Friday, August 6, 2010

Another disappointing jobs report

"What an ugly report today!" says Tom Keene from Bloomberg Surveillance this morning.

"the headline jobs loss number (-131K) was worse than expected, as was private sector job creation."

The US lost 131,000 jobs in June,
according to the Bureau of Labor Statistics.

The private sector in the US added 71,000 jobs, weaker than a consensus expectation of 90,000, and weaker than the month before.

June's report was also revised to reflect even greater job losses than previously reported. 221,000 jobs were lost, not just 125,000.

BAD NEWS: The civilian employment population is falling again after a brief uptick. 58% of Americans support the entire population.

The high-paying information industry that produces so many jobs in the U.S.A. "continues to melt away."

It's not just those out of work for long durations; more people are recently losing their jobs.

The total number of employees in the US has stagnated during the "recovery", even as the working-age population increases.

Total civilian participation rate in the workforce is still going down.

Jobs in the financial sector continue to disappear.

Canada announced earlier today that it had lost 139,000 full-time jobs.

It was the first time this year that Canada had lost jobs, further proof that Canada's housing/financial bubble is bursting... at a time when America is slipping into the next wave down ("double dip" depression) and China and Australia are both nursing housing-financial bubbles in varying stages of going bust.

Norway has already slipped into economic contraction again. Today's jobs report (and today's revisions to previous jobs reports) suggest that for the US under Obama it's just a matter of time.

The bond market also made it clear that they did not expect economic growth to return. Demand for "risk-free" "safe" investment returns (treasuries) was so strong that the two year treasury fell below .50% for the first time ever. The ten year note sank to 2.84%. The spread between the 10 year and 30 year yields was the widest since 1992.

The currency markets also reflected pessimism. The dollar had slipped to its lowest against the Japanese Yen since the mid 1990s. The dollar index fell. It now takes more than $1.32 to equal a euro.

The weak job reports also raise the probability that the stock markets are inflated and overbought and due for another correction. There is an almost absurd amount of irrational exuberance propping up stock prices, while the bond market more accurately predicts years of anemic growth. Today stock slipped as expectations were punctured by reality.

"There wasn't much to celebrate in the July labor market report," says Michael Feroli, economist at JPMorgan Chase, "private employment increased by only 71,000 and, after downward revisions, is rising on average only 51,000 over the past three months, well below what is needed to absorb the flow of new workers into the labor force."

"Normally that would be expected to lift the unemployment rate, Feroli says, but because so many potential workers have been discouraged and dropped out of the labor force, the measured unemployment rate actually dropped over the last three months and held steady at 9.5%." (

Despite the statistical trick of not counting discouraged workers, it has now been 15 months in a row that the U3 unemployment rate has been reported above 9%, the longest stretch since the early 1980s.

"President" Obama continues to duck his responsibility for creating and prolonging this economic mess. Sarah Palin shares our frustration that Obama continues to lie to the American people without being challenged by the press for his deception and hypocrisy.

2012 can't come fast enough.

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