Paul Craig Roberts: Economic Disinformation Keeps Financial Markets Up

Tyler Durden's picture

Submitted by Paul Craig Roberts,

Friday’s payroll jobs report is more of the same. The Bureau of Labor Statistics claims that 223,000 new jobs were created in April. Let’s accept the claim and see where the jobs are.

  • Specialty trade contractors are credited with 41,000 jobs equally split between residential and nonresidential. I believe these are home and building repairs and remodeling.
  • The rest of the jobs, 182,000, are in domestic services.
  • Despite store closings and weak retail sales, 12,000 people were hired in retail trade.
  • Despite negative first quarter GDP growth, 62,000 people were hired in professional and business services, 67% of which are in administrative and waste services.
  • Health care and social assistance accounted for 55,600 jobs of which ambulatory health care services, hospitals, and social assistance accounted for 85% of the jobs.
  • Waitresses and bartenders account for 26,000 jobs, and government employed 10,000 new workers.
  • There are no jobs in manufacturing.
  • Mining, timber, oil and gas extraction lost jobs.
  • Temporary help services (16,100 jobs) offered 3.7 times more jobs than law, accounting architecture, and engineering combined (4,500 jobs).

As I have pointed out for a number of years, according to the payroll jobs reports, the complexion of the US labor force is that of a Third World country. Most of the jobs created are lowly paid domestic services.

The well paying high productivity, high value-added jobs have been offshored and given to foreigners who work for less. This fact, more than the reduction in marginal income tax rates, is the reason for the rising inequality in the distribution of income and wealth.

Offshoring middle class jobs raises corporate profits and, thereby, the incomes of corporate owners (shareholders) and executives. But it reduces the incomes of the majority of the population who are forced into either lowly paid and part time jobs or unemployment.

The extraordinary decline in the labor force participation rate indicates shrinking opportunities for the American labor force. No economist should ever have accepted the claim that the economy was in recovery while participation in the labor force was declining.

The officially documented decline in the labor force participation rate casts additional doubt on the claimed increases in payroll jobs. If jobs are growing, the labor force participation rate should not be declining.

Having looked at the actual details of the payroll jobs report, which are seldom if ever reported in the financial media, let’s look at what else goes unreported in the media.

The government’s economic statistical agencies are under pressure not to roil the financial markets. Consequently, initial reports, which are always the headline reports, are as close as possible to the “consensus forecast” prepared by economists in the financial sector, whose jobs are to maintain a good atmosphere for financial instruments.

This practice results in optimistic advanced estimates and first estimates. The real reporting comes later in revisions. For example, today the headline was 223,000 new jobs, recovery on track, stock market up. What was not reported by the media is that the prior month’s (March) payroll jobs growth was cut to 85,000 jobs, substantially below population growth.

The same thing happens with the reporting of GDP growth. The first quarter GDP advanced estimate was kept in positive territory with a 0.2%–two-tenths of one percent–growth. When the revisions arrive, which we already know will be negative GDP growth due to the trade figure, they will not receive the same attention.

There are many additional problems with the economic reporting. I have written about a number of them in past reports. Here I will provide one more example. According to the payroll jobs report oil and gas extraction lost 3,300 jobs in April. This low number is inconsistent with what we know about layoffs from fracking operations. According to Challenger Gray, a private firm that tracks job cuts announced by corporations, in April 20,675 jobs were lost as a result of falling oil prices. That is more than six times the loss reported by the payroll jobs report.

Challenger Gray reports that during the first four months of this year, corporations have announced 201,796 job cuts. Obviously, corporations are not creating new jobs. That is why the BLS looks to waitresses, bartenders, remodeling contractors, government, and social services for employment growth.

Jobs offshoring has shriveled the employment opportunities for Americans. These shriveled opportunities are largely responsible for stagnation and decline in real median family incomes, for the falling labor force participation rate, for the rising inequality in the income and wealth distribution, and for student loans that cannot be repaid from the lowly paid jobs available. Corporations and Wall Street in pursuit of short-term profits have given the economy away. Much of the former US economy now belongs to China and India. Corporate executives and shareholders got rich off of this give-away.

