Of course, just two days after we talked about how doom and gloom the mainstream financial media is, the headlines on the front page are happy-go-lucky following the July 2021 jobs report.
Source: CNBC
And, yes, it was a good report — the U.S. added 943,000 jobs in July — but it’s not all that.
Heck, even The New York Times noted that most of the July jobs report data was collected in “the first half of the month, before variant-related cases exploded in many parts of the country.”
And while I may not be as down about the delta variant as others, that doesn’t mean restrictions aren’t a possibility. So let’s pump the brakes on the hype train a little and really examine the numbers.
Examining the July 2021 Jobs Report
As you can see, the big gains were in leisure/hospitality and government.
Source: CNBC
We may see additional gains in government going forward, as we’re likely to get an infrastructure bill completed soon.
But leisure and hospitality, well…
Those are summer jobs.
So while this pickup reflected in the July 2021 jobs report is nice, we will likely see a portion of that go away in September as teenagers and college students go back to school.
Which won’t be a bad thing at all. Those kids will be spending the money they made over the course of the next few months. But there’s a high chance the mainstream media will forget that when October’s jobs report is released.
Looking at other areas, although they were smaller, it’s good to see the increase in business services, transportation, health care and manufacturing.
Trucking labor in particular has been constrained. Although trucking rates have finally come off all-time highs — yet another sign of inflation — they’re nowhere near back to pre-pandemic levels.
Source: Bloomberg
The only way to get that index back down to about 50 is to hire new truckers…
And although 49,700 is nowhere near enough, it’s at least moving in the right direction.
The News You Should Watch
So as nice as the July 2021 jobs report was, I don’t think it means that much. One thing that does, however, is the incoming infrastructure deal.
I spoke with two Congressmen on Friday, and both are fairly certain it’s going to get done.
And I’ve got an easy way to play it…
Let me introduce you to the Global X U.S. Infrastructure Development ETF (NYSEArca: PAVE).
Source: Bloomberg
The fund’s top holding is Nucor Corp. (NYSE: NUE) — the lowest-cost rebar producer. But it also contains Rockwell Automation (NYSE: ROK), Vulcan Materials Co. (NYSE: VMC), all the major railroads, etc.
It’s like a one-stop shop for the raw materials and transport needed to build roads and bridges.
And why not just make things easy?
All the best,
Matt Warder
P.S. Future of Wealth Head Trader Lance Ippolito has a confession…
While he’s helped thousands of people with his trade recommendations, but there are some that his members can’t get in on.
And he feels guilty… but the reality is that price action is volatile.
Sometimes things move too fast.
But he began to wonder if there might be a way to fix that and get traders in on his moves even faster…
And he came up with the Daily Profit Challenge.
