What are the long-term trends for multiple jobholders in the US? The Bureau of Labor Statistics has two decades of historical data to enlighten us on that topic, courtesy of Table A-16 in the monthly Current Population Survey. At present, multiple jobholders account for just under five percent of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the current relative sizes of which we've illustrated in a pie chart.
Let's take a close look at Friday's employment report numbers on Full and Part-Time Employment. Buried near the bottom of Table A-9 of the government's Employment Situation Summary are the numbers for Full- and Part-Time Workers, with 35-or-more hours as the arbitrary divide between the two categories. The source is the monthly Current Population Survey (CPS) of households. The focus is on total hours worked regardless of whether the hours are from a single or multiple jobs.
The Institute of Supply Management (ISM) has now released the January Non-Manufacturing Purchasing Managers' Index (PMI), also known as the ISM Services PMI. The headline Composite Index is at 56.5 percent, down from 56.6 last month. Today's number came in below the Investing.com forecast of 57.0 percent.
What does the ratio of unemployment claims tell us about where we are in the business cycle and our current recession risk? At present, the ratio for Continued Claims has been trending down. Excluding the 1981 recession, the Initial Claims trough lead time for a recession has ranged from 7 to 22 months with an average of 12 months if we include the 1981 recession and 14 months if we exclude it. Admittedly, the last recession is an extreme example, but the Initial Claims trough preceded its December 2007 onset by a whopping 22 months.
This morning's employment report for January showed a 227K increase in total nonfarm payrolls. The unemployment rate ticked upward from 4.7% to 4.8%. The Investing.com consensus was for 175K new jobs and the unemployment rate to remain at 4.7%. Revisions were made to total nonfarm payrolls for all of 2016.
The January US Services Purchasing Managers' Index conducted by Markit came in at 55.6 percent, up 1.7 percent from the December estimate. The Investing.com consensus was for 55.1 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
With the GDP Q4 Advance Estimate, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 122.5%, up from 121.2% the previous quarter. It is off its 129.7% interim high in Q1 of 2105.
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns. In a "normal" market environment -- one with conventional business cycles, Federal Reserve policy, interest rates and inflation -- current valuation levels would be a serious concern. But these are different times.
Quick take: Based on the January S&P 500 average of daily closes, the Crestmont P/E is 102% above its arithmetic mean and at the 98th percentile of this fourteen-plus-decade monthly metric. The January valuation is the highest since February of 2001 during the Tech Bubble.
Here is a summary of the four market valuation indicators we update on a monthly basis.