The Jobs Report Was In Fact a Disaster
About that jobs report.
Upon closer inspection, the report was a total disaster. You wouldn’t know this from the financial media’s coverage, but it was.
The establishment survey shows a gain of 288,000 jobs last month. However, the household survey shows that that the economy lost 73,000 jobs in April.
This is critical. The household survey does not allow for “duplication of individuals,” meaning that if someone holds more than one job, they’re only counted once. In contrast, if someone is working multiple low paying jobs, every single job will be counted in the establishment survey.
Put it this way. If you go from one solid full time job to working as a waiter, cab driver, and tossing pizzas, the establishment survey will show that the economy created TWO jobs (one job lost plus three started= two jobs net) whereas the household survey will show NO growth (one person lost a job and started working elsewhere).
With this in mind, you should be paying attention to the household survey. The household survey shows 73,000 jobs were LOST. This negates the claim that 288,000 were created.
Aside from this oddity, we find that 806,000 people left the labor force. Moreover, reentrants (folks returning to the labor force after being unemployed) fell 417,000. And new entrants (folks entering the labor force for the first time) fell 126,000.
So the number of people in the labor force fell as did the number of people returning to the labor force and the number of folks entering the labor force for the first time.
And yet somehow the jobs picture is supposedly rosy?
In all honesty, this report was totally abysmal. Anyone who spent 2-3 minutes digesting it knows this. But this doesn’t stop the media from trumpeting the drop in the unemployment rate (due to nearly 1 million people leaving the labor force), nor does it counter the claims that 288K jobs were created.
The economy is showing serious warning signs. The fact that stocks are holding up based on misguided hope and delusion makes for a very dangerous environment similar to that of late 2007.
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Phoenix Capital Research
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