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Employment Growth Continues

CAMS Weekly View from the Corner – Week ending 12/8/2017

December 11, 2017

This past Friday the Bureau of Labor Statistics (BLS) informed us the employment market posted an increase of 228,000 new jobs created in the month of November.  This exceeded the collective expectations of 195,000.  With this the labor market continues to experience consistent growth.  At the same time said consistency is lacking the ability to break higher out of the high one hundred to low two hundred thousand range.

The above chart depicts the monthly levels of employment growth for the previous twelve months.  The November tally reflects the third highest for the period depicted whereby February and October marginally exceeded the current result.

General precursors of employment growth have been and continue to point to solid consistent growth which is crucial in light of our absolute need for economic growth to support elevated asset prices.  Our on-going vigilant watch remains looking for any signs of growth issues knowing full well said asset price levels are extremely vulnerable if employment, wage and general economic growth were to shrink or retrench via recession.

In the name of said vigilance the above chart is catching our attention although at this stage is not yet a significant concern.  The trends depicted reflect the amount of new jobs created over the previous twelve months which gives us a rolling trend.  For example, in our previous twelve months we have created just over two million jobs.

The far right shows that our recent experience has been trending downward from a peak level in early 2015.  The observation point here is historically downtrends have been early indicators of coming recessions.  Importantly, this is not a perfect indicator but perfect indicators do not exist so we watch many with open minds as to their collective message.

The downtrend depicted above does catch our attention but as of now is not yet ringing alarm bells of a coming recession.  We emphasize elevated markets and recessions do not get along well hence our focus on any potential sign of on-coming recession.

I wish you well…

If you missed our last webinar, you’ll find the presentation materials below as well as a link to the full presentation replay.

Ken Reinhart

Director, Market Research & Portfolio Analysis

Portfolio Manager, CAMS Spectrum Portfolio


H&UP’s is a quick summation of a rating system for SPX9 (abbreviation encompassing 9 Sectors of the S&P 500 with 107 sub-groups within those 9 sectors) that quickly references the percentage that is deemed healthy and higher (H&UP).  This comes from the proprietary “V-NN” ranking system that is composed of 4 ratings which are “V-H-N-or NN”.  A “V” or an “H” is a positive or constructive rank for said sector or sub-group within the sectors.

This commentary is presented only to provide perspectives on investment strategies and opportunities. The material contains opinions of the author, which are subject to markets change without notice. Statements concerning financial market trends are based on current market conditions which fluctuate. References to specific securities and issuers are for descriptive purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. There is no guarantee that any investment strategy will work under all market conditions. Each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. PERFORMANCE IS NOT GUARANTEED AND LOSSES CAN OCCUR WITH ANY INVESTMENT STRATEGY.

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