“...parts of the U.S. jobs report for January seem fishy...”
There is no productivity mystery, only a distinct and illegitimate lack of curiosity on the part of economists to simply take the Establishment Survey as gospel regardless of how little it fit the rest of the world. It also calls into question the legitimacy of the FOMC and monetary policy that was certainly subject to, and predicated upon, the same quackery. No matter how little the payroll reports described the economy as it was, including the relation to GDP, they held on to nothing else to instead deny everything.
Starting with the infamous month when it all started falling apart, December 2007, the US has added just 186,000 native-born workers, offset by 13.5x times more, or 2,518,000, foreign born workers.
Factory orders are collapsing. Inventories are at recession cycle highs. Manufacturing ISM and PMIs are plunging... so Dear BLS, please explain the following chart?
Not only is the specter of recession growing more visible, but it is also attached to a truth that cannot be gainsaid. Namely, having stranded itself at the zero bound for an entire business cycle, the Fed is bereft of dry powder.
"With January looking like a loser, there is a 70% chance that February will decline also. The high degree of risk of further declines in February would likely result in a confirmation of the bear market. This is not a market to be trifled with. Caution is advised."
If the Wall Street Journal meant to reach for reassuring comfort, they fell far short. After spending late summer last year and into the fall proclaiming that manufacturing didn’t matter (12%), the newest round of talking points are “false positives.” In other words, manufacturing and industry does matter, after all, but just “not enough” to tip into full recession. Last year was supposed to be “the” year because of faith in only the BLS’ numbers. It was advertised as full deliverance of the promises of QE and ZIRP, but instead 2015 delivered only recessionary impressions.
"Most Of Us Ended Up At Office Depot": Thousands Of Angry Students "Flood" Government With Demands For Debt ReliefSubmitted by Tyler Durden on 01/21/2016 18:05 -0500
"In the past six months, more than 7,500 borrowers owing $164 million have applied to have their student debt expunged under an obscure federal law that had been applied only in three instances before last year," WSJ wrote on Wednesday. Imagine the shock when the US public suddenly realizes that bailing out jobless students isn't compatible with the "robust" labor market rhetoric.
Since 2011, when the E/P ratio for those with less than a high school diploma bottomed, that metric has regained almost two-thirds of its recessionary losses (orange line in chart). But the E/P ratio for high school or college graduates – i.e., eight out of nine American adults – has not recovered any of its recessionary losses, and has barely budged in four years (purple line). This data underscores how the jobs recovery has been spearheaded by cheap labor, with job gains going disproportionately to the least educated — and lowest-paid — workers.
While the trend of US trade partners exporting deflation either across the Atlantic or Pacific continues, one name continues to stand out. China.
Welcome to the recovery: a record number of Americans who are retired, or are collecting Social Security, worked part-time last month.
The problem is that when this sucker goes down, to paraphrase the immortal words of George W. Bush, you have to wonder how much other stuff of everyday life for everyday people it will take down with it. The discovery phase of our predicament began ever so crisply in the very first business week of the new year. The loss of faith in value of all kinds will play out sequentially. It is starting in financial “assets” because so many of these are just faith-based stories, and in this quant-and-algo age it has gotten awfully hard to tell what is good story and what is just a swindle.
Here’s a newsflash that CNBC didn’t mention. According to the BLS, the US economy generated a miniscule 11,000 jobs in the month of December.
As we noted earlier, while the headline payrolls print blew away consensus estimate, printing above the highest expectations, there was a rather unpleasant number in the data: nominal average hourly wages actually dipped by 1 cent to $25.24. What caused this? There are three reasons.