New jobs data: America off the mat, ready for the next round

Ninety years ago, President Calvin Coolidge stated before the American Society of Newspaper Editors: “The chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.”

U.S. Ready for the next round

He should know. One of our most successful presidents in terms of economic growth, Coolidge oversaw average annual stock market returns of 29.1 percent—higher than any other top executive since 1900.

Since that time, not much has changed. The U.S. is still just as committed to fostering business and innovation now as we were then.

The global market unequivocally agrees. For the second year in a row and beating out strong contenders such as China, Canada and the United Kingdom, the U.S. tops the A.T. Kearney Foreign Direct Investment Confidence Index, which ranks countries on how changes in political, economic and regulatory systems might affect foreign direct investment inflows.

A handful of other recently-released data and reports underscores Coolidge’s point that you need not look too far to find growth and opportunity. On the contrary, they can be found right here in the land of innovation.

The recession hit us hard, but like any iron-willed prizefighter, we rose off the mat, ready for the next round.

Americans Back to Work

For nearly 50 consecutive months, the private-sector jobs market has been in the black. This is the most robust pace in job creation since the late 1990s. According to the Bureau of Labor Statistics (BLS), the U.S. added 248,000 nonfarm payroll jobs to the economy in September, many of them in professional and business services, health care and retail. Among those jobs were 9,000 new positions in mining and logging, an indication that the resources sector is showing moderate growth within the States. This could be a tailwind for our Global Resources Fund (PSPFX).

The unemployment rate in September declined 0.2 percent to end at 5.9 percent, the first time it’s been below 6 percent since 2008.

Unemployment Rate Drops to Lowest Percentage Since Summer of 2008

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On the decline as well are initial jobless claims. According to the latest weekly data, new claims amounted to 264,000, a decrease of 23,000 from the previous week. Amazingly, this is the lowest level we’ve seen since April 2000.

This improvement is so dramatic, in fact, that initial claims are down more than four-and-a-half standard deviations from the mean, a move we haven’t seen since soon after the height of the 2008-2009 recession.

Initial Jobless Claims Down More Than 4.5 Standard Deviations

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Consumer confidence is also at pre-recession levels, up 9.2 percent in September from last year. Although new and existing home sales in the U.S. have remained tepid, strong auto sales suggest that Americans are feeling more comfortable about making large purchases. This is good for steel, aluminum, platinum, palladium and other resources used in manufacturing automobiles.

Vehicle Sales in the U.S. Have Accelerated Steadily Since 2009

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As always, you can find something to dampen welcome news, and in this case, it’s a steadily diminishing workforce. Since its peak in early 2002, the labor force participation rate, which measures the number of Americans who are either employed or actively seeking employment, has declined to a 36-year low of 62.7 percent. There are many potential combinations of social and economic factors that might explain why this is the case: discouragement finding steady work, family- or health-related issues, an aging population, and others.

Labor Force Participation Rate at Its Lowest Since 1977

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Bob and Weave

Regardless, Coolidge’s message that the United States, pound for pound, is the best place on earth to invest and produce is just as accurate today as it was then. Where, for instance, did recently-elected Indian Prime Minister Narendra Modi initially visit to broker new business opportunities and partnerships? Certainly not France.

Presidents Coolidge and Clinton both oversaw strong economic and employment growth Another former president, my friend Bill Clinton—whose economic performance nears, and in some areas surpasses, Coolidge’s—once perceptively observed: “There is nothing wrong with America that cannot be cured by what is right with America.”

I couldn’t agree more. Our nation isn’t perfect. Burdensome taxes and overreaching regulations continue to stand in the way of optimal economic conditions, a theme I touched upon most recently regarding our Global Competitiveness Index score.

Despite such missteps, America has shown time and again that even when we stumble, we quickly find our footing, wipe the sweat from our eyes and prepare for the next round.

Get in the ring by checking out our Near-Term Tax Free Fund (NEARX), which recently earned the coveted five-star rating from Morningstar* for the five-year performance period and four stars overall. You can see the fund’s performance here.

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Morningstar Rating

Overall/164
3-Year/164
5-Year/137
10-Year/103

Morningstar ratings based on risk-adjusted return and number of funds

Category: Municipal National Short-Term Funds

Through: 09/30/2014

Bond funds are subject to interest-rate risk; their value declines as interest rates rise. Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local income taxes, and if applicable, may subject certain investors to the Alternative Minimum Tax as well. The Near-Term Tax Free Fund may invest up to 20% of its assets in securities that pay taxable interest. Income or fund distributions attributable to capital gains are usually subject to both state and federal income taxes. The Near-Term Tax Free Fund may be exposed to risks related to a concentration of investments in a particular state or geographic area. These investments present risks resulting from changes in economic conditions of the region or issuer.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in specific industries, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

Morningstar Ratings are based on risk-adjusted return. The Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance does not guarantee future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar Ratingä based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.)

The A.T. Kearney Foreign Direct Investment Confidence Index, establish in 1998, examines overarching trends and ranks countries on how changes in their political, economic, and regulatory systems are likely to affect foreign direct investment (FDI) inflows in the coming years.

The University of Michigan Confidence Index is a survey of consumer confidence conducted by the University of Michigan.  The report, released on the tenth of each month, gives a snapshot of whether or not consumers are willing to spend money.

Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility.

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