What does April's job report tell us?
Eugene Profit and Todd Schoenberger opine on the gloomy monthly jobs report
- Duration 10:17
- Date May 4, 2012
Eugene Profit and Todd Schoenberger opine on the gloomy monthly jobs report
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So let's talk about these jobs numbers with Eugene prophet who's a portfolio manager with profit investment management and he joins us from our Washington.
Newsroom good to see you and I understand you you have a history as professional football player before you got into the financial services industry so.
You know we're gonna look back some heads here -- talk a little bit about.
About the the jobs numbers and when you look at these numbers so we see the eight point -- so that's a tick in the right direction.
But the number of jobs a number of new jobs created -- -- pretty paltry.
100 151000 what is it telling you.
Well that -- a -- current economy and our economic environment essentially.
On the only good news that I -- employment numbers -- -- the other 5354000.
For the past three months looks pretty much puts that.
Armed and trend line I think you actually are getting a little bit of an adjustment back from good weather earlier in the year.
And you're saying that the economy although it's improving it's improving very slowly.
All BC services.
Are up a little bit -- be -- here but manufacturing is his way down so.
Net net I think more the same we're gonna models for.
What does that mean -- if we're looking you know because obviously everybody wants and how this is gonna affect.
The election in November and the thing that I keep reading is that no president has ever won reelection.
With unemployment higher than seven point 2%.
I don't think anybody thinks that there's a chance that the unemployment rate.
Will drop almost a full point between now and Election Day but where do you see it through muddling through.
A month over month over month as we get into the fall what what's it looking like to you.
Well I think that essentially the stock market has actually done okay over the past.
On eighteen months to three years right and so the wealth effect overall this is relatively good the US consumer.
As for the most part been strong inside -- jobless numbers you did see.
On the hiring and -- his bills being I'm okay even though you look at the retailers.
They're missing their earnings over the the past these few days you're correct no president has won -- -- unemployment rate -- highest unemployment rate is currently.
But we've had a little bit of a structural change.
On in our economy -- coming off.
Second only to great depression and so I I think as long the stock market holds up and done collapse.
The sitting president has a reasonable chance of being reelected the first one elected with that -- unemployment rate.
He would be making history the first one since FDR back in the great.
You know I just wonder when -- have people obviously if -- if you're that the president United States.
You're gonna take the credit when things go good -- you're gonna get -- when things are not so hot.
The policies of a sitting president -- an administration.
How can they affect.
You know sort of you know the the unemployment a lot people are quick to say that.
That -- Obama care that the health care law.
Is something that has really had a negative impact on jobs growth because a lot of employers out there.
Don't want to take on the added costs.
That Obama care -- brings when it comes to having to employ people and that that's a disincentive.
For companies to hire -- you see it that way and how how how big liberal do you think.
The president has had on the job situation that we've got today.
Well I think the most important issue is confusion over or policies and -- confusion over what the economic environment is this going to be on your correct that foam did it -- calls level obamacare.
Is that negative on the attribute to employers look in the higher.
But employers have business owners a Smart how we've had three years.
These policies specifically come in a place in business owners will just -- in fact that does become you know the law of the land and ruled the day.
I the president actually has on the pulpit to basically help -- -- a positive environment around our economy around our stock market.
And I think that that.
You'll see more of that as we move closer towards November more over -- reflection on.
On the fact that we don't have been in a bull market albeit not a strong bull market we did come off.
Of a very on -- based on certainly.
-- we will like a more -- growth.
There is a lot of device that this around the country with respect to policies on either side with a liberal or conservative.
But I think net net.
If you look bump at the US consumer vs what's going on -- the rest of the world.
Home you know we're not doing so bad we're not doing as well as we've done historically regarded -- -- Europe.
Absolutely and I think that that's actually I'm gonna be a major factor over next three months the mean a lot of the stock market trend.
Has been very similar last year were coming to the summer months where.
I'm -- became a major factor alone which would.
Greece are about to have another election there that might have some impact on the market as recently -- next week.
On the -- trying to GDP growth has been slowing albeit slightly you might see some dignitaries in there so I think that those are some positive that might play.
Into the administration's hands but you know net net it has been -- very confusing environment to be an investor and certainly to be a business owner.
