Let’s start with the positives. The U.S. economy created 215,000 jobs in March, slightly above the 200,000 average forecast. Revisions to the past couple of months were negligible at minus-1,000, while average hourly earnings rose 0.3%. That was an improvement from the previous month’s 0.1% decline.
Looking a bit deeper, you find that the labor force participation rate ticked up slightly to 63% from 62.9%. Within industries, the retail sector added 48,000 jobs, construction added 37,000, healthcare added 37,000, and food service added 25,000.
So what’s the negative story here? Well, that job growth of 215,000 was a deceleration from 245,000 jobs in February. And the unemployment rate rose to 5% from 4.9%.
|A mixed picture when it comes to the U.S. employment situation.|
Plus, the manufacturing sector lost a whopping 29,000 jobs – the single-worst month for the sector since December 2009. Mining also shed another 12,000 workers, bringing cumulative losses since the September 2014 sector peak to 185,000.
The other data of the day was also mixed. The ISM Manufacturing Index rose to 51.8 in March from 49.5 in February, topping estimates. But construction spending dropped 0.5% in February, much worse than the 0.2% gain that was forecast.
Major automakers like General Motors (GM) and Ford Motor (F) also missed sales estimates in March. That underscores the “peak auto” risks I’ve been discussing for several months.
Bottom line? We’re still not getting an “all clear” or “look out below” signal from the job market data. But my research suggests we’re late in the credit and economic cycle. The problems in sectors like manufacturing, mining and autos also highlight the risks involved in investing in the wrong stocks, sectors and risky bonds at this point in the cycle.
So I’m doing several things now to help guide you through these treacherous and volatile market times …
First, I’m getting ready to unveil my new documentary, “The Unseen Hand.” It will explain what impact the presidential election and other powerful influences will have on the markets. Just click here to get registered, and to enter our Election-Year Sweepstakes.
Next, I’m sharing my thoughts about the recent action in gold, mining shares, and monetary policy in an upcoming special webinar titled “The Next Phase for Gold, and How to Profit from It.” It’s set for this coming Monday, April 4 from 2:00 p.m. to 2:45 p.m. EST. All you have to do is register online here, then tune in on Monday.
|“We’re still not getting an ‘all clear’ or ‘look out below’ signal from the job market data.”|
Then this summer, from July 10-17, I’m scheduled to take part in the 2016 Money, Metals, & Mining Cruise. Seven days at sea on board the Crystal Serenity. It’s a gorgeous trip from Anchorage to Vancouver, with stops in ports like Sitka, Skagway, and Juneau along the way. The trip features welcome and farewell receptions, dinners hosted by myself and fellow market experts, plus presentations, roundtable discussions, and Q&A sessions.
You’ll get all that and then some. So be sure to call 800-797-9519 if you’re interested in joining me on board. Or you can click here for more details.
Lastly, make sure you check out the latest issue of Safe Money Report. It just went to press yesterday, and contains a wealth of information and new recommendations.
Phew! I think I covered all the bases in these busy times. Now, I’d love to get your views on the latest jobs news.
Do you think the labor market is doing better or worse? Are companies in your area (or your employer) hiring more aggressively? Or are they starting to cut back? What do the latest labor market trends mean for stocks, bonds, and currencies? Let me know in the discussion section here at the website.
Meanwhile, in response to earlier columns my colleagues and I wrote, you shared opinions on currencies, stocks, central bank policies, and more.
Reader Mike was pessimistic about the market, saying: “The price-to-earnings ratio of the stock market is overpriced right now. Only a fool would invest in overvalued stocks, and also overvalued real estate, such as New York or San Francisco, just to mention a few areas.”
Reader Badger10 shared his thoughts on both the recent rally and the longer-term outlook, saying: “This was a big strong rally even though the leaders were defensive stocks. I agree with you that this was not good leadership. Market topped out yesterday and should come back down to a more reasonable level. With the amount of debt built up by ZIRP, it is possible a bear market looms ahead.”
And Reader Chuck B. cited investor confidence as a key problem, offering this take: “If 28.7% of Americans expect the stock markets to rise over the next year, that means that 71.3% expect them to fall, or remain even. That doesn’t seem to reflect much confidence by consumers in this country. How many investors will remain active in the markets if they are that pessimistic?”
As for recent central bank action, and its impact on markets, Reader Joe said: “Since when is the U.S. central bank supposed to be concerned about the economy in any other country other than the U.S.? Why is this fraud Janet Yellen basing policy on China?
“The Fed, like socialism, has over a century of failure. Yet it bumbles on, doing everything it can to keep the banks afloat, no matter the damage to the ordinary American. End the Fed!”
Lastly, Reader Myron M. shared the following gloomy outlook (on everything but precious metals): “Given the unprecedented levels of debt on a world scale, it seems to me the fractional reserve banking system is rapidly reaching a point of no return and potential collapse. It is a recipe for perpetual debt that is spiraling out of control and desperately needs to be restructured.
“Consequently, I have been investing in junior gold and silver miners with proven reserves and professional management. I have had numerous doubles in the past year and in the past three months at least seven stocks up 25% or better, which annualized equates to more doubles on the horizon.
“I won’t be surprised to see a 50% stock market meltdown before the end of the year and a consequent doubling or better of precious metal prices. Only gold and silver are honest and reliable money that can’t be printed into existence at the whim of clueless politicians and bureaucrats.”
I appreciate all the comments. And I agree that many of the world’s central bankers are out over their skis, trying an ever-increasing array of less and less effective policies. That’s a key reason why investors are turning to alternative stores of value like gold, which just racked up its best quarterly performance in three decades.
If you have any other comments I didn’t cover, feel free to add them in the discussion section below.
We’ve been hearing rumors about oil production agreements every few days for the past couple of months. They always get energy traders excited. But there may be less to any deal than meets the eye.
I say that because Saudi Arabia’s deputy crown prince Mohammed bin Salman told Bloomberg today that his country won’t freeze output unless everyone else does. That includes Iran, which has already said it won’t take part in any agreement. Major Middle East producers are meeting in Doha, Qatar, on April 17 to see if they can work things out. So keep that date on your calendar if you invest in the energy sector.
Buying up trillions worth of government bonds has dramatically reduced liquidity in that market. Now, the European Central Bank’s plan to Hoover up billions of corporate bonds could have a similar impact in that part of the market. At least, that’s the opinion of this columnist at Bloomberg … an opinion I happen to agree with.
The upstart carmaker Tesla (TSLA) has rolled out its first mass-market electric car, the Model 3. The five-seater sedan will carry a price tag of around $35,000, and should have a range of around 215 miles per charge. Customers won’t actually get their hands on pre-ordered cars until late 2017.
Do you think OPEC and non-OPEC producers will be able to come to a real agreement later this month, and will it help support oil prices? What about the ECB’s corporate bond buying plan – will it make things better or worse in the markets? And have you placed your order for a Tesla Model 3 yet … or are you planning to stick with gasoline-powered vehicles for the foreseeable future? Hit up the comment section below and let me know.
Until next time,