Bureau of Labor Statistics
For the New Year, it seems that SOH, that last true refuge for pensive brooding bears, has been overrun with pompous bulls peddling & pumping a new 21st century high tech plateau of permanent prosperity, that would make even Irving Fisher's rose twittering cheeks blush. I wonder if old Irving would have Linked himself In or posted his rip roaring 20s rosy market views on a pretty pink Facebook page?
Money is only as useful as to what it can purchase. The Fed has created a system where debt is now equal to money. This is why big purchases like cars, housing, and even going to college are only feasible by mortgaging your future for many decades. Since the payments are broken down into tiny monthly installments many people pay little attention to the true cost of things over their lifetime. Yet, as MyBudget360 shows, over time, the U.S. dollar has lost a tremendous amount of purchasing power due to inflation. Inflation slowly eats away at your purchasing power yet having access to debt has given the middle class the false impression that they are still protected from the unraveling impacts of inflation. They are not...
Despite the BLS claiming no states estimated their data and the previous week's apparently errant (but significantly not revised lower), the claims data this week saw its biggest week-over-week percentage drop since January 2006 (which ironically almost perfectly bottom-ticked the previous 'recovery' claims improvements). Continuing claims, however, rose for the 3rd week in a row - the largest 3-week rise in since March 2009! Of course, the more critical part of the labor department's report is the end of the Emergency Unemployment Compensation (EUC) program which will pay one more claim this week and then 1,333,332 will begin to lose their benefits. EUC benefits cannot be paid for any week of unemployment after Dec 28th (which, of course, is great news for the unemployment rate).
Each quarter the Fed releases their assessment of the economy along with their forward looking projections for three years into the future. The reality is, however, is that the Federal Reserve simply cannot verbally state what they really see during each highly publicized meeting as it would roil the markets. Instead, they use their communications to guide the markets expectations toward reality in the hopes of reducing the risks of market dislocations. The most recent release of the Fed's economic projections on the economy, inflation and unemployment continue to follow the same previous trends of weaker growth, lower inflation and a complete misunderstanding of the real labor market. Reminiscent of the choices of Goldilocks - the reality is that the Fed's estimates for economic growth in 2013 was too hot, employment was too cold and inflation estimates were just about right. The real unspoken concern should be the continued threat of deflation and what actions will be available when the next recession eventually comes.
What do the social classes owe each other? Do people on public assistance really take advantage of the system ?
For everyone who shrugged off last week's enormous spike in initial jobless claims as "can't be real", the BLS has another "holiday volatility"-blamed statistical anomaly for traders to ignore. Initial claims rose 10k to 379k - dramatically worse than the 336k expectation - and the worst since March. Though the BLS says no states estimated jobless claims last week, they would suggest, ever so humbly, that we ignore this data and focus on the trend of the 4-week moving average. Total benefit rolls also rose to 3 month highs, up 94k to 2.88 million. The piece de resistance - non-seasonally-adjusted initial claims were down 48.2k (against the seasonally-adjusted 10k), yet both are up exactly 13k from a year ago (seems the Sandy-based YoY adjustments are playing havoc). Lastly, 1,374,031 American on Emergency Unemployment Compensation (ie. extended benefits) - which are about to run out thanks to Congress (which will implicitly send the unemployment rate plunging).
There are those who would blame the people who have chosen to live far beyond their means. They have a point. The financialization of America; where Wall Street con artists,shysters and swindlers rake in billions for shuffling paper and making risky casino bets; mega-corporations ship blue collar middle class jobs to Asia in an all out effort to increase quarterly profits; politicians spend future generations into the poor house in order to get re-elected; and the Federal Reserve purposefully creates monetary inflation to prop up the corrupt system; has systematically destroyed the working middle class and created generations of debt slaves. The American people have been foolish, infantile, and easily duped. But it is clear to me who the real culprits in our long downward spiral have been. Lord Acton stated the obvious, many years ago:
“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”
? John Emerich Edward Dalberg-Acton
While the BLS may be searching far and wide for evidence of hedonically-adjusted "core" inflation, and not finding it anywhere (expect in assets, housing prices, food and energy, but apparently all America buys every day are LCD TVs and iPads), one place where not even the BLS can hide what is clear and present "inflation" is college grade point averages, and especially grades for humanities courses, where as the saying goes pretty much everyone is "above average." And, as JPM adds, "Soon, colleges will have to “turn the dial up to 11” or else everyone will have the maximum GPA." Well, in a society where the push is to make everyone equal, it would only be fair for everyone to get the exact same perfect grades...
