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STOCK MARKET WATCH -- Friday, 16 October 2015
[font size=3]STOCK MARKET WATCH, Friday, 16 October 2015[font color=black][/font]
SMW for 15 October 2015
AT THE CLOSING BELL ON 15 October 2015
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Dow Jones 17,141.75 +217.00 (1.28%)
S&P 500 2,023.86 +29.62 (1.49%)
Nasdaq 4,870.10 +87.25 (1.82%)
[font color=black]10 Year 2.01% 0.00 (0.00%)
30 Year 2.86% 0.00 (0.00%) [font color=black]
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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
Market Updates
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]
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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
[/center][font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts
08/03/15 Former City (London) trader Tom Hayes found guilty of rigging global Libor interest rates. Each fo eight counts carries up to 10 yr. sentence.
08/21/15 Charles Antonucci Sr, former pres. Park Ave. Bank sentenced to 2.5 years in prison for bribery, fraud, embezzlement, and attempt to steal $11MM in TARP bailout funds, as well as $37.5MM fraud on OK insurance company. To pay $54MM in restitution and give up additional $11MM.
09/21/15 Volkswagen CEO Martin Winterkorn apologizes for VW cheating on air quality standards with emission testing avoidance device. Stock drops 20%, fines may total $18B.
09/22/15 Stewart Parnell, CEO Peanut Corp. of America, sentenced to 28 years in prison for selling salmonella-tainted peanut butter that killed nine.
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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]
41 replies
= new reply since forum marked as read
= new reply since forum marked as read
http://www.bloomberg.com/news/articles/2015-10-12/putin-bets-on-germany-as-gas-ties-with-turkey-go-sour-over-syria
It’s taken less than a year for Russian President Vladimir Putin to go from hailing Turkey as a potential linchpin in natural gas supplies to Europe to shunning it. As the nations fall out over the conflict in Syria, Moscow-based Gazprom PJSC, the world’s largest gas producer, said last week it would cut the capacity of a planned link to Turkey and on to Europe by 50 percent. Turkish President Recep Tayyip Erdogan warned Russia last week that energy cooperation could suffer because of the former Soviet nation’s violation of his country’s airspace and military buildup in the region. That’s a far cry from last year, when Putin said Turkey could become an energy hub for southern Europe as the proposed link under the Black Sea would help Russia reduce its dependence on gas transit via Ukraine, the current route for more than 10 percent of Europe’s gas.
Putin feels able to change tack on Turkey, the second-largest customer for Russian gas, because in September he agreed to expand the Nord Stream pipeline that links Russia directly with Germany.
I'M SURE AS SOON AS THE MADMAN ERGODAN IS SHOWN THE EXIT, NEGOTIATIONS WILL RESUME. PUTIN IS NOT ONE TO BABY A FOOL (OBAMA, TAKE NOTE)...DEMETER
Russia relies on oil and gas for about half of its budget earnings and is adept at mixing its energy policies with political aims. It stepped up energy cooperation with Turkey and China last year as relations with the EU and the U.S. soured over the Ukraine conflict and profits from gas sales in Europe slumped on weaker commodity prices. Europe receives about a third of its gas from Russia with a third of that volume flowing through Ukrainian pipelines. Gazprom aims to end or at least cut its gas transit through the former Soviet republic after the current transit contract expires in 2019.
Putin said last year that the new Turkey route would help Russia to meet this goal. After talks on the link stalled over the summer, Gazprom said that the Baltic Sea link directly to Germany known as Nord Stream-2 was a priority. Putin’s bet on Nord Stream-2 is risky as the project may face opposition in the EU, De Jong said. EU Energy Commissioner Miguel Arias Canete said last week the link risked concentrating 80 percent of the bloc’s Russian gas imports on one route while eastern European nations have also warned of the risk of circumventing Ukraine. Gazprom said Tuesday that key markets for Nord Stream-2 are boosting gas purchases from Russia, with total European exports in early October gaining almost 36 percent from last year’s level.
*****************************************************
While Nord Stream-2 doesn’t need to be approved by the European Commission, the onshore network may face legislation and political obstacles. Gazprom faces similar problems with the Opal gas pipeline in Germany linked to the existing Nord Stream, which can use only half of its capacity because EU rules require access for competitors.
