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Affluent Christian Investor | November 16, 2018

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Yet Another Misleading Jobs Report

Bureau of Labor Statistics

Friday morning we got yet another employment report from the Bureau of Labor Statistics that looks great on the surface, but not so good deep down in the data. Nonfarm payrolls increased by 252,000 and the unemployment rate fell to 5.6%. What’s not to like about that? In fact, you have to go all the way back to May 2008 to find a lower unemployment rate.

Here’s what’s not to like: The civilian labor force fell even though the civilian population increased. Even though the number of employed persons increased by 111,000, the number of people in the labor force decreased by 273,000. Think of it this way: There was an increase in the number of people working but an even bigger decrease in the number of people who are willing to work. The labor force participation rate fell to 62.7%.

What about wages? Because they were up in November, economists were hoping this was a trend. Not so. Average hourly wages fell in December by a nickel to $24.62. Average weekly earnings fell over the month by $1.73 to $850.12. It’s a good thing gasoline prices are down.

So once again we see that more jobs were created but even more people dropped out of the workforce. As I have explained before, retiring Baby Boomers explain only some of the decline in the participation rate. The remainder is due to people just giving up trying to find decent work. The job market is definitely better than it was, yet there is no way we could call it healthy.


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Vahan Janjigian is Chief Investment Officer at Greenwich Wealth Management, LLC, a SEC Registered Investment Adviser, where he manages portfolios for clients in separate accounts. Dr. Janjigian is a former Forbes magazine columnist and former Editor of the Forbes Special Situation Survey. According to Hulbert Interactive, his stock picks returned more than 18% annually during one of the market’s worst 10-year periods.

Dr. Janjigian holds the Chartered Financial Analyst designation and has earned degrees in general sciences and finance from Villanova University and Virginia Polytechnic Institute and State University (Virginia Tech). He previously served on the faculties of several universities, including the University of Delaware, Northeastern University, the American University of Armenia, and Boston College, where he taught courses in corporate finance, financial theory, investments, accounting, and economics; and he currently teaches a seminar on equity investment management to business executives in Singapore through Baruch College’s Zicklin School of Business. Dr. Janjigian has served as an expert witness on matters involving portfolio management, churning, suitability, and hedge fund manager compensation.

Dr. Janjigian has published his research in numerous scholarly and professional journals; and has been quoted in many leading newspapers and magazines, including Barron’s, Forbes, The Wall Street Journal, and USA Today. He appears as a guest commentator on various television and radio networks, including Fox, CNBC, MSNBC, and CBS Radio. Dr. Janjigian is the author of Even Buffett Isn’t Perfect (published by Penguin) and co-author of The Forbes/CFA Institute Investment Course (published by Wiley).


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