Private payrolls increased substantially more than expected in February, delivering an encouraging dose of optimism in the wake of wobbly data in recent weeks from other corners of the economy. US companies added 288,000 jobs last month, according to this morning’s report from the Labor Department — far above the consensus forecast for 230,000 via Briefing.com. The news is all the sweeter since it contrasts with the lesser rate of growth that’s implied via this week’s ADP Employment Report for February.
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One of the more intriguing observations in Berkshire Hathaway’s new letter to shareholders is Warren Buffett’s reference to what I like to call economic gravity, aka the law of large numbers. There are several ways to keep it at bay (maybe), but in the end it wins no matter what you do. Buffett and company, of course, have an extraordinary history of excelling where so many others have stumbled in this regard. But an unusually long run of success is taking its toll. As Buffett himself recognizes, gravity’s pull is increasing on Berkshire’s prospects. The observation inspires some brief ruminating on how to think about economic gravity generally in the realm of designing and managing investment portfolios.
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● US factory orders fall for sixth straight month | Reuters
● US factory orders down, but business investment rises | NY Times
● US jobless claims hit highest level since May | MarketWatch
● ECB raises GDP forecasts, sees zero inflation in 2015 | Reuters
● German Industry Output Rises for Fifth Month as Growth Firms | Bloomberg