This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Global Macro: Where's the Real Growth?

NEW YORK (TheStreet) -- A look at labor market explains why investors cannot decide whether the Federal Reserve will begin to reduce its bond-buying program now or later.

Monetary stimulus was put in place to calm markets, but now the future of easing measures has been the root of wild market swings. The month before a major central bank decision, traders go wild trying to guess what will happen next. This market schizophrenia isn't healthy and makes for a difficult trading environment.

Positive economic data can be both bad and great for the market at the same time, which leaves analysts scratching their heads. In an effort to provide some clarity over the true condition of the labor market, I have devised a chart below.

The chart analyzes the price action of the last 10 years of nonfarm payrolls data. The nine-period moving average (orange) and 36-period moving average (gray) overlay the actual monthly reading in blue.

It looks as if we have mostly recovered from the deep trough in the U.S. labor market during the aftermath of the 2008 financial crisis. Jobs numbers have been trending higher since mid-2012. The issue, however, is the slow pace of the recovery as many had hoped to achieve growth superior to that in the early 2000s.

The chart below shows that the job data have moved in a fairly tight range recently. The trend is heading higher, although the data aren't exceeding expectations by a great amount.

Without more improvement, pushing the unemployment rate down has been difficult. While the rate is ticking lower, a decreasing participation rate in the labor market may be the reason.

And while there's an absence of major downside risk, the upside is uninspiring. Central bank stimulus has been the main driver leading assets to record highs, not a big improvement in the economy. Investors are piling into equities merely so that they won't miss out on the next rally.

Stimulus and low interest rates are still needed for the safety of financial markets, but improved fiscal policy is needed for real economic growth. Until then, the economy will improve only tepidly.

At the time of publication, the author had no position in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Andrew Sachais' focus is on analyzing markets with global macro-based strategies. He takes into consideration global equity, commodity, currency and debt markets. Sachais is a graduate of Georgetown University, where he earned a degree in Economics.

Follow @Macroinsights

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs