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Something Doesn't Add Up - Strong Jobs, Weak Spending, Sagging Sales
Submitted by Jeffrey Snider via Alhambra Investment Partners,
The problem with the employment report is not just about how it is calculated but more so that it is taken as the definitive measure of economic performance. The notion itself, conceptually at least, isn’t assaultive as the modern economy is entirely about the division of labor and specialization, so anything that deals in that subject matter is already in the right place. This particular brand of economic account, however, isn’t so definitive as to have earned such blind faith, especially during this “cycle.”
As it is, the Establishment Survey and unemployment rate are lagging indications, not forward-looking. The unemployment rate, at its best, may be able to say something about what just happened but is far less intuitive about what will happen. That point really gets lost in the shuffle, especially from the “establishment” that is clinging to anything that might suggest there will never be any economic refutation to monetary “magic.”
March’s bad jobs numbers plus a slew of other bad economic data — which combined for a pathetically slow GDP growth number for the first three months of the year — had some worried that the reasonably strong jobs and overall growth of 2014 had come to a halt. The good news is that March, and the first quarter, may have been a bit of a blip — today’s report also indicated that February’s numbers were even stronger than expected, adding 266,000 jobs.
That’s some sure selective reading about the economy, not the least of which is the internals of the payroll report itself. The economy has “come to a halt” in terms of both big and small; the big being in late 2007 as the level of actual and beneficial employment since then has shrunk in even absolute terms, and in relative terms it is something of a depression. In the “small”, there is the matter of the “dollar.”
Just as the economy, via the Establishment Survey, was taking off, the rest of it did the opposite. That much is clear from the spending figures all over the place, from PCE to retail sales, that show this sinking nature is much more the baseline and anything high and “great” the deviation.
It is not consistent with a booming economy, recovery or anything else that the count of employment should so rapidly increase but nothing else does in association. Not only is household spending declining at the retail level, wholesale sales continue to fall off too. And we have yet to see inventory turn lower with sales, meaning the twin (potential) disaster of overcapacity and overproduction simultaneously.
The latest estimates from the Commerce Department show that wholesale sales for March were down again by 1.3% year-over-year. In seasonally-adjusted terms, sales have declined now for eight consecutive months.
Balanced against those declines is inventory still rising. Y/Y in the unadjusted set, wholesale inventories were up again, this month by 4.9%. That has left inventories split from sales to a degree not seen since the worst days of the Great Recession. You can make the argument that conditions now are far better than those, and that businesses will hold on to high levels of inventory in anticipation of the turnaround everyone has been talking up incessantly, but businesses have been told that story before (notably just last year) to no avail and the particular conventions of business have not been repealed as monetary faithholders would have everyone believe. Inventory is inventory, and it must be dealt with when it gains these kinds of extremes.
While sales have tailed off, there is no sign of that in the inventory part. The common defensive instinct is to write that off as a matter purely of petroleum, but the fact is that non-petroleum inventories have gotten way out of hand in relation to non-petroleum sales; and they have done so in coincidence to all this great job creation.
In seasonally-adjusted terms, wholesale sales ex petroleum are down 3% since so far in 2015, showing no net growth since July of last year. Again, that is the same period as when the Establishment Survey shows the greatest gains since the late 1990’s. The incongruence is astounding, yet for all economic commentary it is the raw job count of the highly adjusted BLS figures that stands in for what might actually be happening; and then worse, those same, dubious “payroll” figures are used for forecasting where the economy is going next.
From that, you can begin to see why the recovery economists are so sure is right around the corner never is. What we can reasonably assume here is that the economy was bumped in a manner not seen since the Great Recession, and that we still don’t know how that will be resolved. The inventory problem is enormous and it at least suggests far more humility about assured rebounds that have never yet arrived and to which are based on arguable figures that at best are backward facing.
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Which one of these things is doing it's own thing, come on, can you tell me which one?
It all adds up......war + banker buddies = huge profits for psychopath members of "the club"
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the US gov'mt has collateralized its citizens to the bankers. "Unemployment vs. Employment " is merely a number that allows the banks to assess a certain amount of collateral per citizen.
When you see that, the Open Borders "logic" becomes apparent. More bodies-more collateral. More EMPLOYED bodies is even better.
The trap for the feds is that if "real" unemploymet numbers pop out, then the banks force the border gates open wider.
It's called record numbers of people NOT working, real wages declining for a decade, and infllation steadily rising. They just do not bother to report any of that
Exactly.
They use fake multipliers.
(Take real number X 1.85) = New Real Number and. . . suddenly a negative number looks positive when adjusted by "govt metrics".
Something doesn't add up ~ strong jobs, weak spending, sagging sales. It adds up perfectly, the only jobs there are is standing in line waiting to be means tested for some welfare handout. NAFTA cost the US over a million jobs, jobs that will never return and the top secret "free trade" deal Obama is doing in secrecy will cost many many more non returning jobs. Wake Up America !!
