Oil prices have caused some fears over future economic data, but based on prior economic reports it’s clear that it has not had any sort of meaningful impact (yet). Today’s economic reports were across the board strong and show that the US economic recovery is continuing:
- The Monster Employment Index jumped to 129 from last month’s reading of 122. This is consistent with a strong improvement in hiring demand.
- Jobless claims tanked to 368K. The 4 week moving average is 388K with three of the last four weeks have been sub-400K. This is another good sign for the labor market.
- Q4 readings for productivity came in at 2.6% while unit labor costs were at -0.6%. This is consistent with the high margin environment we have seen throughout recent earning seasons. Given the rise in revenues this data also gives merit to the likelihood of more hiring in the months ahead.
- ISM Services was better than expected at 59.7. New orders were flat, employment improved to 55.6 and prices surged to 73.3.
All in all, not much to be concerned about. The impact of higher oil prices may be felt in the coming months, however, the recent data confirms just about all of the trends of late. With a deficit of 10% of GDP the government is doing more than enough to offset the effects of de-levering.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.