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Here Comes the Soft-Patch Talk
Here comes the “sell in May” & “soft patch” talk. 2013 has started out well for risk assets such as stocks, as many central banks (including Japan) have come to the “it will be enough” view. But key U.S. data have turned disappointing, and employment conditions in Europe remain poor.
Despite U.S. payroll revisions of +61,000 m/m to prior months and strength in construction, payroll employment rose just +88,000 in March (of which 20,000 were temp-help jobs). To be fair, the U.S. unemployment rate did fall to 7.6%, but this occurred as labor force participation continued to decline to 63.3% (which is not the type of move that is likely to scare the Fed).
Average hourly earnings were flat m/m in March, suggesting little wage pressure (ie, there’s still plenty of slack in the U.S.) The U6 “under-employment” rate continued to decline, but remained elevated at 13.8%.
March hours worked ticked up, however, so even with average hourly earnings sluggish, it looks like personal income found some support. Nonetheless, this is a report that the more hawkish FOMC members are likely taking a close look at - "muddle-though" growth, with QE, is more of the same, and does not require a dramatic change in course.
Strategas NYC Macro Conference
THIS WEEK: Strategas’ 7th Annual Global Macro Conference
Thursday, March 21st
New York City
America’s Manufacturing Renaissance – Norbert Ore, former Chair of ISM & Strategas’ Head of Proprietary Research
Market Structure in the 21st Century – Duncan Niederauer, CEO of NYSE Euronext
Endowments & Alternatives – Too Much of a Good Thing? – Larry Kochard, CEO of the University of Virginia’s Investment Fund; William Donovan, President of US Steel & Carnegie Pension Fund; and Richard Flannery, CEO of TIFF
The Prospects for American Energy Independence – Jason Bordoff, former Special Assistant to the President and Senior Director for Energy and Climate Change in the Obama Administration
China as a Sustainable Growth Engine – Sun Yu, Head of Network Research, China Confidential
Health Care Investing in an Affordable Care Act Era – Randy Simpson, Partner & Head of Health Care Research, Glenview Capital Management
Antifragile: Things That Gain from Disorder – Nassim Taleb, Investor, essayist, author of Fooled By Randomness