pal who trades bonds for a living sent me his thoughts on the NFP
numbers. An interesting take. His thinking on the birth/death adjustment
in July is an early warning of what will come. I also like his comments
re: QE2 and a short term back up in rates. Just another view; this guy
has been good.
Quick Take: the numbers are not great. Some will want you to believe
that we are 10-12mos into a recovery – we should not be losing 125k jobs
at this stage.
Worse, Weekly Hours Worked edged down 0.1%. (This is a leading
indicator to employment, though we cannot read all too much into one
month’s data. Though if we see a tick down again next month, look out.)
The Unemployment Rate went down – great news, right? Not when it
retreats by way of Labor Force Participation loss:
“The civilian labor force participation rate fell by 0.3 percentage
point in June to 64.7 percent. The employment-population ratio, at 58.5
percent, edged down over the month.”
We actually have 301,000 less people working this month than last month
(139,420 May vs 139,119 June), but since the labor force decreased by
652,000, less were actually counted as unemployed, and that helped the
headline number:
May calculation: [14,973 Unemployed] / [154,393 Labor Force] =
9.7%
June calculation: [14,623 Unemployed] / [153,741 Labor Force] =
9.5%
That’s not improvement. It’s a faulty data point to consider: the UE
Rate is not capturing what’s going on. We should not be looking at it.
Consider that the Labor Force has flat lined over the last 3+ years.
This is due to discouraged workers, not because the population stopped
growing:
Had the Labor Force Participation rate not dropped so severely over the
last 3 years, we’d have a Labor Force around 157,500. This would equate
to a UE around 11.6%. So we have nearly 2% of UE shaved off by Labor
Force Participation alone.
The alternative measures of UE:
U-6 to 16.5% from 16.6% seasonally adjusted.
U-6 to 16.1% from 16.7% NOT seasonally adjusted.
Private Payrolls were up 83,000 though, so that’s improvement, right?
We’ll see – without the birth/death “guess” of how many new small
business were started this month, we’d have been at -64,000.
Birth/death is added every month, and then adjusted in Jan and July,
with hindsight, for ‘wrong’ guesses. Birth/death has added 728,000 jobs
since February. Next month comes the adjustment – the last adjustment
was in January, when they took away 427,000 of the previously added
jobs. We’ll find out next month if the BLS found they were too
optimistic in 1H2010.
With a Zero interest Rate Policy, Census hiring, QE and Stimulus mostly
behind us, we’re heading the wrong way. While I have been, and still
firmly am, in the deflation/lower rates camp, watch out for another
head-fake and a period of higher rates like we saw in the fall and
winter. In my opinion, should be very concerned about Bernanke/Obama
feeling backed into a corner and going “all in” with another massive
round of QE (and I mean massive). In fact, considering the election
cycle, I’d be very surprised if this does not happen. We need to take
our medicine, but what we’ll get is another dose of methadone, dragging
this out for years more….
" Harmlessly passing your time in the grassland away,
Only dimly aware of a certain unease in the air...."
"That's what you get for pretending the danger's not real
Meek and obedient you follow the leader down well trodden corridors into the fire and steel
What a surprise! A look of terminal shock in your eyes!..."
Pink Floyd 1977
I called Rupert Murdoch but he was laughing HAO when I said journalism,
he said go watch World cup and I did so
maddy
I called Rupert Murdoch but he was laughing HAO when I said journalism,
he said go watch World cup and I did so
maddy
If Walter Cronkite were at the anchor desk today, they'd have to kill him.
Kronkite was a member of the same group that dead Senator Byrd never stopped loving.
Dr. Sandi, Cronkite was as much an establishment shill as the best/worst of them.
He crooned "news" into America's eyes and ears during some of the most egregious crimes being committed right before our collective eyes.
What we are facing now is merely the culmination of what was begun ight under his watchful eyes.
Actually a little tin-f hat-on research will tell you even more.
Nope, no white-knight is going to come this time.
All up to us now.
ORI
http://aadivaahan.wordpress.com
I beg to differ. Cronkite actually had the guts to piss off the corporate bosses. Okay, not often, but he did it.
Personally, I prefer his predecessor, Edward R. Murrow, who actually had a fully loaded scrotum. But he was way too hard core for Dr. Stanton and the yes-men of the Tiffany Network.
But compared to the fluffy-haired, vacuous pieces of shit who are shilling for the man now, Cronkite was a god. From time to time, he listened to his conscience and spoke up for the right side. Or covered a story that THEY didn't want covered.
No, he's not up there with the best/worst of them.
The WORST of them are working now in the media, calling themselves journalists. They ought to be calling themselves back home to their maker instead.
Don't get me started on Media. That's MY field.
Okay! It is MY field too, but I'm here in India so will give you the bully pulpit.
He was just not AS bad as now, which is true for most things, eh? Nothing or no-one was as bad then as now.
We get to be the lucky generation living and loving in bad times.
And they'll get badder before they get better.
ORI
http://aadivaahan.wordpress.com
MSM is bought and paid for shills. Ok, maybe the rare odd 'truth' slips out, yet all in all they know they truth and report something different.
Wake me up when American sheeple see something like this on TV:
www.youtube.com/watch?v=dib2-HBsF08
Very nice. Wake Up Amerika. Run the rascals into the East River. (provided we don't offend the people at the EPA)
That huge down-war revision in unemployment may be the "excuse" needed to justify QE 2.0 prior to November elections!
They would need to get the QE pipeline flowing real fast right now to have an effect by Nov (assuming it actually has any effects). If they wait until too close to the elections, people will be p/o'd about more reckless fiscal policy while the unemployed peasants eat cake.
QE 2.0 will only benefit bankster bonuses. Let the good times roll!
down-war revision....OH NOEZ!!!
Is this what the dollar sell-off is telling us?
Is this what the dollar sell-off is telling us?
Is this what the dollar sell-off is telling us?
Google agrees with you
http://merrillovermatter.blogspot.com/2010/07/is-google-trends-providing-sneak-peak.html
GE agrees with you
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