Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and 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 is 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 and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and '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 of the world's most popular & widely-read financial publications.

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

Saturday, 10 January 2015

US Unemployment Plunges to 5.6 Percent

Has QE actually...worked?

Over the last few years I've been having some "spirited" debate with the many US/global recovery sceptics - and those who despise the concept of "quantitative easing" - pointing to improving jobs gains as evidence that the US economy may steadily be building strength.

The US remains, after all, the world's most powerful economy - and therefore it's kinda important.

For these reasons I always look forward to payroll employment reports with a little trepidation, lest the news be too adverse!

No such worries this month, though, as US payrolls added jobs for a 51st consecutive month in December, extending a record which stretches all the way back to the 1930s.

Per the Bureau:

"Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing."

Total nonfarm payroll employment up 252,000

After a bumper month in November the economy added another +252,000 jobs in December.

More happily still the October figures were revised up from +243,000 to +261,000. And, even better, the November figures were revised up from +321,000 to a massive +353,000. 

Thus total revisions of +50,000 added a sweeter flavour to the monthly result of +252,000, which itself  had eclipsed expectations of +240,000.

Total nonfarm employment surpassed 140 million for the first time on record only in November and continues to rise.

This takes total jobs gains for 2014 close to 3 million new jobs in the calendar year on a net basis, at a shade over 2.95 million.

And this pushed average job gains in 2014 all the way up to a splendid +243,000 per month.

Unemployment plunges to lowest level in 6.5 years

The US unemployment rate has now plunged from 10.0 percent in 2009 to only 5.8 percent in November, and now just 5.6 percent in December.

This is the lowest rate in 6.5 years since 2008.

By the way, Australia may need to chop its interest rates by the looks of this chart, just as the US may be preparing itself hike its own interest rates up and away from the zero bound (wages growth permitting)!

The number of reported US unemployed fell by 1.7 million in 2014 to 8.7 million.

Weaker figures

The weak sections of the report - and every payroll report has them - included hourly earnings, which are only tracking at an anaemic +1.7 percent year-on-year after a negative month, and the participation rate which was clipped back to 62.7 percent (perhaps in a secular decline?).

Welcome to the recovery

2014 was the strongest year for total US payroll gains in 15 years since 1999. 

Generally one would expect that with such a rollicking pace of jobs growth higher wages should follow in time - and it is higher wages that are needed to help fuel consumption.

A grand report, overall. 

Hello recovery.