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Latina Lover's picture

According to Shadow Stats, if

Publicus's picture

Nah, it's the money printing.

0b1knob's picture

< Disinformation.

< Datinformation.

TeamDepends's picture

One well-endowed lady here the other day calculated unemployment at over 41%, using simple no BS numbers.

TeethVillage88s's picture

Oh I see. 100% - Employed 59% = 41% aged over 16 in Labor Force Not Employed.

146M Employed/248M Total = 58.9% (59% Employed) 100-59= 41% Jobless
BLS Data shows you get 37% with 92 Million (16 and Older not working) / 248 Million (Total 16 and older). (BLS Data end of 2014).

92M/248M = 37% not in Labor Force
102M/248 = 48% Jobless based on RT with current population over 16 years of age (BLS Data end of 2014)
146M Employed/248M Total = 58.9% (59% Employed) 100-59= 41% Jobless

RT Total Jobless has to be considered I guess.

(Quick Check on 92 Million, 248 + 92 = 340 M which is obviously too high for total pop, has to be part of the 248 Million aged over 16 years of Age)

http://www.bls.gov/cps/cpsaat03.htm

Which seems in like with total population of 321 Million.

Normally I would do a check by adding 20 Million or 30 Million to the unemployment Total, but even in the Financial Crisis it was said to be only like 14.8 Million in 2010.

248 M / 321 M = 77.3% are working aged.

Note: Large Difference BTN RT Jobless total of 102.

"If you add the current number of Americans without a job (9.75 million) to the number of US citizens not in the labor force (92.02), you come up with 101.77 million working age Americans who do not have work, according to data from the US Bureau of Labor Statistics (BLS)."

Nearly 102 million working-age Americans jobless — RT USA
www.rt.com/usa/156800-americans-economy-unemployed-work/

May 5, 2014 ... 00:00 GMT, May 11, 2015 ... Nearly 102 million working-age Americans jobless ... Although the US unemployment rate has declined, more and more Americans are choosing to opt out of the labor market altogether and no ...

US economy | Jobenomics
www.jobenomicsblog.com/tag/us-economy/

Apr 14, 2015 ... As of the end of Q1 2015, out of a total population of 321 million Americans, 109 million private sector workers support 32 million government ...

knukles's picture

This is the Picture of Real Utopia, So Quitcher Bitchin'
The more people who've QUIT LOOKING FOR A JOB means that they're happily living the life of Riley, with governmental food stamps, housing and freebies.
Everybody wants to retire and just think, some 97 million folks have done Just That!
Thanks to the Government!
And the Bigger that Number Not in the Labor Force GETS the BETTER and HAPPIER America
STOP and THINK about What You Rebel Against!
You Rebel Against UTOPIA

jo6pac's picture

Yes as old retired white guy I'm hopims all colors come up against the machine that bring down worker round the world. It will be a gory day for of you rich libs

Arnold's picture

My neo impressionist art career has really taken off.

 

 

To think it all started with an advertisement on a match book cover.

Latina Lover's picture

Money Printing definitely plays a role in the manipulations of unemployment Stats.

As I was trying to say above, if you follow John Williams Shadow Stats,  he asserts that if  the Fed. government used the same methods for calculating unemployment as in the 1970's, todays rate would exceed 15%:

http://www.paulcraigroberts.org/2015/01/11/john-williams-shadowstats-com...

I am not competent enough to judge whether he is correct, but I do know that  a ZIRP is a sure sign of underlying economic weakness,.

 

rejected's picture

He is correct.

EDIT: I remember when the inflation numbers got to 4 and 5 percent. Man, they started freaking out. Today we have higher rates than that usinig the same calculations they used in the 1970,s and nary a peep. In fact they are calling it deflation. Now if one looks up the true definition of inflation,,, then considers QE and all the other sordid printing of money there is no way we can be deflating.

Hohum's picture

Mr. Roberts,

You know as well as I that once total debt doesn't increase faster than output, we're fooked.  The rest of this analysis is trite.

smukster's picture
smukster (not verified) Hohum May 10, 2015 6:55 PM

Exactly. Come on, anyone still believes in efficient markets? It's pure psychology.

oncefired's picture

Always spot on, once the End Times begin and the Revolution ousts all the theives in Washington. We'll get this guy to put everything back together

wisefool's picture

Larry summers was at the salt convention in vegas last week. I could use analytics, logic, empathy and a whole host of other worth while things to make a point, but what was most interesting is that a former treasury secretary put his momma yellen voice on, for no reason. Lord Keynes is regretting the PhDs program he created. No joke.

https://www.youtube.com/watch?v=BPGmVf2tLd4

 

buzzsaw99's picture

disagree. hookers and blow are keeping the "markets" up.

FallenOne's picture

No shit PCR lies nd manipulation all they got once that stops the truth will be stranger than fiction

divedivedive's picture

Slightly off topic - is mark to market back in place as it was before the 2006-2007 crisis ?

Are the short-selling type brakes back as they were before the crisis ?

 

gwar5's picture

PCR always cuts it right to the bone. Me like. 

Dixie Flatline's picture
Dixie Flatline (not verified) May 10, 2015 7:41 PM

The Future.

  • Temporary help services (16,100 jobs) offered 3.7 times more jobs than law, accounting architecture, and engineering combined (4,500 jobs).
JMT's picture

many of those 'temp help jobs' pay pretty well ($40 an hour and up).. Go on your spouces health insurance or buy a 'bronze' plan under the ACA

JMT's picture

many of those 'temp help jobs' pay pretty well ($40 an hour and up).. Go on your spouces health insurance or buy a 'bronze' plan under the ACA

new game's picture

your kidding right? bronze? flush money down the toilet unless you is one unhealthy m.fooker.

temp workers are not contract workers. temp workers are shit jobs for down and outs...

Fukushima Fricassee's picture
Fukushima Fricassee (not verified) May 10, 2015 7:42 PM

Liars to fools and shit eaters.

TeethVillage88s's picture

I don't read much or pay for financial services.

But seems to me in 1970-80s Manufacturing Jobs were considered special as they had a Multiplier Effect on the Economy.

And you can see this on St. Louis FED Website FRED Charts.

And you can look up the Velocity of Money: M1, M2, MZM.

All of these Show terrible Charts of Decline and even Collapse.

But I never hear Experts or News Sources talk about this... just like the Gini Coefficient or Inequality.

Because Rich People don't care, Lobbyist don't care, Lawyers don't care, and Bankers sure don't care.

Still you would think there are Watchdogs and Public Groups that would raise these issues better. Personally I think Fascist is so imbedded that most people just see Winners and Losers in the Economy. And focus on Family to make them winners. They have little motivation if they understand the Racketeering involved, the Corruption, the Money Trust.

JMT's picture

The 'M1 & M2' numbers or the "Money Supply" metric is Invalid now because IT DOES NOT TAKE INTO ACCOUNT Debit/Credit cards, third party payment systems like paypal or commercial paper.  

TeethVillage88s's picture

Yeah I don't like those either. John Williams uses MZM and then makes his adjustments to open up the numbers better. Unfortunately I don't subscribe to John Williams Shadow Stats and am not 100% sure how he would look at Velocity or even exactly how he adjusts MZM Money Supply.

I think it is revealing that St. Louis FED shows Money Velocity in several forms even if they have changed... and that they chose M1 Multiplier to show. There is utility in these tools even if a quick guideline.

1950-1970 yes... big difference in debt levels and Credit Cards. I'm not clear how big Paypal is % of Credit Type Transactions. Commercial paper is a money-market security issued (sold) by large corporations to obtain funds to meet short-term debt obligations... so I don't know this stuff obviously.

