Market Update — July 9, 2012

Here are some stats / ideas that I found interesting during my weekend reading.

A Few Stats from the Employment Report

1. U.S. employers added 80K jobs in June. The unemployment rate is still 8.2%.

2. We’ve added a total of 225K jobs in the quarter.  This is the weakest quarter of job growth since we’ve started adding jobs in 2010.

3. Employers added 25K temporary workers.  This can indicate future hiring.  On the flip side, this means that almost 1/3 of the 80K jobs were temporary.

4. Temporary jobs have accounted for nearly a quarter of all private-sector jobs added since March, when hiring began to slow.

5. The labor force increased by 155K.  This is a combination of people working or looking for a job (which is positive).

6. There was an increase in the average number of hours worked.  Hourly wages rose slightly.

7. The U-6 rate is 14.9%.  This is unemployed + underemployed + discouraged. The underemployed are people who are working part-time but want a full-time job.  The discouraged are people who have stopped looking because they don’t believe that they can find a job (you don’t count as unemployed if you’re not looking).

8. More than eight million Americans are working part-time because they can’t find a full-time job, up by more than half a million since March. Overall, close to a million more people are working part-time than in March, while the number of full-time workers has fallen by more than 700,000.  (Part-time workers count as employed.)

9. Nearly 3.8 million Americans (~28.5% of all unemployed job-seekers) have been out of work for at least a year.

10. The average unemployed worker has been unemployed for approximately nine months.

11. Government payrolls declined by 4,000 jobs in June and have now fallen in all but three months in the past two years.

12. Self-employment in unincorporated businesses—mostly contract employees and freelancers—is up 381,000 since March.

13. The S&P is up 7.7 percent year to date.

The EU

1. A senior EU official said that Euro-zone countries would still have to guarantee the loans their banks receive from the region’s permanent bailout fund, the European Stability Mechanism.  In other words, the ESM won’t simply make loans without recourse.   Most of the optimism from a week ago was that these loans would be made and wouldn’t increase the debt of the sovereign nations.

2. The official also said that the euro-area bank supervisor wouldn’t be operational until the second half of 2013.

3. Spain’s ten-year government yield is back to 6.97%.  Italy’s is back above 6%.  Basically, we had one happy week after the Brussels summit.  Happiness over.

4. Greece’s new Prime Minister wants to adjust the terms of their 173 billion euro bailout, rolling back some austerity measures and extending Greece’s deficit targets by two years.  Greece is expected to see GDP shrink by 6% this year.

5. The euro hit a two-year low, sinking to $1.2267.  This is the lowest level since July 2010.  A week ago, the euro was near $1.27.

6. Nouriel Roubini (aka “Dr. Doom”) said that he would give the euro another three to six months.  At that point, he said Italy and Spain will lose access to the capital markets.

7. The euro zone’s permanent rescue fund can buy bonds in order to lower borrowing costs.  But, it only has 500 billion euros (and 100 billion of those are earmarked for Spanish banks).

Medicare

1. In 2009, the top 10% of Medicare beneficiaries who received hospital care accounted for 64% of the program’s hospital spending.

2. Medicare spending totaled $486 billion last year.  This is 13.5% of all federal expenditures.

3. The CBO projects that Medicare expenditures will grow an average of 5.7% through 2022 and reach 16.2% of all federal outlays.

4. Medicare patients rack up disproportionate costs in the final year of life. In 2009, 6.6% of the people who received hospital care died. Those 1.6 million people accounted for 22.3% of total hospital expenditures.

5. Many of the costliest patients aren’t the oldest.  Eight of the top ten costliest people on Medicare in 2009 were under 65.  They qualified for Medicare because they’re on disability.

Have a great week.

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