Following the January jobs report, Goldman's chief economist Jan Hatzius appeared on CNBC but instead of joining Steve Liesman in singing the praises of the "strong" the report (which apparently missed the memo about the crude collapse), he decided to do something totally different and instead emphasize the two series that none other than Zero Hedge has been emphasizing for years as the clearest indication of what is really happening with the US labor market: namely the recession-level civilian employment to population ratio and the paltry annual increase in average hourly earnings.
This is what Hatzius said (2:40 into the clip):
"The employment to population ratio is still 4% below where it was in 2006. You can explain 2% of that with the aging of the population that still leaves quite a lot of room potentially, and the wage numbers are telling us we are just not that close, although we are getting closer."
Closer to what? Why the most dreaded event for any FDIC-backed hedge fund in the world: the Fed not only ending some $3 trillion of liquidity injections but actively starting to remove liquidity by tightening monetary conditions and rising rates.
Hatzius' punchline: "I think the case for "patience" is still quite strong." In other words, the US may be creating almost 300K jobs per month, but stocks are still not high enough.
So how should one look at today's BLS report: well, for political purposes the data is great - just look at those whopping revisions; but when it comes to the markets, please focus on the the unadjusted, ugly details beneath the headlines. Those which we have been showing for months and months. Because there always has to be something that prevent the Fed from hiking, and killing Chuck Prince's proverbial music, in the process ending Wall Street's 6-year-old "dance" ever since the 666 S&P lows.
At this rate soon Goldman Sachs will become a bigger "skeptical realist" than Zero Hedge.
Finally, which chart is Hatzius talking about? The one below, showing the uncanny correlation between the US civilian employment to population ratio and the annual rate of increases in hourly earnings, and the fact that neither is capable of actually increasing under the "NIRP Normal" recovery.