Of course not, this is the new common core. if it makes no sense the answer MUST be correct
Of course it doesn't add up, it's all a big lie - jiggered and fudged for perception.
Like when your girl comes home with her bra in her purse and her hair all messed up and tells you she was hot and drove home with the sunroof open - in Winter.
Shouldn't federal tax revenue be falling at the same pace as earnings for individuals?
The feds probably have some shell company somewhere funneling counterfeit funds into tax revenue to keep up appearances... lol
-None of the top corporations pay any taxes
-Everyone else is broke
So?
2+ 2 =/= 7
Look at Cap Gains
i thought they had to sell stocks to realize the gain
It's called not revising the "birth/death" model to accept reality that there is not "birth" only "death" since fall of 2007. Take away all the lies and bullshit and we've been in a depression since that time.
I'm depressed
The only way you can have weak spending, weak sales and "strong" jobs, is if Government is doing all the hiring.
That being said , any jobs that govt creates, is funded with counterfeit money from the fed.
So if that holds true, there should be a correlation between govt spending, and the jobs added.
Compare govt payroll against the jobs numbers (overlay the charts) and there should be a correlation.
There is also the possibility that the jobs reports are completely fictitious, which is a very real possibility.
We could be shedding hundreds of thousands of jobs and the report could say the exact opposite.
Read up on what counts as "employment." From the BLSBS website:
"People are considered employed if they did any work at all for pay or profit during the survey reference week. This includes all part-time and temporary work, as well as regular full-time, year-round employment. Individuals also are counted as employed if they have a job at which they did not work during the survey week, whether they were paid or not, because they were:
On vacation
Ill
Experiencing child care problems
On maternity or paternity leave
Taking care of some other family or personal obligation
Involved in a labor dispute
Prevented from working by bad weather"
Additionally,
"Garrett is 16 years old, and he has no job from which he receives any pay or profit. However, Garrett does help with the regular chores around his parents’ farm and spends about 20 hours each week doing so.
Lisa spends most of her time taking care of her home and children, but she helps in her husband's computer software business all day Friday and Saturday.
Both Garrett and Lisa are considered employed. They fall into a group called unpaid family workers, which includes any person who worked without pay for 15 hours or more per week in a business or farm operated by a family member with whom they live."
So, we count anybody who does anything, whether they get paid or not, as "employed." And we don't count people as "unemployed" unless they qualify for "Unemployment Compensation."
I, for instance, have never counted as unemployed since I was about 8 years old (40 years ago). I worked on farms, have quit every job I've ever had, and I've been self-employed for the past 11 years.
You get weak sales because of weak spending, and you get weak spending because people who work as little as one hour per month are considered "Employed." Depending on what one does for that hour, that's unlikely to yield enough money for spending that is anything other than "weak."
Moreover, the earning power of the basic hourly job has plummeted over the past few decades. When I was a kid, a single worker (usually male) with a high-school diploma could get a full-time blue-collar job, and support a family on that income. Not lavishly, but it was certainly possible. A modest house, a car, a vacation every couple of years. The earning power of that job is such now that 2 parents, each working full-time, can't make ends meet on such jobs. Housing is far more expensive proportionally to the income. Cars are too. Education and healthcare. IRA's and 401k's instead of Pensions. The fact that you have to have internet, e-mail and a cell phone to even apply for many jobs, and certainly to get hired. Degree inflation, where basic jobs now require a 4-year college degree.
Families used to derive the median income from a single job. Now a single job pays a median of $32,000, while median household total income is about $48,000. That means two shitty jobs at minimum; often more.
People like to rail on today's "Fat, Lazy, Entitled" mentality, and let's not even discuss what is routinely said about Black people. But you can't chop off the bottom third of the wage ladder without effects showing up.
So, where did all that wealth go, that used to support the lower and lower-middle classes? Not to the 3rd World, where the jobs went. Who used to make 50x to 100x the median worker's pay, but now makes 200x - 300x? Where did all the money in the stock market, M&A market come from? Who ever heard of multi-billion $ stock buyback programs when we were kids?
As I mentioned, I grew up in farm country. We had dogs. They lived outside and ran around all day. In the summers, we had to spend time picking wood ticks off them. If we didn't, the dogs would get lazy and lethargic and lie around. I remember one time picking enough ticks off of two dogs to half-fill a coffee can. A day later, the dogs were running around in top form. It doesn't work any differently with people or economies.
let's see ... economy is doing great while energy price is crashing ... is that the new normal?
Employers are hiring to be ready for the hockey stick recovery when it comes. Shouldn't be long now.
/s
My local Sunoco truck stop is looking for a graveyard clerk, whoopie
Nothing adds up...NOTHING !!.....so why would these add up ????
