Will The Employment Report Be The Tipping Point For Equities?
By Parsimony Investment Research:If you want a true gauge of the sustainability of the economic recovery, look no further than employment and housing. If the job and housing markets remain weak, the consumer-driven U.S. economy will continue to sputter. It's that simple.As highlighted in a previous article, the housing situation in the U.S. still remains relatively bleak. Sales of new homes stand at just about half the roughly 700,000-a-year pace that analysts consider evidence of a healthy market. In addition, home prices are back to levels not seen since late-2002 (based on the Case-Shiller Composite 20 Index).On the jobs front, private employment increased by 119,000 in April, the smallest gain in seven months, after rising by 201,000 in March (according to a report published by ADP on Wednesday).As shown in the chart above, the ADP report has a strong historical correlation (0.95) with BLS estimates of total nonfarm payroll employment.Complete Story »