The Monster survey of online job demand in May uncovered increases in 12 out of 20 industries, some of which are shown here. Only 3 out of 20 industries have experienced meaningful deterioration in the past year (agriculture/forestry/fishing, hotel/food services, and public administration). I note the significant gains in construction, which appear to confirm other tentative signs that the construction industry has finally turned the corner.
Well, the market did not like the jobs number this AM. It appears private sector hiring is slow to develop. Perhaps Keynesian stimulus policies are not what they were cracked up to be.
ReplyDeleteMarc Chandler, Brown Bros. Harriman's very fine currency strategist is pointing out that despite the poor payrole increase, the workweek increased, and hourly earnings rose. He estimates it is the equvalent of 300M jobs in terms of economic activity and is consistent with 3% or so GDP growth.
It also appears that businesses are still working current employees longer hours rather than adding workers.
Ex census number was about 21K.
ReplyDeleteHungarian Forint getting hammered. Trading on the largest commercial bank halted. Euro CDS widening. Plenty more shoes to drop over there. The party is just getting started.
Btw I visited there in 2005 and recommended we sell the currency when it was evident the place was a joke of an investment.
ReplyDeleteIt had reached the 10th most expensive city in the world yet nary a local was out eating or shopping. Additionally, I never could figure out which cash point would accept my European bank card.
Everyone spends there days in the natural salt pools. While this is admirable as a life style, it doesn't make a worthy investment vehicle.
You will find these types of realities across Europe when the rocks start to over turn.
There has been a change in government in Hungary. A center/right government is taking over from a leftist one, who are primarily responsible for the deficits and poor bookkeeping (sounds familiar, doesn't it?). The incoming government official, while scoring some political points on his leftist predecessors, unfortunately uttered the word 'default'...doesn't go over well with one's creditors. I'M TOLD, its kinda like hesitating when asked by your wife if you're having an affair. Not good.
ReplyDeleteUnfortunately for Hungary, much of their debt is denominated in ....SWISS FRANCS. Another 'not good'. Hungary is NOT part of the Eurozone so they are somewhat at the mercy of the Swiss. It will be interesting to see how they handle it, and they are certainly capable.
Keep in mind, Hungary's GDP is about $150 billion. Pretty tiny by global standards and a tail not likely to wag the Eurozone, much less US GDP.
The private sector jobs number I saw was 41M... still pretty anemic. Big problem for Obama...Fed stays put.
JMCO
Public,
ReplyDeleteWhile I do think Europe has largely been run by economic adolescents enamoured with socialist and borderline communist ideas, there are a few good places to invest there. Germany is the dominant economy and is quite efficient. Their industrial technology is as good as anyone's.
I also think the political worm is turning there. Britain's election of a center/right coalition and recently Hungary's similar results appear to me to be a trend.
I have never known Europe to be a global economic engine. They have always kinda been a big open air museum. The big Kahuna is the USA followed by Asia.
BTW, I wouldn't care to invest much there either.
If the sub-prime crisis taught us anything, its not about the nominal value of the underlying positions or GDP that is at issue.
ReplyDeleteIf that was the case, the $200B of sub-prime could have been mopped up easily...
Public,
ReplyDeleteI do not mean to belittle the problem. The debt in Europe is problamatical for most european banks and a few of ours as well. But it is pretty plain vanilla debt, much with long maturities. With reasonable restructuring and political responsibility from governments the problems are manageable, IMO. This is nothing new. Much of Latin America has gone through similar problems with much weaker political underpinnings...and our markets survived and prospered.
I know we disagree on these things, which is fine. I will always respect your point of view...you very well may turn out to be correct.
John,
ReplyDeleteWe have no idea where the risks are in the global financial system. They are buried in central bank portfolios and back stops.
During the great moderation it was far easier to cope with Latin Am. The state of the global economy cold not be more different compared to the balance sheets and leverage of today.
I know I keep saying it but China is not going to save the world. In fact, it might turn out quite the opposite.