The Bearish David Rosenberg Reemerges: "What If I Told You Employment Actually Declined 119,000 In June"

Tyler Durden's picture

After several years of trying to put a positive spin on economic data in an attempt to validate the success of Fed policies, which in light of recent events have clearly failed with bond yields today touching new all time lows and market-derived inflation expectations about as low as they have ever been while even CNBC now admits that the only policy target of the Yellen Fed is to keep stocks as high as possible (there it is clearly succeeding for now), it was somewhat surprising to see Rosie "the bull" vaporize, and be replaced by the bearish side of David Rosenberg in such vigorous fashion today after years of hibernation.

The metamorphosis took place in what was a rather scathing take on today's jobs report, about which he said that "it makes little or no sense that the business sector would be so cautious over committing capital to the real economy and at the same time embark on a sustained hiring spree."

We agree. Here are the highlights:

What if I told you that employment actually declined 119,000 in June and has been faltering now for three months in a row?  Yes, that is indeed the case.


Of course, the focus, as always is on the non-farm payroll report but keep in mind that while this is the data series that moves markets, it does not necessarily have the final word on how the labor market is truly faring.


Okay, so let’s get the pablum out of the way first. Nonfarm payrolls surprised yet again but this time to the upside — surging 287,000 in the best showing since last October and again making a mockery of the consensus economics community which penned in a 180,000 bounce.... when taking May and June together, they average out to be less than 150,000 versus the twelve-month average of 200,000 so even as the June data pulled a major upside surprise, the overall view that the pace of job creation is moderating remains fully intact.


It’s not as if the Household sector ratified the seemingly encouraging news contained in the payroll data as this survey showed a tepid 67,000 job gain last month and rather ominously, in fact, has completely stagnated since February.


Historians will tell you that at turning points in the economy, it is the Household survey that tends to get the story right.


* * *


The simple fact of the matter is that May and June were massive statistical anomalies. The broad trends tell the tale. Go back to June 2014 and the six-month trend in payrolls is running at a 2.2% annual rate and the three-month trend at 2.4%. A year ago, as of June 2015, the six-month pace was 1.9% and the three-month at 2.2%. Fast forward to today, and the six-month annualized rate is 1.4% and the three-month has slowed all the way down to a 1.2%. This is otherwise known as looking at the big picture.

But wait, Rosenberg said jobs actually declined? Here is his math:

When the Household survey is put on the same comparable footing as the payroll series (the payroll and population-concept adjusted number), employment fell 119,000 in June — again calling into question the veracity of the actual payroll report — and is down 517,000 through this span. The six-month trend has dipped below the zero-line and this has happened but two other times during this seven-year expansion.

See, it isn't that difficult to have a critical eye on government data and refuse to drink the BLS Kool-Aid now.  His conclusion:

The Fed may well be breathing a sigh of relief, but we are not out of the woods yet. My advice is to simply ignore those pundits who may conclude that a rate hike is back on the table any time soon.

Actually, the market is already doing that for you David: with stocks at all time highs and bond yields at all time lows, the algos are quite confident that the Fed will not hike for a long, long time. As for the underlying economy, alas that has not matter for nearly a decade, something have said constantly and something which even Rosenberg once again admits.

Source: Gluskin Sheff

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Zé Cacetudo's picture

The Attorney General said today, in part: "After the events of this week, Americans across our country are feeling a sense of helplessness, of uncertainty and of fear." [1] She's right. After watching Crooked Hillary narrowly dodge being charged with a crime earlier this week, I certainly feel some helplessness, uncertainty and fear!


Say What Again's picture

"What If I Told You Employment Actually Declined 119,000 In June"

The HFT-Quanto-Matic model says that's good for +199 Dow points.

froze25's picture

Just in case you forgot Hillary got away with a high crime the other day.

CPL's picture

But who can be bothered with high level corruption undermining the very foundation of the political and economic spheres of a society when BLM freedom fighters in Texas are on TV taking away the media thunder.

E.F. Mutton's picture

It's almost as if it were planned that way

Mike in GA's picture

Soros is demanding his money's worth 

knukles's picture

Those senses of "helplessness, of uncertainty and of fear" will not be helped until the inner city which has all but declared war of the rest of America, is disarmed before anybody else.
Has the Government stated that in response to white people being threatened with genocidal mass murder by those inciting riots, violence and lawlessness, that white America has nothing to worry about because these belligerents will be disarmed and whites will be openly protected?
I didn't think so.

