NFP Jobs Data Manipulated - All Paid With PPP Loans

The headline non-farm jobs data was so blisteringly good (+2.5 million jobs), market participants were left scratching theirs heads, wondering "V-Shaped Recovery" ??


The big question is, how did all the economic forecasters "forget" about the affect of PPP loans on the jobs data?


Everybody seems to have forgotten about the PPP loans.  20 million private sector "employees" went from unemployed and collecting unemployment benefits, to employed and getting paid with PPP loans/grants,  are so are now being paid by the US Govt via these PPP loans (just started being doled out in May), and being reported as "employed" (whether they are working or not).  Without the PPP loans, those 20 million "employed" would go "poof" and become unemployed.


And, if that wasn't egregious enough, the Labor Department admitted that government household survey-takers mistakenly counted about 4.9 million temporarily laid-off people as employed. The government doesn't correct its survey results for fear of the appearance of political manipulation.  Had the mistake been corrected, the unemployment rate would have risen to 16.1 percent in May, and the corrected April figure would have been more than than 19 percent.


Now, one step deeper into the rabbit  If you use the method of counting unemployed persons from the 1990's (where discouraged workers who would like a job but have not recently searched for one are still counted as "unemployed") then the unemployment rate would be 38% 


The majority of market participants just accept the headline data and don't bother to dive into the details.  It will take 1-2 days (at least) before this type of "nuance" becomes more widely known.


Use this GOLD and short-medium term Treasuries (5yr notes should be the sweet spot).


Full Disclosure:  Long Gold from here at $1675