I think you make a valid point about Credit cards, but the Velocity comes down after 1980 in one measure, then comes down in 2000 for another... either way credit cards were already in use by households and businesses.

How can credit cards explain a long term drop in Money velocity and a collapse in 2008? Best Guess is that ATMs might have gotten higher fees or limits starting in the 1990.

I should review the charts.

https://research.stlouisfed.org/fred2/series/MZMV
https://research.stlouisfed.org/fred2/series/M2V
https://research.stlouisfed.org/fred2/series/M1V
https://research.stlouisfed.org/fred2/series/MULT

- Money multiplier
- Fiscal multipliers
- Keynesian and Hansen-Samuelson multipliers

Well we know that Fiscal Spending has been Exponential, therefore, Fiscal Multiplier is collapsing. Monetary Multiplier is a failure. I don't know where else to go. Except that in Business School you are taught in the old days that Manufacturing Expansion provided more Multiplier Effect in the Economy. A dollar in Manufacturing could lead to 3 other dollars in the economy as wheat is turned to flour, flour into bread and other products, and Bread Products into other things. I don't see credit cards directly involved.

Late Edit:

Screw it man. Domestic Investment is Key. US Does Not invest in Infrastructure, has no Principals, has no National Plan to accommodate City Type Planning.

We have more Foreign Investment than Domesticate Investment.

http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm (wow huge trend, $31 Trillion in Foreign Property in USA vs $24 Trillion)

Rest of the world; foreign direct investment in U.S.; asset, Level, 2014:Q4: 3,298,931.7 Millions of Dollars (+ see more), Quarterly, Not Seasonally Adjusted, ROWFDNQ027S, Updated: 2015-03-12
https://research.stlouisfed.org/fred2/series/ROWFDNQ027S

https://research.stlouisfed.org/fred2/series/GPDIA (Gross Private Domestic Investment, $2,851.6 Billions of Dollars)

https://research.stlouisfed.org/fred2/series/GPDICA (Real Gross Private Domestic Investment, $2,704.7 Billions of Chained 2009 Dollars)

Clearly the Goal is to Under Develop the US Industry and Decapitalize the many US Industries in favor of Cheap Labor Overseas (Slave Labor) Free Trade = Undeveloped Industrial Base and Decapitalized Industrial Base.

Nice. I'd feel like shit if I was the Lawyer or Financial Adviser on that.

OldPhart's picture

Good to see someone researching and providing links.

"Clearly the Goal is to Under Develop the US Industry and Decapitalize the many US Industries in favor of Cheap Labor Overseas (Slave Labor) Free Trade = Undeveloped Industrial Base and Decapitalized Industrial Base."

By George, I think you've got it!

CHC's picture
CHC (not verified) May 10, 2015 7:52 PM

Dr. Roberts often uses the phrase "hubris and arrogance" describing the psychos that inhabit Washington and Wall Street.  I love this guy!!

TeethVillage88s's picture

I use the phrase "hubris and arrogance" to describe my father and brother. It seems very 'English' to understate the psychos in this manner.

But I love PCR on USAWatchdog.com

Reaper's picture

"Everything the government says is a lie." Nietzsche.

The financial markets are up because the Fed manipulates the markets. The theory provided for the moronic sheeple is that a rising market proves a good economy. It's like putting a match on the ball of a thermometer and saying the temperature of the air has risen. There are 26 waiter/bartender jobs added for every manufacturing job. http://www.zerohedge.com/news/2015-05-08/april-there-were-26-waiters-and...

Trust in government, the MSM, or government statistics is delusional. We can divide up what we produce, not what we imagine.

