Blog   Tagged ‘employment’

Manufacturing and Technology: A New Workforce Dynamic

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How do you find the right employees for your organization? A panelist of leaders in the manufacturing industry shared their struggles and successes with the ever-changing workforce.

Panelists:

Jon Kinning, COO, RK Mechanical, Inc.
Kim Madigan, CEO, AdamWorks
Bill Newland, CEO, Hercules Industries
Kevin Fink, CEO, Ice-O-Matic

Moderator:

Bart Taylor, Founder/Publisher, Company Week

Next month, we’ll bring you these panelists’ insights on education and technology advancements.

 

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Top 10 Market and Economic Variables to Watch…and 3 to Ignore – Part IV

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Refresh yourself on the entire Top 10 market and economic variables you should be watching closely: part 1part 2part 3.

Now it’s time to tell you the three things we think you should ignore! While there aren’t any variables that are truly ignored, perhaps the value of these three variables isn’t worth the attention they often get.

THREE TO IGNORE

3. The Noise: Data vs. Information

This is a classic case of data versus information. Data consists of facts, which become information, as it conveys meaning to investors. For example, computers process data without any understanding of what the data represents. Similarly, investors are bombarded with headlines, facts and figures — in other words, data. Without the proper context behind the numbers and headlines being thrown at them, it just becomes noise.  When investors attempt to process all of this, it makes it hard to decipher what data is giving them the information they need to make investment decisions. Investors would be wise to focus on a few key variables (like the ones we told you about earlier), and filter out all of the other noise.

2. Headline Unemployment Rate

The headline unemployment rate, specifically, the primary measurement: U3, does not accurately reflect the employment picture. The official unemployment rate, which measures the proportion of the civilian labor force 16 years or older that are jobless but actively seeking employment, can be either overstated or understated. This could be due to discouraged workers, part-time workers and unreported legal or illegal employment. Taken together, these measurement problems suggest that the official unemployment rate is likely understated during business-cycle contractions and overstated during business-cycle expansions.

The unemployment rate peaked at 10 percent in 2009 and then trended lower down to the current 6.3 percent. However, in the same period, the participation rate, a measure of the active portion of an economy’s labor force also came crashing down from 65.7 percent to an all-time low of 62.8 percent. It appears that most of the drop in the unemployment rate may be attributed to a falling participation rate—less people searching for a job rather than new jobs being created. This particular headline statistic is one that should probably be ignored.

1. What the Federal Reserve Says

Forecasting interest rates is extremely difficult. The Federal Reserve has a difficult time with it too.  In the past, the Fed has under promised and then over delivered. In 1994, 1999 and 2004, the Fed’s projection of Fed funds was not as accurate as one would expect. In each of those years listed, Fed funds were higher than the Fed had forecasted. Last year, the Fed began to taper its bond-buying activity, also known as quantitative easing. Having reduced their activity each month, we expect them to continue doing this until the program is terminated. Hiking interest rates is also being talked about, but we think that is noise in the markets. All in all, we recommend watching what they do, not what they talk about.

With all of the data investors could consume on any given day, at any given hour, this top 10 list of market and economic indicators and 3 to ignore, is a guide to cutting the clutter to get to the information needed to best understand today’s economic environment.

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DISCLOSURE AND IMPORTANT CONSIDERATIONS:

UMB Private Wealth Management is a division within UMB Bank, n.a. that manages active portfolios for employee benefit plans, endowments and foundations, fiduciary accounts and individuals.  UMB Financial Services Inc * is a wholly owned subsidiary of UMB Bank, n.a. UMB Bank, n.a., is an affiliate within the UMB Financial Corporation. Banking and trust services offered through UMB Private Wealth Management, a division within UMB Bank, n.a.

This report is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. Statements in this report are based on the opinions of UMB Private Wealth Management and the information available at the time this report was published.

All opinions represent our judgments as of the date of this report and are subject to change at any time without notice. You should not use this report as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. This report contains no investment recommendations and you should not interpret the statements in this report as investment, tax, legal, or financial planning advice. UMB Private Wealth Management obtained information used in this report from third-party sources it believes to be reliable, but this information is not necessarily comprehensive and UMB Private Wealth Management does not guarantee that it is accurate.