The correlations between various data points have stoppped working.
This is mostly due to fake money printing to provide band aid solutions to prevent bank collapses or car company collapses or insurance company collapses etc. Had these companies been allowed to collapse, then the correlations, too, would have continued to work.
Second major reason of breakdown of correlation is because growth of large US corporations in overseas countries has not only stopped but started regressing. In addition, China, Russia, India etc are insulated from any collapse of Citibank or Goldman or AIG or GM etc. The implosion of US will only impact Americans and not 95% of the world outside of it.
Thirdly, no major factory whether in steel or cement or a major car plant or a computer or iPhone factory has been created in more than a decade and no new infratsructure like subways or nuclear plants or bridges have been built in over 40 years.
On top of everything, the Chinese or Russians or Indians or even the Middle Eastern hotel companies or airlines have beaten the US companies at their own game. The Chinese own the largest bank, largest oil company etc and are gradually buying the whole world from minerals to real estate etc. While Russians have the largest gas company etc. The Indians have lot of Tech services and some insurance companies in the Top 10 globally. All this is at the cost of US companies. And most of these companies did not exist 20-30 years ago and were very small a decade back.
All the above is due to ageing of US and nothing else.
Now, the US is working on band aid solutions and is unable to move ahead and has even started regressing in the last decade. all the wars are just a symptom of a dying empire reluctant to deal with other nations on an equal basis.
While US may not completely collapse but if the smart people dont start leaving for greener shores like they did from Uganda in the 1960's or from Soveiet Union until the 1990's or East Germany or Poland until the 1990's....there will be no growth and survival will be difficult. History has taught us to move where the money is or at least survival is i.e. closer to a port city for trade but in the 21st century, any movement must be to a location where they have the most money.
The longer the Americans think that they are Numero Uno, the longer will be their period of decline.
It is time to accept reality that all countries are equal and slavery, empire and other such words and egos must be relegated to the dustbin of history.
As far as the correlation of employment with growth or stocks or those risk free asset formulas or alpha and whatever else, I am afraid, they are all DEAD.
All these formulas were very US centric and they do not work outside of US and if the US economy does not function normally, these formulas do not work normally as well.
There are no facts anymore - only - will it sell - Truth is a subjective experience
Bartenders and food servers. The growth in these drives much of the job growth numbers since 2008. In fact, I do actually see this in real life. Of all family and friends I know, their recent college grads have found very few corporate jobs and very many food service jobs. This one friend of my niece who went to college with her was a well practiced food server before college, now, for 3 years since getting ehr degree, she continues to serve food at a Brew Pub. 4 years in college and still at the same job with zero job prospects in corporate sales and branding, what she trained. In fact, this group of girls I've known since they were in grade school, all went to college and studied for jobs in sales, branding, media marketing, Blah! Blah! Blah!. What they did was study advertising, branding, media studies, basic business management. Each girl was planning on being in corporate headquarters jobs managing the marketing and sales teams in the stores, Sadly, only my niece and a friend scored such jobs. Only because my niece's best frined got hired and she recommended my niece for interview. The 1st girl only got hired because her uncle was the head manager of the corporations's property acquisition force. i.e He bought properties where stores would go. The lesson is, "Either have a personal corporate connection, of kiss any chance good by. The corporate policy was no interview for anyone in lower ranks without a recommendation by a management level employee.
Most kids never see a corporate headquarters, but in college, the teachers are always hanging out that prospect for them, like that job actually was waiting for them. Fuck, just look at placement of grads. Maybe 1 in 10 tops ever see the career path of choice.
I heard dog walking still pays $10 per hour.
Socialism kills real industrial jobs .... the service sector .... has to take up the slack .... hooking, etc. .... I paid 12 cans of Miller Milwaukee Premium (Pabst Blue Ribbon) .... from Baja Duty Free in San Ysidro .... cost $4.25 .... for a 1/2 hour massage .... with body wash and buckets of hot water .... from Gilberto .... some of his past clients were Steve McQueen and Charles Bronson .... good company, eh ?
so my daughter is your niece's friend?...small world..
Absolutely.
Nowadays jobs go to people who know someone at a senior level i.e. connections.
Or to people who may add value from Day 1. Which most new graduates cannot do unfortunately.
That is why we are seeing crime rise worldwide. In South Africa they have been burning people alive because poor people believe that the foreigners take their jobs. The Arab Spring began from Tunisia where a young man's livelihood of selling vegetables on the street was taken away and he immolated himself. Most Middle Eastern countries that were attacked are going through this phase and unable to get back onto their feet and want expats out. Malaysia too has banned foreigners in food sector. In India, crimes have risen exponentially due to unemployment. We saw unrest in HK also last year. Young men and women are rising as the pressures due to unemployment keep rising.
Immigration too is shutting down worldwide as barriers continue to rise due to domestic unemployment.
