“Davidson” submits:
The Household Survey was reported at 139,627,000 or 331,000 higher than July 2011 continuing the trend since Jan 2010. This week also saw the American Staffing Association’s ASA Temp Staffing Index remain firmly rooted at 88. The pessimism being exhibited by the markets this morning is not supported by these reports.
The Household Survey covers all businesses including those which are not covered by the ADP (payroll companies ex-government-108.85mill), Establishment Survey (payroll companies and government-131.2mill). The Household survey covers self-employed individuals which the other measures do not and this is where we typically witness employment growth as individuals who have left more traditional employment become entrepreneurs. There are between 9-10mill self-employed and it is this group which is captured only by the Household Survey. The 331,000 new jobs report while seemingly large comes from a 60,000 household telephone survey and have a statistical error of +/- 436,000. Clearly the error is larger than the actual increase or decrease for most months which have averaged a historical monthly increase of 141,300.
What is most important using this data is the trend over 6mos and the trends of associated employment measures. The trends of all the useful employment indicators remain on a positive track. Remember the economy lumbers; it does not wiggle from month to month. Only our data wiggles!! Keeping a longer term perspective makes for better investment decisions. It lets one remain positive when the world is crying that “the sky is falling” and it causes one to be cautious when the world eventually comes to believe that “a new day of economic prosperity that will last forever” has arrived.
The economy continues to move forward and stocks are undervalued historically $SPY .