All investments involve risk, including the possible loss of principal. This information is not intended to be a forecast of future events and this is no guarantee of any future results. Neither UMB Private Wealth Management nor its affiliates, directors, officers, employees or agents accepts any liability for any loss or damage arising out of your use of all or any part of this report.

“UMB” – Reg. U.S. Pat. & Tm. Off. Copyright © 2012. UMB Financial Corporation. All Rights Reserved.

*Securities offered through UMB Financial Services, Inc. member FINRA, SIPC, or the Investment Banking Division of UMB Bank, n.a.

Insurance products offered through UMB Insurance, Inc. You may not have an account with all of these entities. Contact your UMB representative if you have any questions.

Securities and Insurance products are:

NOT FDIC INSURED * NO BANK GUARANTEE * NOT A DEPOSIT * NOT INSURED BY ANY GOVERNMENT AGENCY * MAY LOSE VALUE


K.C. Mathews joined UMB in 2002. As executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.



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Top 10 Market and Economic Variables to Watch…and 3 to Ignore – Part III

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Here are the last four of our Top 10 list. Look back on part 1 and part 2 if you missed them! But check back in a couple weeks for the three things we think you should ignore!

4. Government Spending

Government spending is approximately 18 percent of the Gross Domestic Product (GDP) formula. Remember the potential fiscal cliff that was scheduled to become effective on December 31, 2012? If that combination of expiring tax cuts and across-the-board government spending cuts had been executed, the economy would have been pushed into a recession.  Sequestration, a result of the fiscal cliff, only lasted a year. In January 2014, a new $1.1 trillion budget was signed and sequestration essentially evaporated.

Federal spending is on the rebound and state and local governments are, on a relative basis, in better financial shape than we have seen in many years.  Governments are now spending money and we anticipate that they will make a positive contribution to GDP growth.

3. Housing Momentum

Housing is an important variable in the economy because housing starts mean more jobs. For every housing start, we estimate that there are three direct jobs created (carpenters, roofers, etc.) and another three indirect jobs (carpet manufactures, appliance manufacturing, etc.). We think homebuilder surveys tend to lead to housing permits and starts. Right now, homebuilder surveys are robust and support our forecast of 1 million new home starts in 2014.

Rising mortgage rates and home prices, along with weaker household formation growth, may slow housing activity, but it will not turn negative.

2. Confidence

Consumers and business owners gain confidence in the economy as uncertainty wanes. An increase in confidence is an encouraging signal that consumption and economic activity will be on the rise. The University of Michigan Survey of Consumer Confidence and the National Federation of Independent Businesses Small Business Optimism Index measure the consumer and business owner’s confidence levels. Both indices trended lower long before the Great Recession and the equity market peak in October of 2007. In addition, the indices turned to a positive trend early in 2009, long before the market bottom and the end of the recession.

Confidence data is at a five-year high due to the rising stock market, a strong labor market and all-time high household net worth. With consumers feeling good, we anticipate that consumption will continue.

1. Consumption

Consumption drives GDP and consumption is 68 percent of the GDP formula. If consumption growth is robust and increasing, we think GDP will follow that path.

Personal consumption expenditures have been disappointingly flat. Although spending has increased, it’s nowhere near the level required to advance economic growth to more than 3 percent. Advance retail sales also show positive growth, but only supporting mediocre GDP growth.

 

Of all the noise out there, these are the top 10 market and economic variables to watch closely. But what isn’t often discussed are the three that should be ignored. We’ll bring you those soon!

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

DISCLOSURE AND IMPORTANT CONSIDERATIONS:

UMB Private Wealth Management is a division within UMB Bank, n.a. that manages active portfolios for employee benefit plans, endowments and foundations, fiduciary accounts and individuals.  UMB Financial Services Inc * is a wholly owned subsidiary of UMB Bank, n.a. UMB Bank, n.a., is an affiliate within the UMB Financial Corporation. Banking and trust services offered through UMB Private Wealth Management, a division within UMB Bank, n.a.

This report is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. Statements in this report are based on the opinions of UMB Private Wealth Management and the information available at the time this report was published.

All opinions represent our judgments as of the date of this report and are subject to change at any time without notice. You should not use this report as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. This report contains no investment recommendations and you should not interpret the statements in this report as investment, tax, legal, or financial planning advice. UMB Private Wealth Management obtained information used in this report from third-party sources it believes to be reliable, but this information is not necessarily comprehensive and UMB Private Wealth Management does not guarantee that it is accurate.

All investments involve risk, including the possible loss of principal. This information is not intended to be a forecast of future events and this is no guarantee of any future results. Neither UMB Private Wealth Management nor its affiliates, directors, officers, employees or agents accepts any liability for any loss or damage arising out of your use of all or any part of this report.

“UMB” – Reg. U.S. Pat. & Tm. Off. Copyright © 2012. UMB Financial Corporation. All Rights Reserved.

*Securities offered through UMB Financial Services, Inc. member FINRA, SIPC, or the Investment Banking Division of UMB Bank, n.a.

Insurance products offered through UMB Insurance, Inc. You may not have an account with all of these entities. Contact your UMB representative if you have any questions.

Securities and Insurance products are:

NOT FDIC INSURED * NO BANK GUARANTEE * NOT A DEPOSIT * NOT INSURED BY ANY GOVERNMENT AGENCY * MAY LOSE VALUE


K.C. Mathews joined UMB in 2002. As executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.



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Top 10 Market and Economic Variables to Watch…and 3 to Ignore – Part II

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A couple weeks ago we told you the first of 10 variables to look for in the economy – Earnings Momentum and High Yield Spread. Here are the next four variables.

8. The Bond Market

The bond market, specifically, the 10-year Treasury note, may offer clues on the direction of the economy. Since the U.S. bond market is the largest and most liquid market in the world, the 10-year Treasury has often been used as a “fear” trade. When global uncertainty looms, investors seek a safe harbor against uncertainty and move into the U.S. bond market. As prices increase and yields move lower, this move has been an indicator that economic growth is in question.

The most recent trading range of the 10-year Treasury note has been between 2.4 and 3.0 percent, suggesting we will see moderate economic growth for the remainder of the year. Due to improving economic activity, a stable employment horizon and a hint of inflation, we think the 10-year Treasury will close the year around 3 percent.

7. Help Wanted Signs

Inflation can come in many forms, such as commodity inflation, wage inflation, and so on. The Federal Reserve (Fed) focuses on an inflation index called the “core personal consumption expenditures”(PCE), which excludes food and energy. Historically, food and energy inflation have been very volatile, and therefore are excluded in this index. We think wage inflation is the sustainable inflation. U.S. average hourly earnings have grown less than 2.5 percent each year for the last five years.  However, as the labor market tightens, we would expect some wage inflation. Job openings peaked in 2007 prior to the Great Recession.

Since 2009 job openings have been on the rise.  As the labor market gets tighter, we think it will lead to a continued increase in core inflation.

6. Commercial and Industrial (C&I) Lending Standards

Banks and credit are the lifeblood of the economy. When credit is readily available, business owners are more willing to expand their business and hire workers. Lending standards lead payroll growth by approximately nine months. In the middle of the recessions in 2001 and 2008, lending standards improved, and it was a clear signal that job growth was right around the corner.

The Fed’s Senior Loan Officer Surveys measure the tightening or loosening of loan standards, and there has been a dramatic improvement since 2010. C&I loan growth is up over 10 percent so far this year and we have seen an average of 215,000 jobs created each month in 2014, substantially better than last year.

5. The Slope of the Yield Curve

The shape of the yield curve (the difference between short and long rates) gives insight to economic growth. A very steep yield curve would indicate strong economic growth prospects, and an inverted yield curve (short rates higher than long rates) has an impressive track record of predicting an oncoming recession. The yield curve inverted a year prior to the recessions in 1980, 1981, 1991, 2001 and 2008. In fact, in the past half century, the yield curve has inverted prior to each recession.