After posting a surprising drop in November to -2.21, or only its first negative print since a freak first half of 2013 aberration, the spin was quick to explain away the drop with the government shutdown, which surprisingly affected precisely nothing else in the economy but just a few diffusion indices (and led to epic surges in various PMI prints). Moments ago, the December Empire Fed PMI print came out, and it was once again a dud, printing at 0.98 on expectations of a rise to 5.00 which also was the fifth consecutive miss to expectations in a row. The decline was driven by ongoing weakness in New Orders, which remained negative at -3.54, while Unfilled Orders tumbled deep into the red, from -17.11 to -24.10, while inventories supposedly cratered from -1.32 to -21.69. We say supposedly because other recent surveys have shown that the surge in inventory accumulation from Q3 into Q4 has continued.
November Producer Prices Decline For Third Consecutive Month, Rising Pork Offset By Falling Chicken PricesSubmitted by Tyler Durden on 12/13/2013 09:46 -0400
In the aftermath of a series of "better than expected", and thus "taper on" economic data, there is just one wildcard remaining for the Fed: inflation, or rather the lack thereof. And while next week's CPI report will be very closely watched in this regard, producer prices also provide a glimpse into pricing pressures and resource slack. And judging by the just announced -0.1% drop in finished goods producer prices in the month of November, below the 0.0% expected if up from last month's -0.2%, which happens to be the third consecutive decline in overall PPI, a first in the past year, the Fed's December taper decision just got even more complicated. Looking into the components, core PPI rose by the tiniest possible fraction, or 0.1%, in line with expectations, while it was energy prices that dipped 0.4%, pulling the overall number lower with the BLS noting that home heating oil's 5.7% decline was among the key culprits for the drop. Food producer prices were unchanged for the month, with higher prices for pork offset by lower prices for processed young chickens.
This past Friday the Bureau of Labor Statistics released the November jobs report which sent the mainstream analysts and economists into an ecstatic state as the numbers were substantially stronger than estimates. However, in reality, the employment report continues to show that employment is being driven almost entirely by population growth rather than real economic strength. The long term implications of these secular shifts are crucially important to the future of everything from investing, to living and the future of our economy. It is not too late to change our future, but it eventually will be if we do not begin to make changes soon.
While much has been said about the benefits of Bernanke's wealth effect to the asset-owning "10%", just as much has been said about the ever deteriorating plight of the remaining debt-owning 90%, who are forced to resort to labor to provide for their families, and more specifically how their living condition has deteriorated over not only the past five years, since the start of the Fed's great experiment, but over the past several decades as well. However, in the case of America's "servant" class, Al Jazeera finds that their plight is now worse than it has been at any time over the past century, going back all the way to 1910!
Back in September, courtesy of an unprecedented discrepancy between the JOLTS "net turnovers" (or hires less separations) print, which traditionally has been the equivalent of the NFP's establishment survey monthly job additions, we highlighted just what happens when the BLS has caught itself in a estimation lie, and is forced to adjusted the data set both concurrently and retroactively to correct for cumulative error. We suggested that as a result of this public humiliation, the BLS would have no choice but to ramp up its monthly net turnovers print in order to "catch up" to what the monthly payrolls survey indicated is America's "improving" jobs picture. Sure enough, when moments ago the latest October JOLTS survey was released, the October "net turnovers" number soared from 155K in September to a whopping 260K in October, more than eclipsing the revised NFP print of 200K job gains in October, and leading to the second highest JOLTS turnover print since February's 271K, and before that - going back all the way to the 287K in February of 2012. And yes, this was in the month when the government had shut down and the result was supposedly major, if temporary, job losses.
We're baffled by the storyline portrayed by the dying legacy media, sponsored by Wall Street and the CEO executive suites of mega-corps, and supported by the propaganda data agencies of the U.S. government. The BLS, BEA, CBO, CNBC, CNN, and a myriad of other government sponsored letters present supposedly accurate data that is designed to convince the ignorant masses everything is fine and their lives are improving. For anyone willing to uncover the facts and think critically about the storyline being presented, an entirely different reality is revealed. The simple chart below obliterates the “official” storyline. Do you have the uncomfortable feeling that your financial situation has been declining for the first 13 years of the 21st Century?
Applying a realistic labor force participation rate to the unemployment rate series, shows that the real US unemployment rate is now 11.5%, a 4.5% difference from the reported number, and the second highest ever, only better compared to October's 4.7%.