman, by contrast, is forever outer-borough, forever scrappy.”


  10. Bummer about David Bowie………….he was always one of our family favorites. Everyone liked him, our kids grew up with his music, and I can’t even remember how many times we watched “Labyrinth” with the girls. I didn’t even know he had cancer…..:(

    And GO BAMA!!!!


    • lms:

      And GO BAMA!!!

      What?!? Go TIGERS!!!!


      • What a game, I think if Clemson had recovered the onsides they would have scored.


        • Yup. Credit Saban for the victory. The onside kick call was a great call.

          Clemson special teams let them down. The onside kick, the kickoff return for a TD, the deflected FG at the end of the first half. That’s 17 points right there.


      • I rather enjoyed the game……LOL


        • lms:

          I rather enjoyed the game……LOL

          It was a great game to watch, just the wrong result. Saban deserved it, though. Clemson got out-coached in the second half. Several big plays were big not just because of execution, but because of their design, most notably the onside kick but also the first of the 2 long TD passes that the Alabama tight end caught. Overall I think Swinney did a good job, but Saban was better.


  11. Worth a note for what didn’t happen:

    “Supreme Court Denies Appeal on Student-Loan Erasure
    Court won’t consider appeal by unemployed Wisconsin man who owes more than $260,000 in student-loan debt
    By Brent Kendall and Josh Mitchell
    Updated Jan. 11, 2016 4:23 p.m. ET”


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