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TrimTabs
- Press Release - Aug 11, 2004
Santa
Rosa, CA – August 11, 2004 – Gloomy reports about
the U.S. economy continue to dominate the financial media. This past Friday,
the U.S. Bureau of Labor Statistics (BLS) reported that only 32,000 jobs
were created in July. These results were far below consensus expectations.
As we reported in this week’s issue of TrimTabs U.S. Employment Update,
overzealous seasonal adjustments were primarily responsible for the weak
results. According to TrimTabs’ year-over-year analysis using non-seasonally
adjusted data, 143,000 jobs were created in July. Our results are congruent
with wage and salary growth of about 5% year-over-year that we have measured
recently. While wage and salary growth slowed from mid-May through mid-June
from its torrid pace earlier this spring, it has rebounded since mid-June,
which suggests that the labor market is holding up relatively well. Other than the threat of a major terrorist attack, two other negative factors concern us. First, crude oil prices surpassed $45 per barrel during this past week. If crude oil prices remain elevated, prices for gasoline and consumer goods will rise as well, slowing economic growth. Second, overwhelmingly negative headlines in the financial media have successfully planted all sorts of fears in the minds of investors. While U.S. equity fund inflows have held up relatively well over the past few weeks given the lousy performance of the stock market, bearish sentiment can often gain momentum regardless of economic fundamentals. As long as we continue to measure healthy wage and salary growth, an improving labor market, solid manufacturing growth, low interest rates, credit expansion, and increasing corporate investment, we expect the economy to continue chugging along no matter what the headlines claim.
This Week’s
Summary:
Madeline Schnapp is Editor of TrimTabs Personal Income and TrimTabs Employment Update. She is a frequent speaker in the financial industry, most recently presiding at the National Association for Business Economics (NABE) and the American Association of Independent Investors (AAII). TrimTabs Investment Research provides portfolio managers and market strategists with macro-timing tools which consistently prove to be reliable indicators upon which to base trading and investment decisions. See www.TrimTabs.com for trial subscription options.
CONTACT:
Charles
Biderman |