Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Saturday, 9 May 2015

US unemployment falls to 7-year low

223,000 job gains in April

The Bureau of Labor Statistics released its nonfarm payroll figures for April 2015 which showed a pleasing 223,000 jobs added in the month.

However, the equivalent figure for March was revised down from 126,000 just 84,000 which took some of the gloss off the result.

The hiring slowdown in March was attributed to a West Coast port strike which apparently played havoc with supply, compounded of course by ordinary winter weather.

The optimistic viewpoint is that April possibly saw a rebound.

As my chart below shows payroll gains have punched at above 200,000 in 13 of the past 14 months.

Cumulatively total nonfarm payroll employment continues its six year recovery to a total of 141.3 million from a 2009 nadir of well under 130 million.

The slowdown in the first quarter means that average monthly payroll gains across the 2015 year-to-date are now tracking at 194,000, which is some way below the impressive average of 259,000 per month experienced across the 2014 calendar year.

The unemployment rate ticked down to 5.4 per cent, being the lowest level in seven years.

Despite a continued decline in mining employment (-15,000) further job gains were recorded in construction (+45,000), health care (+45,000), transportation and warehousing (+15,000), and professional and business services (+62,000).

The missing link continues to be wages growth. 

In April, average hourly earnings for all employees on private nonfarm payrolls rose only by 3 cents to $24.87, with average hourly earnings up by 2.2 percent over the past year.

However, the recently released Employment Cost Index showed wages costs up by 2.6 per cent which is the strongest gain since 2008.

The wrap

Strong payroll gains and projected rate hikes in the US have the potential to help the Reserve Bank in Australia as the strengthening of the greenback helps to improve our export prices.

This result was somewhat neutral in this regard.

Despite the strong headline result the revision to the March data combined with soft wages data suggests that the first rate hike in the US is still likely to be some months away. 

Analysts continue to watch for signs that the US is approaching full employment, but the soft wages data suggests that there is a little way to go yet.