THE EU WOULD HAVE TO BE SUICIDAL TO FREEZE OUT EUROPEANS...
It’s taken less than a year for Russian President Vladimir Putin to go from hailing Turkey as a potential linchpin in natural gas supplies to Europe to shunning it. As the nations fall out over the conflict in Syria, Moscow-based Gazprom PJSC, the world’s largest gas producer, said last week it would cut the capacity of a planned link to Turkey and on to Europe by 50 percent. Turkish President Recep Tayyip Erdogan warned Russia last week that energy cooperation could suffer because of the former Soviet nation’s violation of his country’s airspace and military buildup in the region. That’s a far cry from last year, when Putin said Turkey could become an energy hub for southern Europe as the proposed link under the Black Sea would help Russia reduce its dependence on gas transit via Ukraine, the current route for more than 10 percent of Europe’s gas.
Putin feels able to change tack on Turkey, the second-largest customer for Russian gas, because in September he agreed to expand the Nord Stream pipeline that links Russia directly with Germany.
“Putin is betting on Nord Stream, but that bet is risky," Sijbren de Jong, energy security analyst at the Hague Centre for Strategic Studies, said by e-mail. "Can Gazprom really afford to annoy Turkey and forgo gas revenues? Hardly."
I'M SURE AS SOON AS THE MADMAN ERGODAN IS SHOWN THE EXIT, NEGOTIATIONS WILL RESUME. PUTIN IS NOT ONE TO BABY A FOOL (OBAMA, TAKE NOTE)...DEMETER
Russia relies on oil and gas for about half of its budget earnings and is adept at mixing its energy policies with political aims. It stepped up energy cooperation with Turkey and China last year as relations with the EU and the U.S. soured over the Ukraine conflict and profits from gas sales in Europe slumped on weaker commodity prices. Europe receives about a third of its gas from Russia with a third of that volume flowing through Ukrainian pipelines. Gazprom aims to end or at least cut its gas transit through the former Soviet republic after the current transit contract expires in 2019.
Putin said last year that the new Turkey route would help Russia to meet this goal. After talks on the link stalled over the summer, Gazprom said that the Baltic Sea link directly to Germany known as Nord Stream-2 was a priority. Putin’s bet on Nord Stream-2 is risky as the project may face opposition in the EU, De Jong said. EU Energy Commissioner Miguel Arias Canete said last week the link risked concentrating 80 percent of the bloc’s Russian gas imports on one route while eastern European nations have also warned of the risk of circumventing Ukraine. Gazprom said Tuesday that key markets for Nord Stream-2 are boosting gas purchases from Russia, with total European exports in early October gaining almost 36 percent from last year’s level.
*****************************************************
While Nord Stream-2 doesn’t need to be approved by the European Commission, the onshore network may face legislation and political obstacles. Gazprom faces similar problems with the Opal gas pipeline in Germany linked to the existing Nord Stream, which can use only half of its capacity because EU rules require access for competitors.
THE EU WOULD HAVE TO BE SUICIDAL TO FREEZE OUT EUROPEANS...
http://www.bloomberg.com/news/articles/2015-10-15/corporate-america-s-epic-debt-binge-leaves-119-billion-hangover
The Federal Reserve’s historically low borrowing rate isn’t benefiting corporate America like it used to. It’s more expensive for even the most creditworthy companies to borrow or refinance even as the Fed has kept its benchmark at near-zero the last seven years. Companies have loaded up on debt. They owe more in interest than they ever have, while their ability to service what they owe, a metric called interest coverage, is at its lowest since 2009, according to data compiled by Bloomberg. The deterioration of balance-sheet health is “increasingly alarming” and will only worsen if earnings growth continues to stall amid a global economic slowdown, according to Goldman Sachs Group Inc. credit strategists led by Lotfi Karoui. Since corporate credit contraction can lead to recession, high debt loads will be a drag on the economy if investors rein in lending, said Deutsche Bank AG analysts led by Oleg Melentyev, the bank’s U.S. credit strategy chief.
“The benefit of lower yields for corporate issuers is fading,” said Eric Beinstein, JPMorgan Chase & Co.’s head of U.S. high-grade strategy.
