Companies have to benchmark by 6/30 to prepare for Obamacare which starts 1/1/14. Keys numbers are:
1)Companies above 50 employees have to participate
2)30 hours and above/week constitute full time employees
So, what are companies doing to mitigate the financial damage?
"1" not expanding if it takes them to 50 employees or more or contracting to below 50 employees
"2" cutting back the hours of full-time employees, so they work less than 30 hours
"2" is why the jobs number was so high in Feb as part-time employees was way up while full-time employees declined. Also, think of it this way, because of Obamacare-two jobs were created out of nothing. Full time worker, cut to part time, had to get another part-time job (1 job added) and a part-time worker had to be hired at the initial firm to make up for full-time worker's hours being cut (2nd job added). Expect more of same for March, April and May. It would seem the industries most affected would be restaurant and retail-lots of jobs in those two sectors Problem for business? It raises costs and is an arbitrary intrusion into the micro-management of their businesses-which is an additional burden.
Bottom line, the US economy is in a false "prosperity", juiced by the FED, which disproportionately helps industries that finances purchases-housing and autos. Additionally, the regulatory burdens out of Washington continue to grow-which will hurt profit margins as the year progresses and into 2014
For me, I can find only a few bargains and refuse to play the game of "buy high and sell higher" when "higher" is in doubt given the macro-econ backdrop as it relates to unit growth for all industries and margin squeeze pressures-accelerated by regs coming out of Washington.
Several more "warning" shots today. Very weak PMI numbers out of Europe, ARG warns and the Dow Utility Index hit an all-time high on 3/20-which has historically been a good indicator of lower interest rates-implying a weak economy.
Commander, What percentage of companies in the US employ in the neighborhood of 50 persons? Or, to put it another way, what percentage of employed Americans work for such companies? I have to know that to credit your argument.
Don't know, but I'm sure it is researchable. Have not completed all this weekend's reading, but did read part-time jobs were up 233,000 in April. That means that full time jobs were down 57,000. This marks the 2nd month in a row that part-time jobs up, full time jobs down-revisions for Jan and Feb could be similar-have not researched that however.
Another month of falling full-time jobs, as measured by U6, and a big increase in part-time jobs. Obamacare is making companies reduce full-time jobs (over 30 hours/week) in favor of having 2 part-time employees do that same work. The original full-time employee then gets a part-time job.
Net/net--one full time job gets "morphed" into 3 part-time jobs. That is where the big job increased are coming from.
Selling into today's strength.