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Good Numbers

June 1, 2010 – 3:06 pm

This holiday shortened week will see few but important economic statistics. The all consuming jobs report for May will come out on Friday and it is expected to tell us jobs were created. The amount is supposed to be about 500,000 and a small drop in the unemployment rate. For the first quarter there was a surge of temporary and contract workers which is the first improvement in nine quarters. This is good news.

The pattern is always the same exiting a recession. First, in the depths of the recession, there is marked improvement in productivity as current employees produce more goods as sales begin to improve. We saw this improvement over the last three quarters. Than companies higher temporary workers still hesitant to begin looking for full time employees. There is a fear that the economy may sputter and they do not want to train and than fire the newly hired. Than as the recovery extends, the larger employers are forced to higher full time and permanent workers to keep up with production. We are in this pattern currently.

One important report released this morning was the ISM (Institute Supply Management) for May which was up a strong 59.7 and internally it was very promising. It bodes well for Friday’s jobs numbers. On Thursday productivity and factory orders will be released. These are important numbers for future economic growth.

Good Trading,

Steve Peasley

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