The financial media are gaga over the alleged great jobs numbers from last week.
We’ve been over this saga many times. The methodology for calculating jobs gains is not even close to accurate. The unemployment rate is now a marketing gimmick rather than an accurate economic metric.
Indeed, here are some staggering statistics that indicate just how messed up the US economy is right now.
· The labor participation rate is the lowest since 1978.
· There are over 90 million Americans without a job right now.
· An incredible 20% of all American families do not have a single member who is employed.
· There are over 47 million Americans on food stamps.
There is simply no way to spin these numbers. The US Federal Reserve has spent over $3.2 trillion and generated virtually no real job growth (accounting for population growth).
See for yourself:
When you account for how the potential labor pool has grown, the number of employed Americans has gone almost nowhere but down since the 2008 recession “ended.”
At the end of the day, spending money doesn’t create real job growth. An employer only hires someone if they believe that the person’s output will have a net benefit for the firm (meaning the money the person’s output brings in is larger than the money the firm pays them for their work).
That’s what creates a sustainable job. Spending money just to create some position where a person sits at work 50% of the time doing nothing is of no real long-term value to the economy, the person, or the firm.
In simple terms, the great attempt to prop up the US economy through spending and printing money is at an end. The world takes a long time to catch on to these changes, but the shift has already begun. It’s now just a matter of time before stocks figure it out.
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Phoenix Capital Research