Even though we saw the economy contract in the first quarter of 2014, we are confident that this is an anomaly since the yield curve is so steeply sloped.

Later this month, we’ll bring you the rest of the Top 10 variables to watch.

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

DISCLOSURE AND IMPORTANT CONSIDERATIONS:

UMB Private Wealth Management is a division within UMB Bank, n.a. that manages active portfolios for employee benefit plans, endowments and foundations, fiduciary accounts and individuals.  UMB Financial Services Inc * is a wholly owned subsidiary of UMB Bank, n.a. UMB Bank, n.a., is an affiliate within the UMB Financial Corporation. Banking and trust services offered through UMB Private Wealth Management, a division within UMB Bank, n.a.

This report is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. Statements in this report are based on the opinions of UMB Private Wealth Management and the information available at the time this report was published.

All opinions represent our judgments as of the date of this report and are subject to change at any time without notice. You should not use this report as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. This report contains no investment recommendations and you should not interpret the statements in this report as investment, tax, legal, or financial planning advice. UMB Private Wealth Management obtained information used in this report from third-party sources it believes to be reliable, but this information is not necessarily comprehensive and UMB Private Wealth Management does not guarantee that it is accurate.

All investments involve risk, including the possible loss of principal. This information is not intended to be a forecast of future events and this is no guarantee of any future results. Neither UMB Private Wealth Management nor its affiliates, directors, officers, employees or agents accepts any liability for any loss or damage arising out of your use of all or any part of this report.

“UMB” – Reg. U.S. Pat. & Tm. Off. Copyright © 2012. UMB Financial Corporation. All Rights Reserved.

*Securities offered through UMB Financial Services, Inc. member FINRA, SIPC, or the Investment Banking Division of UMB Bank, n.a.

Insurance products offered through UMB Insurance, Inc. You may not have an account with all of these entities. Contact your UMB representative if you have any questions.

Securities and Insurance products are:

NOT FDIC INSURED * NO BANK GUARANTEE * NOT A DEPOSIT * NOT INSURED BY ANY GOVERNMENT AGENCY * MAY LOSE VALUE


K.C. Mathews joined UMB in 2002. As executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.



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Federal Reserve Exit Plan

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UMB Bank’s Chief Investment Officer KC Mathews and his team recently gathered for a round table discussion regarding the Federal Reserve’s exit plan. The Fed’s decision not to begin tapering the stimulus was a largely unanticipated move for the financial markets. As explained in detail during this podcast, the Fed based this decision on data correlated with employment, inflation, the debt ceiling and housing recovery.

Learn what this latest move means for investors.

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UMB Investment Management is a division within UMB Bank, n.a. that manages active portfolios for employee benefit plans, endowments and foundations, fiduciary accounts and individuals. UMB Financial Services, Inc.*  is a wholly owned subsidiary of UMB Bank, n.a. UMB Bank, n.a., is an affiliate within the UMB Financial Corporation.

This content is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. Statements in this report are based on the opinions of UMB Investment Management and the information available at the time this report was published.

All opinions represent our judgments as of the date of this report and are subject to change at any time without notice. You should not use this report as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. This report contains no investment recommendations and you should not interpret the statements in this report as investment, tax, legal, or financial planning advice. UMB Investment Management obtained information used in this report from third-party sources it believes to be reliable, but this information is not necessarily comprehensive and UMB Investment Management does not guarantee that it is accurate.

All investments involve risk, including the possible loss of principal. Past performance is no guarantee of future results. Neither UMB Investment Management nor its affiliates, directors, officers, employees or agents accepts any liability for any loss or damage arising out of your use of all or any part of this report.

“UMB” – Reg. U.S. Pat. & Tm. Off. Copyright © 2012. UMB Financial Corporation. All Rights Reserved.

*Investment Products Offered Through UMB Financial Services, Inc

Member FINRA, SIPC

NOT FDIC INSURED/ NO BANK GUARANTEE/ MAY LOSE VALUE


K.C. Mathews joined UMB in 2002. As executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.



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