The June jobs report was all the news a few days ago, with
the U.S. economy adding 287,000 new jobs, compared to economists’ expectations
of 175,000 new non-farm jobs. Markets
around the world responded well to the news, and this news increases the
likelihood of an interest rate increase by the Fed before the year is over.
The official unemployment rate stands at 4.9%, with 414,000
new entrants to the labor force in June.
The labor force participation rate rose a bit, to 62.7%. Over the last 40 years, the labor force
participation rate has ranged from a low of 61.3% in January 1976 to a high of
67.3% during the first quarter of 2000.
Average hourly wages in June were $25.61, and hourly pay has
increased 2.6% during the 12 months to June 2016, exceeding inflation.
One question that surfaces from time to time is how have
wages and incomes grown over the last 40 years, compared to the net worth of
those who own the companies that provide the jobs? This question, like many, provides fodder for
all sorts of commentary.
My observation? Any
company which plans to be viable must make sure its products and services
continually fill a need. This typically
requires a constant focus on product and service development and
innovation. It would be easy to make a
list of companies which no longer exist, because their products or services
became irrelevant. And we can also make
a list of companies who have been around for decades, who continually reinvent
themselves.
In the same way, any employee who plans to be continually
employable, and enjoy an ever larger payday, must also make sure they remain
viable. This often takes the form of
learning new technical, people, organizational, or leadership skills. Those who choose not to engage in continuing
personal and professional development will find themselves either at the low
end of the comp scale, or unemployed.
Again, personal decisions weigh more heavily on outcomes, than do larger
economic trends.
UPS and Coke, among others, have chosen not to sponsor the
Republican National Convention in Cleveland, citing budgetary constraints. Houston-based energy company, Kinder Morgan,
is selling a 50% stake in the Southern Natural Gas pipeline system to Atlanta
based Southern Company for $1.47 billion.
Kinder Morgan will use the proceeds to pay down debt.
Ultimate Fight Club has been sold for $4 billion to sports
talent giant IMG, backed by PE firms Silver Lake and KKR. Brothers Frank and Lorenzo Fertitta bought
UFC for $2 million in 2000. Hats off to
them for good timing on both entry and exit.
Here’s hoping the IRS at least sends them a thank you card, unless they
happened to buy UFC through their IRA (not likely).
Megaship MOL Majesty has made it through the Panama Canal,
and to the port of Miami, making it the first megaship to arrive at the port
after transiting the newly expanded canal.
Prior to the expansion, the canal could handle ships of up to 5000 TEU’s
(a TEU is a 20’ container equivalent).
The MOL Majesty carries 14,000 TEUs.
Here’s hoping you make it to the beach, or the mountains, or
to spend time with extended family, before the fall season, and school, shows
up in the next few weeks.
Quote of the week:
“The secret to successful hiring is this: look for the
people who want to change the world.”
Marc
Benioff, CEO Salesforce
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