As of the second quarter, high-grade companies tracked by JPMorgan incurred $119 billion in interest expenses over the last year, the most for data going back to 2000, according to the bank’s analysts. The amount the companies owed rose 4 percent in the second quarter, the analysts said. The risk of default is negligible for companies with good credit. Even so, their health isn’t likely to improve when the Fed finally raises the lending rate, and it could worsen even without a hike, said Ashish Shah, the global head of credit strategies at AllianceBernstein Holding. A souring economy or a shocking event such as a prominent terrorist attack could also cause borrowing costs to spike, he said.
Paying Out
The fallout of more borrowing coupled with lower earnings has raised concern among the analysts who track the debt and the money managers who buy it. Yet it seems the companies themselves are acting as if it’s not happening. They’re still paying out record amounts in buybacks and dividends. In the second quarter, the most creditworthy companies posted declining earnings before interest, taxes, depreciation and amortization. Yet they returned 35 percent of those earnings to shareholders, according to JPMorgan. That’s kept their cash-payout ratio -- how much money they give to shareholders relative to Ebitda -- steady at a 15-year high.
The borrowing has gotten so aggressive that for the first time in about five years, equity fund managers who said they’d prefer companies use cash flow to improve their balance sheets outnumbered those who said they’d rather have it returned to shareholders, according to a survey by Bank of America Merrill Lynch. Since May, stocks of companies that have spent the most buying back their shares have performed even worse than the S&P 500 index. That comes after buyback stocks outperformed the S&P 500 each year since 2007, according to data compiled by Bloomberg. Companies have been using low interest rates to refinance more expensive debt, but the new debt isn’t saving them as much as it used to. As recently as 2012, companies were refinancing at interest rates that were 0.83 percentage point cheaper than the rates on the debt they were replacing, JPMorgan analysts said. That gap narrowed to 0.26 percentage point last year, even without a rise in interest rates, because the average coupon on newly issued debt increased.
Lower Yields
Companies saved a mere 0.21 percentage point in the second quarter on refinancings as investors demanded average yields of 3.12 percent to own high-grade corporate debt -- about half a percentage point more than the post-crisis low in May 2013. Servicing the debt got tougher for companies in the second quarter, too, at least on paper. Interest coverage, an estimate of how many times a company could pay off its interest using its Ebitda, fell in the last year to a median 13.8 times from 16.7 times for companies with top credit ratings, excluding financial firms, who’ve issued debt, according to data compiled by Bloomberg. The weakening has been widespread. If they had to, nearly half of companies could only cover their interest expenses between zero and 10 times with the Ebitda they generate. That compares with the 38 percent of companies that had interest coverage ratios between 0 and 10 times in 2006, according to JPMorgan.
More Vulnerable
Looking into the future, UBS AG’s Matthew Mish sees only tightening lending standards. He warned clients in an Oct. 7 research note that borrowing costs will rise for the most creditworthy borrowers in the first three months of next year. It would take a meaningful contraction in earnings along with tighter lending to spark a credit crisis, given that interest coverage remains above its historical average, according to Vanguard Group Inc.
Companies that have already issued $9.3 trillion in new debt since the financial crisis are trying to keep the cheap-debt party raging as long as they can. Some investors are joining them for what may turn out to be a nightcap, according to Stephen Antczak, head of U.S. credit strategy at Citigroup Inc.
The Federal Reserve’s historically low borrowing rate isn’t benefiting corporate America like it used to. It’s more expensive for even the most creditworthy companies to borrow or refinance even as the Fed has kept its benchmark at near-zero the last seven years. Companies have loaded up on debt. They owe more in interest than they ever have, while their ability to service what they owe, a metric called interest coverage, is at its lowest since 2009, according to data compiled by Bloomberg. The deterioration of balance-sheet health is “increasingly alarming” and will only worsen if earnings growth continues to stall amid a global economic slowdown, according to Goldman Sachs Group Inc. credit strategists led by Lotfi Karoui. Since corporate credit contraction can lead to recession, high debt loads will be a drag on the economy if investors rein in lending, said Deutsche Bank AG analysts led by Oleg Melentyev, the bank’s U.S. credit strategy chief.
“The benefit of lower yields for corporate issuers is fading,” said Eric Beinstein, JPMorgan Chase & Co.’s head of U.S. high-grade strategy.
