Unemployment Rate At 16-Year Low; Jobs Report Surprises! Market Continues On Its Sugar High -- June 2, 2017

Closing

Market futures (three new records):

• Dow 30: up 57.59
• Nasdaq: up 58.97
• S & P 500: up 8.55

Original Post

Magic number: when you look at the "jobs number" coming out, remember:

For "new jobs," 150,000 will be the new "base." The final number under the Obama administration, was 156,000 but 150,000 is a nicer, rounder, easier-to-remember number; and, although the report was described as "tepid" by The New York Times, it was associated with economic growth.

Jobs: forecast, 183K added to payroll jobs -- forecasts

• 170K, slight uptick in unemployment rate
• 169K (Austin Goldsby), but unemployment rate drops a "tick"
• 229K (Ryan Streeter), slight drop in unemployment rate
• 233K (Rick Santelli), if it turns out to be a "weak" number, watch out! Key number to watch: 217K -- Rick after the number released:
• 187K (Steve Liesman); after the number released, Steve: government employment was down 9,000;

And the number is: 138K -- wow! 4.3% unemployment -- ticks down from 4.4%. What's the disconnect between ADP (253K) and today's number? It turns out everyone's model is +/- 50,000.

16-year low: unemployment number at 4.3%. Full employment. Happy days are here again. 

Jobs, over at Bloomberg: link here.

Cooler hiring may partly reflect the challenge of finding skilled and experienced workers amid a tightening job market. It may also be a sign businesses are reluctant to expand their workforce until they see more evidence the new administration’s plans are translating into legislation that’ll reduce taxes and spur growth.

Jobs, revision: the biggest concern for me was the April number revision -- to 174,000 from 211,000 originally reported. It's one thing for different models to vary on any given report, but how does the same model cause such a discrepancy (original report vs revision)?

The numbers don't add up!

 

*******************************

Economy: US factory activiyt edges up; private payrolls surge. Some analysts wonder if the 253K ADP number yesterday was "real." If accurate, people talking about "full employment." "Running out of bodies."

WTI: drops again. Down 2%. Below $48.

Active rigs:

$47.35	6/2/2017	06/02/2016	06/02/2015	06/02/2014	06/02/2013
Active Rigs	49	25	81	188	187

Market futures:

• Dow 30: 71 (after jobs report: up 26)
• Nasdaq: up 18.25 (after jobs report: up 11.50)
• S & P 500: 5.25 (after jobs report: up 1.00)
• Larry Summers: "sugar high" -- said it was a "sugar high" back in December, 2016 -- CNBC, certainly there must be some "statute of limitations" 

Rover: all-out effort to Keystone this natural gas pipeline (story everywhere, no links). Lead-in to next article -- RBN Energy's update on Rover, other Marcellus/Utica pipelines.

RBN Energy: continuing series on Rover and other Marcellus/Utica takeaway projects ot he midwest, Canada.

REX’s full-scale reversal was a watershed for capacity-constrained Marcellus/Utica producers. Ohio has been the fastest growing producing area within the Northeast over the last couple of years, rocketing 3.0 Bcf/d higher between early 2014 and January 2017. That’s about 36% of overall Northeast production growth during that period.
As big as the REX reversal has been for Appalachia gas production, additional pipeline projects will more than double that capacity by the end of this year, marking the next watershed for Northeast producers. 

By far the single largest expansion — the motherlode, so to speak — of takeaway capacity on the radar currently, not just for the Midwest corridor but for the Northeast as a whole, is Energy Transfer Partners’ (ETP) 713-mile, 42-inch-diameter Rover Pipeline.
Rover Pipeline — a joint venture of ETP and Traverse Midstream Partners — will pick up as much as 3.25 Bcf/d of gas from processing plants in West Virginia, southeastern Ohio and western Pennsylvania and deliver nearly 70% of that to interconnects at the Midwest Hub near Defiance, OH, by July 2017 (phase I). From there, the pipe will turn north and head to the Michigan and Dawn, Ontario, market areas via an interconnect with the Vector Pipeline in Livingston County, MI, by November 2017 (phase II).

The project, which is backed primarily by producers, is expected to unleash constrained Marcellus/Utica production into the U.S. market. Rover also is critical to plans by ETP to make more of its Trunkline and Panhandle Eastern Pipeline bidirectionality to allow delivery of more Marcellus/Utica gas to the Gulf Coast and other markets.