Expect crime to rise worldwide due to no jobs, higher poverty and no jobs for young grads who have nothing to do but participate in crime.
Yesterday, a man tried to rob a bank in Italy and since the bank manager did not open the door of the bank, he burnt the manager alive by pouring petrol over her.
Such is the level of desperation globally that people will do anything just to eat food and provide for their families or themselves.
http://www.ansa.it/english/news/2015/05/08/man-sets-bank-manager-alight-...
Hope the Govts are able to find a solution because in a year or two, things will get really out of control.
I think I would have givin him the banks money
Jack I am a tad older and it has always been about connections and networks. When I was young we were not sold a bill of good about how college would garner you a good job. Now degrees in huge demand could garner you a job but they were not political science or liberal arts degrees. Marketing was a joke and so were many foreign languages. Hell to even get a job in a union shop you have to either have relatives working there or be a good friend of a good standing member.
Today is not alot different except only the creme of the crop in the top 10% of their class will get a good paying job right out of college. The problem is our children and parents are sold a lie that a college degree will earn you more money and two, just graduating with a degree will open doors for you and it has never been true. You are so correct that there are no jobs that allow a person to spend their entire lives working at. Almost nonexistant these days. Unless of course you work for local, state, or federal government jobs. Even then most jobs that pay well you must know someone to even land an interview.
Now if you get a specialized degree instead of the soft sciences, liberal arts degrees, and spanish LOL you can indeed get a decent paying job. The problem is students do not want to bust their asses and achieve a 3.5 or higher gpa. We all just want the degree and think we are good to go.
College is just another way to turn good children into debt slaves if they do not choose wisely and get degrees in high demand professions. Farsi willl land you a 6 figure job currently but no one wants to learn it. There are many hard science degrees that pay well. The problem is most cannot comprehend the math that is required with these degrees because our lower education system is too busy teaching them to feel good about themselves and teachiong English as a second language. This is a dog eat dog world out here once they hit the real world but I do agree these kids got fucked from kindergarten all the way thru college.
wow, I just realized that someone in my family basically only got their super-prestigious job by being close to someone else in my family. It was a game of golf and a phone call. Damn.
thats eye-opening, and something of a reality check. because we always tout this person as so driven and goal-oriented... haha, oh well..
Numbers lie .... socialism is a lie .... a perfect fit !
cunt get some education
assaultive?...have to look that one up
For the first time in a long time, the "dumb money" is moving out of domestic equity funds, net of what is moving to Foreign equites (too late). Right now it's a hint, 2 to 3 more weeks and it's a trend.
The front end of the Retail Investors have been correct everytime since the summer of 2007, with a little regression analysis for months which don't correlate highly. The abundant tailend of the RIs tend to be a confirmation. No matter how late or painful.
We're so accustomed to the bend-but-don't-break S&P, we are in uncharted waters,... if this thing snaps and a big hunk of the "Wealth Effect" vaporizes until some unamed future.
The UK elections were a frightening farce, just imagine how fucked up the US Elections could get, if the true prior loss-in-wealth finally shows itself.
Legalize pot and empty the prisons, because we'll need room for the debtors who thought they were net positive, and not in over their head with their cc, car, and college loans.
The Fed could go back to buying all of the Treasuries and Junk it wants, but because of what we know now, it would just scare everybody all the more.
Use the strong $ to buy stuff you can touch. Except for Real Estate, which is bound for another step down, to almost adjust to historic trends.
This site http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200
says fed tax revenue up 33% since 2009. Who's income is being taxed if joe 6pack is un-under-employed?
My take: They papered up the depression into a recession with lots of hope and change and lipstick, but the real economy never left the depressive mode. Hints are the labor participation rate, permanent deficits, 18+ T official debt and growing, 96 T in unfunded liabilities, and 45 million receiving food stamp - the modern version of bread lines. 07-08 was the hit of the iceberg, for 7 years water filled up the USS titAnic as the holes could not be sealed with paper, and the sinking for good is now a matter of time. Run Forest, run... ...and get a life jacket and a wet suit, things might turn really uncomfortable soon enough.
Open up more dollar stores and BTFD.
Funny we had a FD close down in one town olny to resurface 15 miles up the road. And DG sprout like weeds every few miles
Meanwhile in our part of the world things keep closeing down. Mines shut down weekly, our local chain movie theater is going tits up. Our Kmart is a ghost town dont know how they keep the lights on. Everyone I talk with says the same thing, shit is bad if you don't want to work FF or min wage retail at 29.5 hrs a week you are SOL.
Of course something doesn't add up, it's rotten! Deep trough the core.
And since nobodies going upstream river to take out the crazies, until that day https://youtu.be/-DK0aaLNGak this is to be expected.
It's The American Curse >>> http://wp.me/p4OZ4v-3z