The labor report last week contained some very encouraging news in addition to better than expected overall job growth. As the following chart displays very well (courtesy of Scott Grannis at Calafia Beach Pundit), we are experiencing sharp growth in private sector jobs and a persistent decline in public sector jobs. This is a fundamentally positive development with ramifications for the broken U.S. fiscal policy. Jeb Terry, Sr. February 7, 2012
The monthly surveys by the Institute of Supply Management are showing significant improvement over 2011. The economic shocks last year from the Arab Spring induced spike in energy prices, the Japanese tsunami and the prolonged European debt crisis stunted business activity here in the U.S. The following charts reveal the degree of recovery taking place. This is all consistent with improving macro-economic metrics and the recent strength in the equity market. Jeb Terry, Sr. February 5, 2012
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The increase in the number of employed persons reached the highest sequential gain of this recovery. Not since Mar. 2003 have we seen as strong a sequential increase in the number of employed (according to the household survey by the BLS) either in absolute or percentage terms. The increase was the 7th month in a row which hasn’t occurred since early 2007. It now appears that employment growth is reaching a “fly wheel” moment where growth can beget more growth. The following chart shows the trailing 12 month growth in people employed. There remains room to grow before full employment is reached. . Jeb Terry, Sr. February 5, 2012
While the growth in the number of people employed is encouraging, the following chart shows there remains huge excess labor capacity in the economy. 12.76 million people remain unemployed which would be a record high in any other time than recent years.