US job growth fell hard last month, the Labor Department reports. Private-sector payrolls increased by a thin 25,000 in May, the smallest monthly gain in five years. Even adding the estimated loss of 30,000-plus workers due to the Verizon strike last month still leaves payrolls in a dire state via the latest monthly profile. It could be noise, of course–it’s always hazardous to make assumptions about the economy from one data point. Nonetheless, the sight of the year-over-year growth rate in private employment dipping below the 2% mark for the first time in two years suggests that the recent deceleration in the labor market recovery is picking up speed.
Continue reading →

The expected risk premium for the Global Market Index (GMI) continued to tick higher in May. For the third consecutive month, GMI’s projected return for the long run over the risk-free rate increased vs. the previous month’s estimate.  GMI—an unmanaged market-value weighted mix of the major asset classes—is projected to earn an annualized 3.5% risk premium in the long term, which is moderately higher vs. last month’s estimate. (For details on the equilibrium-based methodology that’s used to generate the forecasts each month, see the summary below.)
Continue reading →

Continue reading →