Nah.  Equal Protection under the Law is too much to ask for these days

.here's your home grown domestic American terrorists.   .angry blacks.

froze25's picture

Equal protection ended the day that Common Law was replaced by the BS known as Statutory law.

knukles's picture

Time for me to resubscribe?

Nah ....

undertow1141's picture

And DOW up 260 point on absolutely no volume. Yeah ,things are going great.

CPL's picture

Yeah, they really need to hide that fact by buying lots of tiny shithole stocks to generate the illusion of volume.  Here let me check...oh perfect...NASDAQ:BIND.  They make a drug of some kind that does stuff.  Whatever.  It's cheap and has all the metrics any one would need to invent volume on an exchange.  Find a bunch of them and go through a buying cycle.  The short interest will help cap the price after 2 bucks plus make volume appear at no cost, rinse and repeat to make it look like something is happening while we go to DOW 1000000!

Bullish baby!  Bullish!

froze25's picture

Very nice, I hadn't thought of that, thank you.

Hohum's picture

"Missed it by that much" -- Maxwell Smart

N0TaREALmerican's picture
N0TaREALmerican (not verified) Jul 8, 2016 1:52 PM


Kool-aid:  less filling!

Kool-aid:  tastes great!


CPR Steps_30 pumps_2 breaths_then repeat's picture

One time a bear, ALWAYS a bear!

ghengiskhan's picture

Look at the 55+ yr old range.  This tells the whole story.  The data is captured from a ridiculous sample of lag data via a phone call poll.  Nobody under the age of 55 is picking up their cell phone for an unknown number.  It's a completely broken process that tells us nothing other than people over the age of 55 still have landlines that they pick up.

class of 68's picture

The establishment survey calls businesses.  Not individuals. 

Scooby Doo's picture

And a lot of business people do not asnswer calls with non local area codes.  We let those callers leave a message because those are usually spammer calls. It is doubtful that the establishment survey people leave a message and the businessperson wants to spend time responding to the survey rather then trying to make money. 

The Duke of New York A No.1's picture

Hillary! ... Hillary! ... Hillary! ... 4 MORE YEARS!!!!!!!!!!

eeaton's picture

I would like to know how many of these "new jobs" are reclassification of Independent Contractors who are now "put on the books" as employees?

user2011's picture

Unbelievable Scams of America.

xerxiesx's picture

The have your cake and eat it too market - strong payrolls equals strong economy, STOCK SURGE.  But wait, rate hike back on the table then?  But Fed won't hike rates, STOCK SURGE.

exartizo's picture

Dear Mr. Rosenberg,

You are a fucking idiot, and a MSM pawn.


A ZH Reader

trollster's picture
trollster (not verified) Jul 8, 2016 2:13 PM

Must have balls of titanium to be bearish nowadays.

CHoward's picture

Nah - just requires the same type of balls Hillary has.

Jacksons Ghost's picture

So the BLS lied?  Does the Gov't or Politicians tell the truth about anything?  I guess we know that answer.

sanjuandon's picture

When does the crackup start?  how long can the lies hold this market highs until august and then october drop will make 2008-2009 look like a picnic.

N0TaREALmerican's picture
N0TaREALmerican (not verified) sanjuandon Jul 8, 2016 2:47 PM

25 years and counting in Japan.

Midlife Rambler's picture

The Japan story is an interesting one to consider. Do we have the long runway that Japan has had to keep them from complete collapse?

It seems to me that we will not have the same path as Japan. Japan has at least had the strong US demand for it's products for most of that 25 years. Without a strong US market I don't think Japan would have fared as well as they have.

the US does not have that major trading market to sell into - especially as China falls back down to earth. Maybe I am wrong, but I don't think we have the luxury of time they had.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Jul 8, 2016 3:50 PM

The only stats I trust are from Shadowstats. Anything pumped out by the government I consider to be nothing but propaganda.

TradingTroll's picture

Who wrote this?? US markets were surging right up to the canceled June rate hike.


If the algos liked the rate hike possibility then it's possible they are indifferent to no rate hike. Money flows are driving this market and their motivation is Brexit, rapefugees,  China-tension, Russia-US tension etc.

BouncingCat's picture

what would we do without "adjusted" numbers controlled by an administration that wants to really put lipstick on a pig?