JMT's picture

what about IT jobs or jobs in Accounting & Finance???  Many are highly paid and are growing especially here in the northeast..  The labor market for SKILLED workers is as tight or tighter than in the late 1990s.. This site keeps trying to split hairs with negative dis information.  But look around you, parking lots at malls are full as well as restaurants and houses are going up everywhere as well as apartments which rent for $2300 for a 550 square foot studio to over $7,000 a month for a 1500 square foot three bedroom

Refuse-Resist's picture

Maybe where you live. But where I live the only businesses that hvae full staff are:  Government and health care.

Everything else is either a national corporate chain with part time employees, or boarded up.

Here an IT job that requires 2 years experience and MCP pays $9 per hour.

That's less than I made as a rookie/entry level Sysadmi in 2000.

If you don't work for the state or for some health care company, you're pretty much fucked. Those other people make good money and go out to lunch everyday. They are not America. They work for protected monopolies. Profits or cash flow hurting? Don't lay anyone off, just institute more regulations and fines (gunvermin) or raise prices (health care) to support bloated staffing levels and ridiculous salaries (when compared to private industry in similar levels of responsibilty).

So for some folks, it's all good. The majority though? Not so much.

If you live in or near a government or banking center then I'm sure there's plenty of faux, money printing fueled, prosperity. Out here away from the money printing machines, there's a lot of poverty and desperation.

Plenty of people want to work but realize that 29 hours a week at minimum wage won't even pay health insurance, much less a  m ortgage or keep a car on the road with all regulations,fees, and safety requirements.

Just because things appear good in the magical city of Oz, doesn't mean they're good just outside the city limits.

Karaio's picture

We all know that the most important thing in the world is to know the size of the ass Kardalhian.

Here are all scholars and know that by the size of ass calculating the pressure per cubic centimeter in the cock head!

Only this matters!

The rest is every man for himself!

hehe.

Karaio's picture

We all know that the most important thing in the world is to know the size of the ass Kardalhian.

Here are all scholars and know that by the size of ass calculating the pressure per cubic centimeter in the cock head!

Only this matters!

The rest is every man for himself!

hehe.

TeethVillage88s's picture

What about the Total Dent Factor in Underwear when you fart or have 'extreme' gas and farting? I call it the TDF.

OldPhart's picture

A dent in my underwear is the least of my worries.

The iShart

Refuse-Resist's picture

Americans Idle.

FUCK YEAH!

samsara's picture

About time Tylers.  Thanks for posting some From PCR.

 

Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy(Under Reagan)  and associate editor of the Wall Street Journal.

He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments.

TeethVillage88s's picture

Was CFR chartered by the US Congress to create the UN??

- I see some problems if true, since there is a link to the British, The UN was created in WWII and also put USA & UN to blame for creation of Israel, which could have been aok but seems convoluted or contrived if the British had already approved and agreed to get USA into World War with Balfour Agreement. Almost could read that UK attacked USA or used insiders to agree to influence FDR to support UK and join World War II.

samsara's picture

 

There are no jobs in manufacturing.

In the 90's I worked for a Plastic company. I watched as they closed 10 of their American plants and built in China and Hungry. The one of a kind extruders, Huge 100ft long things were taken apart and shipped over and reassembled.  Those MFG machines aren't even in the country any more.

Offshoring middle class jobs raises corporate profits and, thereby, the incomes of corporate owners (shareholders) and executives.

Hmm sounds JUST LIKE TPP.

rejected's picture

"Offshoring middle class jobs raises corporate profits and, thereby, the incomes of corporate owners (shareholders) and executives."

Only because those same middle income victims continued to buy the products. We had a choice in the 1990's when there was still manufacturing in the usa. But it turns out we can be bought. Americans couldn't resist those cheap poorly made Chinese products the traitorous corporations were marketing. Even Americans who were victims of layoffs made a beeline for WalMart. Today, all you can find are foreign made goods.

Now we are an unskilled people trying to force the service industry to foot the bill for our refusal to stand 'united' against the off shoring in the beginning. We have Murikans flipping burgers, mowing yards and manning the malls that sell the foreign products  and somehow they figure they're worth 20 bucks an hour.

