There Has Always Been Something Fishy With These Numbers

Good morning.

One measure of jobs came out this morning and … heavens! … the number of those newly employed … reported by ADP … beat economist estimates by a substantial margin.

But wait a minute! If we were already at “full employment” … how do we keep hiring? Well … there has always been something fishy with these numbers.

When I was in grad school, back around the time Moses was alive, I was taught full employment was an “unemployment rate” of 4%. In recent years, I read 5% is the number. But more jobs data (coming this Friday) is expected by some to lower the unemployment rate to 4.7%. So what should be (but hasn’t been) the result? Higher wages. We just don’t seem to have strong enough productivity to enable businesses to ramp up the paychecks. But higher wages (and higher inflation) could be coming soon.

Okay, that previous paragraph was pretty boring and I apologize … but employment numbers are something we want to keep an eye on … even if only so we can tell our lazy kids (or a brother-in-law) to get out there and look for a job. After all, there are plenty available.

Probably the most interesting articles I found this morning had to deal with the environment, as there is talk that gains seen in fuel economy might be scaled back a bit … and fuel standards might be moved back to what they were in previous years. That, in my view, would be a shame. Recently we made great advancements … and cars have become much more fuel efficient. But when it is claimed that pollution is really not a problem … and car manufacturers have bigger seats at decision tables … anything can happen.

I occasionally mention things that existed when I was younger. Well anyone close to my age certainly remembers seeing the smog circling Manhattan or the pictures of LA looking like present day Beijing. Relaxing standard seems to be the exact wrong way to go.

In my view, allowing oil companies and car companies to dictate our standards will have a devastating effect …

… for it may suffocate the gains that have been made.

Have a great day.

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management
610 Freedom Business Center Drive
King of Prussia, PA 19406
(610) 337-9230 ext. 6
wit@teamemerald.com

A Quick Look at the News
March 8, 2017

Joseph G. Witthohn, CFA | wit@teamemerald.com


… as of 10:15 AM today …

Employment continues to be one of our nation’s strong points … as more workers were added in February than many anticipated. But at some point, we will really be at full employment. What then? (Bloomberg)

https://www.bloomberg.com/news/articles/2017-03-08/adp-says-companies-in-u-s-added-298-000-employees-in-february

There was a big effort to improve the efficiency of cars with regard to fuel economy … but some of the goals might be pushed back … as automakers don’t really seem to want to make any forced changes (USAToday)

http://www.usatoday.com/story/money/cars/2017/03/08/gas-guzzlers-again-fuel-economy-rules-defended/98881504/

… but it is, of course, an important issue … as oil companies not only pollute … but have quite a record in being the cause of putting a substantial amount pollutants in the air (Bloomberg)

https://www.bloomberg.com/news/articles/2017-03-08/eight-fossil-fuel-majors-seen-polluting-as-much-as-the-u-s

Business travel can be stressful, but Artificial Intelligence (“AI”) might help. Travel issues? Use an online concierge. Don’t want to eat alone? There’s Tinder for diners. Nervous about presentation? Can’t help you with that one (BBC)

http://www.bbc.com/news/business-39139958

… there was, however, some thought that self-driving vehicles would reduce stress … but according to one poll … taking control out of our hands … will only add to our anxiousness (USAToday)

http://www.usatoday.com/story/money/cars/2017/03/08/poll-reveals-fear-travel-self-driving-cars/98881656/

Hey! You’re killing me! Who am I talking to? No, not my boss … but my dinner plate. It seems that most of our health problems are due to our diet … and more attention might need to be paid (Reuters)

http://www.reuters.com/article/us-health-diets-metabolic-casualties-idUSKBN16E2WR

… but there is one very disturbing trend that is developing … the increase in arthritis. But while expected among the elderly … the concern is how it is affecting … in greater numbers … those in their middle years (CNN)

http://www.cnn.com/2017/03/07/health/americans-with-arthritis-at-all-time-high/index.html

Your state budget has some … so what should you do? Cut spending? No … not politically smart … so let’s increase liquor sales … casino openings … and legalize pot. That will work. Sure it will (Time)

http://time.com/4694670/pennsylvania-marijuana-legalization/

… but making a plan is not the same as implementing it … as Canada just found out. The country legalized marijuana, but lighting up may still be some distance away (TheGlobeandMail)

http://www.theglobeandmail.com/globe-investor/investment-ideas/marijuana-stocks-drop-as-trudeaus-pot-czar-says-canada-wont-rush-into-legalization/article34230589/

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