As of the second quarter, high-grade companies tracked by JPMorgan incurred $119 billion in interest expenses over the last year, the most for data going back to 2000, according to the bank’s analysts. The amount the companies owed rose 4 percent in the second quarter, the analysts said. The risk of default is negligible for companies with good credit. Even so, their health isn’t likely to improve when the Fed finally raises the lending rate, and it could worsen even without a hike, said Ashish Shah, the global head of credit strategies at AllianceBernstein Holding. A souring economy or a shocking event such as a prominent terrorist attack could also cause borrowing costs to spike, he said.
Paying Out
The fallout of more borrowing coupled with lower earnings has raised concern among the analysts who track the debt and the money managers who buy it. Yet it seems the companies themselves are acting as if it’s not happening. They’re still paying out record amounts in buybacks and dividends. In the second quarter, the most creditworthy companies posted declining earnings before interest, taxes, depreciation and amortization. Yet they returned 35 percent of those earnings to shareholders, according to JPMorgan. That’s kept their cash-payout ratio -- how much money they give to shareholders relative to Ebitda -- steady at a 15-year high.
The borrowing has gotten so aggressive that for the first time in about five years, equity fund managers who said they’d prefer companies use cash flow to improve their balance sheets outnumbered those who said they’d rather have it returned to shareholders, according to a survey by Bank of America Merrill Lynch. Since May, stocks of companies that have spent the most buying back their shares have performed even worse than the S&P 500 index. That comes after buyback stocks outperformed the S&P 500 each year since 2007, according to data compiled by Bloomberg. Companies have been using low interest rates to refinance more expensive debt, but the new debt isn’t saving them as much as it used to. As recently as 2012, companies were refinancing at interest rates that were 0.83 percentage point cheaper than the rates on the debt they were replacing, JPMorgan analysts said. That gap narrowed to 0.26 percentage point last year, even without a rise in interest rates, because the average coupon on newly issued debt increased.
Lower Yields
Companies saved a mere 0.21 percentage point in the second quarter on refinancings as investors demanded average yields of 3.12 percent to own high-grade corporate debt -- about half a percentage point more than the post-crisis low in May 2013. Servicing the debt got tougher for companies in the second quarter, too, at least on paper. Interest coverage, an estimate of how many times a company could pay off its interest using its Ebitda, fell in the last year to a median 13.8 times from 16.7 times for companies with top credit ratings, excluding financial firms, who’ve issued debt, according to data compiled by Bloomberg. The weakening has been widespread. If they had to, nearly half of companies could only cover their interest expenses between zero and 10 times with the Ebitda they generate. That compares with the 38 percent of companies that had interest coverage ratios between 0 and 10 times in 2006, according to JPMorgan.
“It does make some of these companies more vulnerable to a growth slowdown or any type of shock,” said Jeff Cucunato, head of U.S. investment-grade credit for BlackRock Inc., the world’s biggest money manager, which said it’s taking a “cautious” approach to high-grade debt. “You’ll continue to see some land mines out there.”
More Vulnerable
Looking into the future, UBS AG’s Matthew Mish sees only tightening lending standards. He warned clients in an Oct. 7 research note that borrowing costs will rise for the most creditworthy borrowers in the first three months of next year. It would take a meaningful contraction in earnings along with tighter lending to spark a credit crisis, given that interest coverage remains above its historical average, according to Vanguard Group Inc.
“We’re more concerned than we were two years ago,” said Stuart Hosansky, principal in Vanguard’s fixed-income group. “We still view overall corporate credit quality as adequate.” Hosansky said the last time he felt that way was 2006.
Companies that have already issued $9.3 trillion in new debt since the financial crisis are trying to keep the cheap-debt party raging as long as they can. Some investors are joining them for what may turn out to be a nightcap, according to Stephen Antczak, head of U.S. credit strategy at Citigroup Inc.
“There are more people that want to buy into the bullish argument than I would expect,” Antczak said. “Maybe because the buy-the-dips mentality has worked so many times in the past.”
http://www.bloomberg.com/news/articles/2015-10-16/this-drag-on-u-s-job-growth-isn-t-going-away-anytime-soon
Employment is taking a dive in industries that sell a lot of U.S.-made goods abroad, and things could get worse before they get better. The double whammy to exports from the stronger dollar and cooling overseas markets was bound to hit employment in the world's largest economy. JPMorgan Chase & Co. has put numbers to the damage.