We stood by and let them ratify all previous job sucking treaties,,, The TPP won't be any different. Most aren't even aware of the TPP and most will still be texting each other nonsensical messages on their Chinese iThingy when it gets ratified.


TeethVillage88s's picture

Our leaders or Patriots should think and plan about national security... through national assets(like refineries), National Resources like mining, lumber, national forests, farmland with water, commodities, food distribution systems, food and farm and ranch contracts to foreign entities, ability to augment commercial corporations with Ranching, farming, mining, refining, energy, water, and materials for rebuilding cities, highways, railroads, ports & ships, and dams and energy systems and distribution systems.

dogismycopilot's picture

Remember NAFTA in the 1990s? That big sucking sound of jobs, plant, equipment and money out of the US? Nafta was the size of a Dust Buster handheld vacuum.

The Trans Pacific Partnership will be the size of a septic tank pumper.

Get ready for the SUCK in America.

this is going to hurt.

OldPhart's picture

Did the same thing in the 80's with textiles (manufacturing cloth).  Entire towns got laid off.  Wife's home town, Port St Joe, Florida USED to have a papermill (St Joe Paper), a chemical factory (SilvaChem), a fishery (Raffields), and associated service/support job to those factories.

Today, I think Raffields is still in business, but it seems like it was closed after the fire and ammonia spill back in the late 80's.

Today that town is filled with McMansions and I can only assume that most people retired and moved there.  The younger group of her family (nieces/nephews) are basically full time unemployed, into drugs and crime, the one(s) that are working are military/health/government.

I could imagine living there if there was no need to work (retirement), but I don't see how anyone can make a living there without being a vampire to the economy.

Savyindallas's picture

Yeah, but unemployed people getting welfare, into drugs and crime-create a big part of our GDP. Welfare payments are hundreds of billions  -every prisoner generates $50,000 a year into the prison industry - drug profits are in the jillions  -do you realize how many jobs this creates? Since we discovered that money grows on trees -it's all free -like an ATM machine or a credit card  - all of these things are a plus. Throw away all the economic textbooks and conventional wisdom. Money really does grow on trees. I denied this for years, and my stock portfolio suffered. But now I've seen the light. If we just had the sense to write average Americans a check for $50,000 each year (or even more) we'd really be on track for DOW 25000 by the end of 2016 -  with no inflation.  

bunnyswanson's picture

When attempting to save this to FB page, a naked lady with huge breasts is the accompanying photo.  fyi

Lucifer618's picture

So corporations shouldn't be allowed to shop around for employees?  That is what this is getting at.  US labor is way to expensive.  Free trade?  Labor is traded too!  Yeah, I know "free trade" is a package deal but for differnet reason TD.  Your other post implies free trade having somethign to do with keeping high paying jobs at home.  How the fuck is that?  What does free trade have to do with keeping work at home. For what reason?  Rasists more like it.  

Lucifer618's picture

So corporations shouldn't be allowed to shop around for employees?  That is what this is getting at.  US labor is way to expensive.  Free trade?  Labor is traded too!  Yeah, I know "free trade" is a package deal but for differnet reason TD.  Your other post implies free trade having somethign to do with keeping high paying jobs at home.  How the fuck is that?  What does free trade have to do with keeping work at home. For what reason?  Rasists more like it.  

TheGreatRecovery's picture

LAW OF SUPPLY AND DEMAND.  The problem is that there are too many humans on the planet.  That is bound to make humans (labor, wages) cheap.  The only cure is to have fewer babies.  I think a lot of people in a lot of countries are starting to realize that, but the MSM keeps coming up with ways to lie to people, telling them that more babies somehow means more security.  The MSM says this because the MSM is/serves the masters of the largest corporations, who make money by dividends, options, and stock prices, all of which increase when the corporations sell more stuff.  The only way the corporations can sell more stuff is to have more customers, and the only way to have more customers is to propagandize people into having more babies.