And that uncertainty -- -- is gonna is gonna stick around until after the election right.
I mean yes and well people want us want to know who the next president's going to be talk about uncertainty there's probably no greater uncertainty than that.
That's correct and an equally as important.
What the next congress don't look like because.
You know -- -- current environment where almost no matter what happens within our economy.
Com -- that congress is -- divided that almost nothing gets done.
And essentially if we have the same thing.
I'll -- selection you're -- have a little bit more this thing and we have some structure issues that we really have to deal with for prospective.
-- Social Security the deficit and the debt sold I hope that all mean the ballot box in November is gonna feel very big indicator.
-- what the next few years are gonna look like but.
Bomb unless we get on some common ground we're gonna have a pretty difficult time dealing with these issues.
I didn't mention -- let me -- let people know that they can find you on Twitter your -- is that.
The number four.
And with -- the last thing like profit you really had no choice but to get out of football.
-- get into the investment business.
So good for you to figure that out thanks so much for joining us it was good to talk to wanna get another take on this -- -- Berger is a managing principal at the black big group.
And and he went through you had to jump through some hurdles to get to.
Have to deal with today such an active day well we're glad you're here thank you and now and we've been talking with Eugene about.
The jobs numbers that are out and I'm sure you've seen that the headlines what's your take away.
They're awful on the bottom line is I mean look cute you can look at 70% of all jobs created in this country over the last six months -- of the low income variety.
You look at -- jobs and retail hospitality and leisure.
This is an economy that is in desperate need of organic growth are not going to get that -- low income jobs so therefore moving forward it's great to weave a positive trend.
But realistically you're looking at three in a 42000 people have left -- the job force are looking for employment.
They can't find it the average hourly earnings number let's look behind the curtain of today's report.
You're looking at 2% growth here every year adjusted for inflation those lucky enough to even have a job or are losing -- spending power -- Point was though that look.
It's not great but it's it's a lot better than what's gone on in Europe you know that we're actually doing OK compared to other world market.
It's -- -- combine that lets be honest just caught what it is and you can I do.
200000 plus in December January February 120000.
-- -- the month before and -- last month C a 1151000.
I don't care what the revisions are.
This is not good for the United States economy right now GDP is trending.
At one point 7%.
And Ben Bernanke still does not have enough octane right now could justify any further accommodation so stock market sounded am surprised or not down further out from today.
But -- it's going to be a long one.
Do you -- as we were talking with Eugene about the stock market the market doing.
You know fairly well right over the last couple of years in spite of this week weak growth.
Right well first of all first quarter traders were were think -- we're gonna have further accommodation from Ben Bernanke.
He's never gonna overlap monetary policy news so we already know that operation -- is gonna have to come to an end.
Which is the end of June before he can do any further accommodation.
We don't see that happening anyway because keep in mind.
You still like I said of one point 7% GDP -- it's trending right now offer today's stayed out.
It's still not enough to justify further accommodation so he can't go to congress right now.
And therefore what the answer your question about the markets markets -- rallying with hopes of further accommodation now we're down right now because we don't think that this number is bad enough.
To get Ben Bernanke to do anything.
You do you and respond to what you hear from talked.
-- exactly right the the -- not bad enough for more quantitative easing and home while I agree.
-- -- GDP print a one point 7%.
Is that -- our normal trend up with a 3%.
But is what has been at -- fact that -- -- Why you're talking about of the jobs being created.
Or at the lower into the spectrum.
-- in the financial service -- sector.
There's still some very high jobs that are being created and that my client heroin made -- -- -- in the big grip make one other quick point real quick when you look at.
-- what's actually being sold in the US and what US economy.
Has been made aware buying ipads.
We're by consumer goods in the -- those manufacturing jobs are being done.
On in -- we've transitioned to a service economy all right we're just gonna have to make that is just talk final thought.
-- few -- right however on Wall Street we lost 240000.
Jobs last year we're looking to lose another 290000.
This year -- the most pessimistic people on the planet right now.
Because we know that her outlook is not -- it's now looking that.
Eugene -- BM -- you -- respect everything -- -- but things are now looking good for the immediate future.
Not -- -- managing principal of the black big group.
-- profit portfolio manager manager at profit investment management on Twitter at work he -- John thanks so much good to talk.