Export-oriented industries have been losing about 50,000 jobs a month for most of this year, after adding 9,000 a month on average in 2014, according to JPMorgan economist Jesse Edgerton. Recent manufacturing surveys hint the impact could worsen, and the employment erosion may extend into the first half of 2016, he predicts. In effect, that would mean private payrolls growth takes a step down to around 150,000 a month, from the booming 250,000-plus average of 2014.
Considering export-oriented jobs are among the better paying ones, that's a pretty sobering forecast. U.S. jobs supported by goods exports, for example, pay as much as 18 percent more than the national average, according to government estimates. At a time of increased concern that growth is losing momentum, a strong labor market backed by jobs that pay well is key to sustaining consumer spending, the biggest part of the economy.
Edgerton has pieced out the hit to employment, which isn't easy to gauge from the Labor Department's monthly payrolls report. He developed a way to measure the share of each industry's output that is exported, both directly and indirectly through sales to other industries that cater to overseas demand. Using that, he worked out how payrolls are faring in those businesses compared with counterparts that focus on the U.S. market. Trends in the top four industries with the largest export share — transportation equipment excluding motor vehicles; machinery; computer and electronic products; and primary metals — offer another reason for concern, Edgerton said. Payrolls have been slowing for decades in capital-intensive manufacturing businesses that dominate exports. So there's little reason to expect export jobs will see a return to positive territory.
One consolation is the job losses are "pretty much confined" to exporters, while "plain vanilla" industries selling to U.S. consumers have been largely shielded, Edgerton said. He found payrolls at non-export employers, typically service providers, are currently posting an average monthly gain of 203,000 . While that marks a downshift from 296,000 as recently as June, it's within the 150,000 to 300,000 range seen since 2013.
THAT'S ALL RIGHT, AS LONG AS THE DOLLAR REMAINS A GLOBAL CURRENCY...WHICH WILL BE ENDING IN THE NEXT 4 YEARS, I'M GUESSING...
Employment is taking a dive in industries that sell a lot of U.S.-made goods abroad, and things could get worse before they get better. The double whammy to exports from the stronger dollar and cooling overseas markets was bound to hit employment in the world's largest economy. JPMorgan Chase & Co. has put numbers to the damage.
Export-oriented industries have been losing about 50,000 jobs a month for most of this year, after adding 9,000 a month on average in 2014, according to JPMorgan economist Jesse Edgerton. Recent manufacturing surveys hint the impact could worsen, and the employment erosion may extend into the first half of 2016, he predicts. In effect, that would mean private payrolls growth takes a step down to around 150,000 a month, from the booming 250,000-plus average of 2014.
"Employment is declining in industries exposed to exports, and we haven’t seen any sign the decline is slowing down," Edgerton said. "The drag from job losses in export industries will linger on for some time at least."
Considering export-oriented jobs are among the better paying ones, that's a pretty sobering forecast. U.S. jobs supported by goods exports, for example, pay as much as 18 percent more than the national average, according to government estimates. At a time of increased concern that growth is losing momentum, a strong labor market backed by jobs that pay well is key to sustaining consumer spending, the biggest part of the economy.
Edgerton has pieced out the hit to employment, which isn't easy to gauge from the Labor Department's monthly payrolls report. He developed a way to measure the share of each industry's output that is exported, both directly and indirectly through sales to other industries that cater to overseas demand. Using that, he worked out how payrolls are faring in those businesses compared with counterparts that focus on the U.S. market. Trends in the top four industries with the largest export share — transportation equipment excluding motor vehicles; machinery; computer and electronic products; and primary metals — offer another reason for concern, Edgerton said. Payrolls have been slowing for decades in capital-intensive manufacturing businesses that dominate exports. So there's little reason to expect export jobs will see a return to positive territory.
One consolation is the job losses are "pretty much confined" to exporters, while "plain vanilla" industries selling to U.S. consumers have been largely shielded, Edgerton said. He found payrolls at non-export employers, typically service providers, are currently posting an average monthly gain of 203,000 . While that marks a downshift from 296,000 as recently as June, it's within the 150,000 to 300,000 range seen since 2013.
THAT'S ALL RIGHT, AS LONG AS THE DOLLAR REMAINS A GLOBAL CURRENCY...WHICH WILL BE ENDING IN THE NEXT 4 YEARS, I'M GUESSING...
