TrimTabs Investment Research is estimating meager job growth in August ahead of tomorrows non-farm payrolls report. In short, the economy remains weak, job growth is barely keeping up with population growth, but we’re still growing. All this likely means any Fed “tapering” will be meager at best. Here’s more via TrimTabs:
TrimTabs Investment Research estimates that the U.S. economy added 79,000 jobs in August, up from its estimate of 23,000 jobs in July.
“Employment growth remains disappointing,” said David Santschi, Chief Executive Officer of TrimTabs. “The economy added an average of 111,000 jobs in the first eight months of this year, which does not even keep up with population growth.”
In a research note, TrimTabs attributed the weakness in the labor market to higher borrowing costs in general and plummeting mortgage refinancing activity in particular.
TrimTabs’ employment estimates are based on an analysis of daily income tax deposits to the U.S. Treasury from all salaried U.S. employees. They are historically more accurate than the initial estimates from the Bureau of Labor Statistics.
TrimTabs also reported that wages and salaries increased only 0.7% year-over-year in real terms in August, which is the second-lowest level this year, excluding the distortion in February due to bonus shifting.
“Any ‘tapering’ by the Fed later this year is likely to be very modest,” said Santschi. “Not only is economic growth weak, but investors pulled a record $129 billion from bond mutual funds and exchange-traded funds from July through August.”
Source: TrimTabs Investment Research
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.