5 Incredible Charts Covering Gold To The “Surprise Index”
Today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 5 incredible charts illustrating covering everything from gold to the “surprise index.” Eric Pomboy, who is founder of Meridian Macro Research, and whose sister Stephanie Pomboy appears in Barrons, also provided tremendous commentary to go along with the 5 stunning charts, as well as what all of this means going forward.
Regarding Friday’s Payroll Report, things are not as rosy as the
headline data suggest. First, 195k jobs added sounds like a solid
number ... but it’s only 79k jobs above the (6mo. average) of Population
Growth. Second, if you look at the gap between U6 and U3 number of
unemployed (chart below), the monthly change was a staggering +786k
persons ... the largest monthly jump since December 2008 (+800k), thus
the rise in U6 rate from 13.8% to 14.3%.
Third (next chart), the number of full‐time employed dropped by ‐240k, bringing full‐time employed as % of Total Labor Force to 74.4% ... still in historically low territory and indicative of a very uneven labor force (full/part time) composition. In the last 3.5 years, 5.43 million full‐time jobs have been created. In order to reach a more ‘ideal’ 79‐80% over the next 4 years (factoring‐in population growth), we’d have to create about 12 million full‐time jobs, or 250k jobs per month ... which seems highly improbable. Considering full‐ time jobs dropped ‐240k and part‐time jobs jumped +360k for June, we’re clearly moving in the wrong direction.
Also, the total of Non‐Full Time employed is at a fresh historic high as of the June data...up +400k to over 28 million people. The takeaway from these numbers is: we could get to 6.5% (or even 5.5% or lower) headline U3 unemployment rate in the next few years, yet based almost entirely on part‐time job creation. None of this is good news, as quality of jobs is clearly more important than quantity....
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Today the man who provides macro research and commentary to many of the largest financial institutions and top hedge funds around the world sent KWN 5 incredible charts illustrating covering everything from gold to the “surprise index.” Eric Pomboy, who is founder of Meridian Macro Research, and whose sister Stephanie Pomboy appears in Barrons, also provided tremendous commentary to go along with the 5 stunning charts, as well as what all of this means going forward.
“The COT data for week
ending 7/2 show a 35% reduction in Net Commercial Position to ‐22,776
contracts ... the least Net Short reading since Jan 8, 2002 when gold
was $279/oz. With a Net Long reading not far off, a significant upside
reversal for gold is clearly in the works.
Third (next chart), the number of full‐time employed dropped by ‐240k, bringing full‐time employed as % of Total Labor Force to 74.4% ... still in historically low territory and indicative of a very uneven labor force (full/part time) composition. In the last 3.5 years, 5.43 million full‐time jobs have been created. In order to reach a more ‘ideal’ 79‐80% over the next 4 years (factoring‐in population growth), we’d have to create about 12 million full‐time jobs, or 250k jobs per month ... which seems highly improbable. Considering full‐ time jobs dropped ‐240k and part‐time jobs jumped +360k for June, we’re clearly moving in the wrong direction.
Also, the total of Non‐Full Time employed is at a fresh historic high as of the June data...up +400k to over 28 million people. The takeaway from these numbers is: we could get to 6.5% (or even 5.5% or lower) headline U3 unemployment rate in the next few years, yet based almost entirely on part‐time job creation. None of this is good news, as quality of jobs is clearly more important than quantity....
“The next chart reveals another disturbing
trend. Since 1989, manufacturing employment has declined ‐33% while
disability recipients have increased +265% .... an over 1 for 1 shift in
number of persons. At current pace, disability recipients will likely
exceed manufacturing employment within the next 5 years. We draw no
parallel between the two numbers (i.e. job losers in manufacturing have
sought disability claims), but merely want to illustrate the once
powerful manufacturing base in America has eroded significantly while
entitlements have soared. We do wonder how it is possible that in our
high‐tech (less‐physical‐labor‐reliant) world, disability claims could
accelerate at such an astonishing pace.
Lastly: With economic indicators moving back into the red (negative
readings indicate economic releases have missed consensus), there is
reason to believe the Fed will make a point to back off on any taper
talk at the next meeting ... perhaps as well highlight the negative
full-time employment picture as a concern. With lackluster economic
data (here and abroad) likely to continue, there is every reason to
believe global easing policies will proceed unabated and we may actually
see an additional “QE” variation on this chart sometime in the
not-too-distant-future.”