6 Uber Strange Areas of the Employment Report

The market has decided to rejoice the July employment report. I suppose if you toss a firecracker into an empty metal garbage can it will go kaboom, right? Although it's welcome to see stock prices rise as it indicates an economy doing well, or in this case not as bad as consensus thought, I am advising clients (www.decodingwallst.com) to proceed with caution. There was a soft underbelly to the July employment data if I read it correctly (see Twitter posts @BrianSozzi). In the aggregate these uber strange areas are unlikely to dent the one-day move in the market and the modest enthusiasm on tap for the weekend, but there are medium-term considerations in play that to me, really questions the power of the Federal Reserve to cure what ills the economy through additional accommodation. •Employment for those ages 16-19 is almost three times the national average. We are essentially creating children less and less prepared to enter a college setting or a career straight from high school if so inclined to go that route. •Employment for those ages 20 to 24 (double-digit percentage) has risen for two straight months to an alarming 13.5%. The advance is being driven by men (15.2% rate from 14.1%). Looking at it from either angle, we have college graduates increasingly unable to satisfy debt obligations and not learning the true skills that will set the groundwork for lasting careers. •Temporary layoffs have increased since April. •Those completing temporary jobs have increased since April. •The number of those unemployed for 5 to 14 weeks on an uptrend since March. •Overtime is virtually non-existent, explaining an unwillingness to re-leverage one's personal balance sheet. Furthermore, this is one reason amongst many for erratic consumer spending.