The March jobs report was bad.
The headline number was 98,000 versus Wall Street consensus estimates of between 180,000 and 200,000 jobs added for the month. We don’t really care about this number in isolation.
What matters is the year-over-year rate of change in the number of jobs created. That tells you the critical context: Is the labor market growing or slowing?
In the video excerpt above from The Macro Show earlier today, Hedgeye CEO Keith McCullough breaks down the rate of change.
“The non-farm payroll report has slowed from 1.65% in January to today’s 1.52% on a year-over-year rate of change basis,” McCullough says.
But what’s next? That’s what will move asset prices going forward.
"Whether you look at the ADP data or ISM Services, which has an employment component, or Jobless claims, all three of these numbers don’t look like these jobs report numbers,” McCullough says. Add in the fact that last year’s April and May jobs data was so poor and it’s increasingly likely that in the ensuing months growth in the U.S. labor market will pick up.
Watch McCullough in the video above to learn more about how this impacts your portfolio.
