Last week Pres. Trump made a statement about the jobs report and the markets were happy….well at least for awhile….
I have a problem with the jobs reports…not because of Trump I have been bitching about them since Poppy Bush’s days……these reports are not accurate and the unemployment figures are off by a lot……
In an article that I found last week there is some saying that as many as 95 million people are no longer in the labor force and as such are not counted in any of these reports……
In what was otherwise a solid jobs report – one which Donald Trump may or may not have leaked in advance – in which the establishment survey reported that a higher than expected 223K jobs were added at a time when numbers below 200K are expected for an economy that is allegedly without slack, the biggest surprise was not in the Establishment survey, but the household, where the unemployment rate tumbled once more, sliding to a new 18 year low of 3.8%, even as the participation rate declined once again, as a result of a stagnant labor force, which was virtually unchanged (161.527MM in April to 161.539MM in May, even as the total civilian non-inst population rose by 182K to 257.454LMM).
What was perhaps more interesting, however, is that for all the talk that the slack in the labor force is set to decline, precisely the opposite is taking place, because in May, the number of people not in the labor force increased by another 170K, rising to 95.915 million, a new all time high.
Adding to this the 6.1 million currently unemployed Americans, there are 102 million Americans who are either unemployed or out of the labor force (and it is also worth noting that of those employed 26.9 million are part-time workers).
In other words, contrary to prevailing economist groupthink, there is a lot of slack in the economy, and if as the latest Beige Book revealed, employers are now hiring drug addicts and felons to make up for the shortage of qualified candidates, a long time will be pass before wages see significant gains.
The figures that are given to the public are not accurate just like the inflation reports…..that is NOT an accurate count…..why? Food, Gas and Housing are not part of the equation…….how can one get an accurate inflation picture if those sectors are omitted?
The economy may not be as booming as we have thought……just saying a little more accuracy would be helpful….at least to me.
Have a good Friday and I will return for the weekend…..be well, be safe….chuq