Pat Webb - Phase 2 Advisors
Weekly Update - September 5, 2011

Understanding the August Jobs Report

In This Issue
Golf Tip
Health Tip
Green Fact
The big news last week centered on the August jobs report, which was disappointing to say the least. Non-farm payrolls were unchanged in August but down 58,000 including revisions to June/July. The consensus expected a gain of 68,000. The unemployment rate remained unchanged at 9.1%. [1]

U.S. stocks tumbled 2% on Friday [2] in reaction to the news, as headlines showing zero jobs growth in August fueled investor concerns. And while the August numbers are certainly not attractive, there are a few underlying factors we would like to draw your attention to.


One of the reasons August's numbers were so weak has to do with the Verizon strike, now over, that temporarily sidelined 46,000 workers. Were it not for that strike, private payrolls would have been up 62,000 including revisions.[3] As it stands, workers on strike are counted as unemployed when they go on strike and are added as newly employed when they go back to work. Now that they have returned to work, a future employment report will show an increase of 46,000. It's strange how the system works isn't it?


There was also some positive news in Friday's report. Civilian employment, an alternative measure of jobs that includes start ups, increased 331,000 in August, which is very encouraging.[4] In general, when new businesses are starting up and hiring workers, it means the wheels of capitalism are turning in the right direction.


If you only look at the totals, it's easy to say there was no employment growth in August, which is how most of the headlines read. But if you take time to look below the surface, a more balanced picture emerges. Much of August's weakness can likely be attributed to financial turmoil in Europe, large swings in the stock market, and lawmaking that has brought much uncertainty to the hiring arena.


Although recession fears are still lingering, recent reports on auto sales, manufacturing and consumer spending suggest that the economy is still growing, albeit slowly.[5] We believe future jobs reports will reflect that.



Monday - U.S. Holiday: Labor Day

Tuesday - ISM Non-Mfg Index  
Wednesday - Beige Book
Thursday - BOE Announcement, ECB Announcement, International Trade, Jobless Claims, EIA Petroleum Status Report   





Resized Chart 9_6

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. N/A means not available.


Bank of America Corp. and 16 other big banks have been hit with multiple accusations of securities-law violations and negligence in a series of lawsuits tied to more than $50 billion in mortgage securities. The lawsuits, filed late Friday by the Federal Housing Finance Agency, accuses lenders of selling bad mortgage securities to government-sponsored housing companies Fannie Mae and Freddie Mac.[6]
The euro came under significant pressure in European trading Tuesday, pulling down other sentiment-sensitive currencies, such as the pound and Australian dollar, with it. A steady flow of negative newsflow out of the euro zone pushed it down about 0.6% - a big move for a major currency - against the dollar.[7]
Though oil prices fell to near $88 a barrel Friday, crude has jumped about 16% since August 9th, bolstered by signs industrial production in the U.S. continues to expand. The Institute for Supply Management said Thursday that U.S. manufacturing grew for the 25th straight month while analysts had expected a contraction.[8]

About 70,000 households and businesses along the Eastern Seaboard who lost power during Irene remain without it a week after the storm.[9]



Quote of the Week
"Far and away the best prize that life has to offer is the chance to work hard at work worth doing." - Theodore Roosevelt
Recipe of the Week

Hot Artichoke Dip


From: Vegetarian Times

1 12-ounce package light silken tofu  
2 tablespoons reduced-fat mayonnaise  
1 tablespoon Dijon mustard  
1 tablespoon lemon juice  
2 cloves garlic, minced (about 2 teaspoons)  
1/2 teaspoon onion powder  
1 15.5-ounce can artichoke quarters in water, drained, rinsed, chopped  
1 cup frozen chopped spinach, thawed and squeezed dry  
1/2 cup grated Parmesan cheese  
Paprika for dusting

1) Preheat oven to 400 degrees F. Puree tofu, mayonnaise, mustard, lemon juice, garlic, and onion powder in blender or food processor until smooth. Transfer to bowl.
2) Stir artichokes, spinach, and Parmesan cheese into tofu mixture. Spoon into 8-inch glass pie dish or casserole. Bake 20 minutes. Dust with paprika; serve.



Golf Tip
Achieve Better Contact


 To build a more precise swing, practice the "Gateway Drill." Stick two tees in the ground just outside the heel and the toe of your driver (About 1 half inch on either side). Tee up a ball directly between the tees, and then swing the clubhead through the "gateway". If the clubhead is clipping the tees, you aren't making contact in the center of the clubface. Keep practicing until you can hit all of your shots so the clubhead goes through the gate without touching the tees. 

Healthy Lifestyle
A Well-Heeled Summer


Summer can be hard on your feet, but following these simple tips will keep them in tip-top shape. Resist the temptation to walk around barefoot outdoors to avoid injury or infection. Wear proper socks to keep moisture from your feet or, better yet, wear sandals to keep your feet dry. And don't forget to apply sunscreen to your feet and toes!


Green Living
Turn Things Off


It's easy to develop a habit of leaving things on. This wastes energy, which contributes to the burning of more fossil fuels and global warming. Instead, develop the habit of turning things off when you don't use them: lights, air conditioners, water heaters, computers, televisions, etc.

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Pat Webb
Pat Webb - Phase 2 Advisors
8100 Turman Ct
Fort Collins, CO 80525