Posts filed under “Data Analysis”


Yes, its that time again: Another non-farm payroll has rolled around.

Consensus is for 205,000 new jobs. As I did last month, I am taking "the Over." The strength of the financial sector, retail, food services and construction are the basis for the call. I continue to note the general quality of jobs, which have been lower paying and offer less  benefits than the jobs they replace. Construction jobs, which were very strong Q1, do offer above average pay. We have also seen a substantial rise in hiring in the financial sector (with strong salaries and benefits). 

Two interesting data points on NFP:

According to today’s NYT, the financial sector accounted for more than one-third of the wages paid in the New York City, yet it provides just one of every seven jobs. That’s an amazing stat. The Times also notes a "surge in hiring on Wall Street is driving the economy of New York City and the surrounding region, but the pace of growth still lags behind the national rate…"

The second tidbit comes our way from Slate’s Moneybox columnist, Dan Gross, who notes that "Payroll company ADP and Marcoeconomic Advisers, the well-respected economic consulting firm, have got together to crunch data from adp’s payroll business and estimate the BLS job creation number. They’re saying 178K for April."  You can read all about this new venture in their press release.

The WSJ’s Justin Lahart looks askance at this new report about the report. While we may enjoy that each month’s NFP report "give investors new opportunities to roll their eyes about monthly economic forecasting," (I plead guilty!) Lahart writes in Job-Watcher Watchers

"One has to wonder about the value of reports that predict what reports might say. Instead of forecasting hard-to-predict wiggles in a monthly jobs report, it would be nice to know what is actually happening more broadly in the economy. Maybe their bosses should cut the economists a break from the guessing game."

He’s referring to the folly of forecasting — and unless you can reliably forecast the numbers, it behooves us to remember that the guessing game (guilty again) is just that — a game, an excercise — and it needs to be taken with a grain of salt.

Understanding what is actually going on in total is much more important to investors than guessing what a model generated report, subject to revisions and recalculations, might say . . .

That said, I’m sticking with the Over.

UPDATE:  May 5, 2006 9:33am

So much for the over: Wow — 138,000 — thats some miss.

The underlying data is mixed:  Average hourly earnings rose at a 3.8% annual rise, the fastest annual gain since August 2001. Unemployment rate was unch. The workweek rose to 33.9 hours (from 33.8 in March), while overtime fell to 4.5 hours (from 4.6
hours in March).

Bloomberg suggested that "the slowdown in hiring suggests record gasoline prices and rising borrowing
costs are forcing companies to rein in costs to maintain profits."

Wall Street Hiring Propels Increase in Jobs in the New York Region
NYT, May 5, 2006

Job-Watcher Watchers
May 5, 2006; Page C1

Category: Data Analysis, Earnings, Economy

A few words about Microsoft

Category: Corporate Management, Data Analysis, Technology, Weblogs

Existing Home Sales Data (California Real Estate: On Sale!)

Sales of existing homes surprised to the upside yesterday. But one data point does not make a trend. This is the first rise (sequential monthly change) after 5 straight months of falling Home Sales. And that’s before we examine the data.

Before you declare the end of the housing slow down, consider:

- Existing Home sales actually slipped vs. last year by -0.7%; The reported gain was over last month’s data;

- the Inventory of unsold homes soared 7 percent in March, hittting an all-time record; There are now 3.19 million existing homes for sale, or  5.5 months’ supply; That’s the largest inventory since July 1998

- Existing homes edged up 0.3% last month to a seasonally adjusted annual rate of
6.92 million units; (we know that seasonally adjusted data is not always accurate)

- Year over year, the Northeast and Midwest gained, while the previously hot housing markets in the South and the West slipped;

- median home prices are still rising, albeit nmore slowly — up 7.4% year over year, to $218,000.

Here’s a data point that has me scratching my head:  Why are there different numbers for the year-over-year changes for seasonally and not seasonally adjusted?  Was this March somehow in a different season than last year’s March? I am perplexed.

Note that data for existing home sales comes from National Association of Realtors, a group that is certainly an interested party; Of course, as a homeowner, investor, and someone with a public bearish tilt for the second half, I’m hardly objective myself (hey, I try). But this oddity — down -0.5% for the not seasonally adjusted year over year versus down -0.7% for the seasonally adjusted year over year — is beyond my comprehension.

So much for the hard data on existing sales; Today, we get New Home Sales. Recall our prior admonishments that monthly New Home Sales Data are unreliable; look instead to a moving average.

Let’s move onto some anecdotal evidence.  A friend writes:

"Flop! Wow, KB running blue light specials in California. Not surprising,
Chico area was rated one of the most overvalued markets in the country. Houses
in the $200k space.  When was the last time you saw that in California? "

Oak Knoll Place Live Oak, CA

Oak Knoll Place Slideshow

Here’s the sales pitch:

"Oak Knoll Place in Live Oak is located in a beautiful
community near the majestic Sutter Buttes. With easy access to Highway 99, it is
ideally located for easy access to Sacramento, Lake Tahoe, Reno and a wide
variety of recreational opportunities. Yuba City and Marysville are
approximately 10 minutes south, Chico is approximately 35 miles north and the
Gray Lodge Wildlife area is approximately 10 minutes west. Live Oak has a
quaint, small-town atmosphere with many nearby recreational water activities,
including the Feather River, Yuba River and Sacramento River. Prices starting
from the High $200′s.

I don’t know Live Oak, but houses like that in California are hard to imgaine . . .

More after the jump.

Existing-Home Sales Rise Again in March
WASHINGTON (April 25, 2006)

Existing Home Sales  data


Read More

Category: Data Analysis, Federal Reserve, Fixed Income/Interest Rates, Real Estate

More evidence: Fed Pause Not Good For Stocks

Category: Data Analysis, Economy, Federal Reserve, Investing

Unemployment: Then versus Now

Category: Data Analysis, Employment

Do We Have Inflation?

Category: Data Analysis, Federal Reserve, Inflation

Will the US Economy Decelerate Rapidly as Boomers Retire?

Category: Data Analysis, Economy, Federal Reserve

Did the Yield Curve Send a “False Alarm?”

Category: Data Analysis, Economy, Federal Reserve, Fixed Income/Interest Rates, Inflation, Investing, Markets

Q1 Performance versus Q2-Q4: Any Correlation?

Category: Data Analysis, Markets, Trading

Fed Gets New Excuse to Keep Tightening Rates

Category: Data Analysis, Employment, Federal Reserve