Somewhat Better Growth?

ADP report says US gained 40,000 private jobs in May vs 30,000 loss seen UPDATE
WASHINGTON (Thomson Financial) - The US economy added 40,000 private sector jobs in May, according to payroll services firm ADP, a surprise gain, and well above the expected loss of as many as 30,000 jobs in the month.

ADP said the service sector of the economy added 77,000 jobs, while employment in the goods-producing sector lost 37,000 jobs. That's the eighteenth consecutive monthly decline for goods-producing jobs.

Manufacturing lost 26,000 jobs in the month, the twenty-first consecutive monthly decline.
ADP estimates private-sector employment only, while the Labor Department report for May, due out Friday, will include government jobs as well.

Adding the roughly 15,000 new government jobs created monthly over the last year, today's ADP report would suggest about 55,000 total jobs gained in May.
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=7f6efa67-8a21-459c-989e-3af8a13c7aab

Or so the headlines "say". What a load of malarkey. ADP's track record for predicting jobs gains in the economy of late has been less than accurate. And that's an understatement.

"But the ADP report is not always an accurate predictor of monthly job losses and gains, and recently has been way off the mark. Over the last six months, for example, the ADP report has over-estimated job gains by more than 100,000 per month."

Kudos to the folks at Thomson Financial for calling ADP on to the carpet and questioning the validity of their claims of jobs gains in the US Economy. Perhaps the following revelation about "job cuts" in the month of May will throw a bucket of cold water on their passion for misleading the public.

May Job Cuts in U.S. Up 46% From Year Ago, Challenger Says
June 4 (Bloomberg) -- Job cuts announced by U.S. employers increased in May to the highest level in more than two years, reflecting the crisis in financial markets and reductions by automakers, according to a report by a private placement firm.

Firing announcements rose to 103,522 last month, the most since December 2005, from 71,115 in May 2007, Chicago- based Challenger, Gray & Christmas Inc. said in a statement today.

So far this year, companies have announced 394,193 cuts, up 17 percent from the first five months of 2007.

The number of planned job cuts surged 15 percent last month from 90,015 in April, the report said. The figures aren't adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of monthly figures.
http://www.bloomberg.com/apps/news?pid=20601103&sid=arMLKgbsveOU&refer=us

Granted, 103k "firing announcements" may not total that exact number of "jobs lost" in the month of May, but it hardly bodes well for the unemployment rate going forward. Not to mention the economy. Never lose sight of the fact that American consumer spending accounts for 70% of US GDP. Accelerating job loses will make Bumbling Ben's claim of "somewhat better growth" in the second half of 2008 the "pipe dream" that it is. Keep talking up those interest rates Ben...

Bernanke spoke at Harvard late in the day and said that inflation is significantly higher than the fed wants, but he also said that the fed sees little indication today’s situation is like the “1970s-style wage-price spiral, in which wages and prices chased each other ever upward.” Indeed, for it seems that it is only prices that are rising, and at much higher rates than the statistics the fed supposedly watches to monitor them say they are!
-Chris Mullen, The Gold Seeker Report

Middle class falling behind as wages come up short
...that solid middle-class wage just doesn't go as far as it used to.

After decades of steady growth relative to inflation, the median household income here has flattened out in recent years. In fact, it's down a bit: What $45,309 bought you in 2001, $49,765 doesn't quite buy you now. And that number is from 2006, when gas and food and many other essentials cost less than they do today.

To Lawrence Mishel, president of the Economic Policy Institute, a Washington think tank that advocates for higher middle-class wages, that data speaks to a growing problem: Prices are rising faster than wages, so most working people are not getting ahead.

"This is the economy that people live in, not the one you hear reported from brokerage houses or the cheerleaders in the (White House)," he said. "The fact is, wage growth has been lousy, and people know that."

A recent survey by the Pew Research Center found that 56 percent of Americans say they've either fallen back or made no progress financially in the last five years. The results, Pew said, were "the most downbeat" it's seen in a half-century of polling.

That sentiment may only deepen if the economy stays in the doldrums, said Jack Strauss, an economist at St. Louis University.

Most workers didn't gain much during the growth in recent years, but now they're feeling the pain of the slowdown, and coping with higher prices.

"Unless we get the vast majority of people seeing their wages grow, we're not going to see the kind of growth we want," Mishel said.
http://www.stltoday.com/stltoday/business/stories.nsf/0/B14F782BF987CBB58625745B000FBBD9?OpenDocument

And there's a splash of cold water in Bumbling Ben's face. Wake up! That 70's Show is just a TV program Ben. Today is 2008, this is real Ben. "Somewhat better growth"? Good freakin' luck! Keep talkin' up those interest rates Ben...

I'm sorry, I just had the most amusing thought. We're spending BILLIONS chasing Osama Bin Laden around the desert convinced he's the devil, and wants to destroy America. Folks, Bumbling Ben Bernanke has done more to destroy this country in the past 9 months than Mr Bin Laden could ever hope too. Get a rope...

The Real Misery Index
So imagine my surprise when I learned that 12 of Santa Barbara's parking lots have recently been converted into nightly homeless shelters!


A CNN story highlighted the case of a car dweller who sleeps in one of these parking lots every night. Were drugs a factor in her demise? Nope. How about mental illness? Not at all.

Rather, the 67-year-old woman is jammed into her Honda, along with her two dogs, primarily because of the housing bust and a slumping economy.


The former loan payroll processor was laid off earlier this year. Because her rent ate up 75% of her income, she was forced to move into her car. Even with a new $8-an-hour job and her Social Security checks, she cannot afford a place to live. And she's not alone ...

Here's a quote from the coordinator of this new parking lot program:

"The way the economy is going, it's just amazing the people that are becoming homeless. It's hit the middle class."

Think about that: Twelve parking lots full of middle-class homeless people in one of the nation's most affluent areas.

It's sad.

It speaks volumes about the state of the economy ... the situation many soon-to-be-retirees are finding themselves in ... and just how quickly things can go wrong.
http://www.moneyandmarkets.com/Issues.aspx?Why-Government-Inflation-Rates-Are-Useless-to-Income-Investors-1851

You betcha Ben...good times are just around the corner! SEVENTY PERCENT OF US GDP COMES FROM CONSUMER SPENDING. Ben! $600 of free money just ain't gonna cut it. I can't even pay for beer with that. American buying power is slowly and agonizingly being ground down to the basics: food, shelter, and energy. The three basics you and your kind deem too unimportant to add to your inflation calculations. Smoke up been, maybe this will all go away. And keep talking up those interest rates...

Oh yeah, we're here to talk Gold and Silver. Today's action has to be deemed a success in the face of yesterday's nonsense. Gold is the TRUTH. It is the single harbor of hope remaining to investors. Investor uncertainty is soon to be realized as opportunity as the Fog of Fed Head lies is burned off by those willing to put their faith in that TRUTH.

Gold - Some Bullish Thoughts
by Dr. Martin Murenbeeld

http://www.resourceinvestor.com/pebble.asp?relid=43261

Click on the link and read this presentation delivered by Dr. Martin Murenbeeld at the New York Hard Assets Investment Conference, held 12-13 May 2008. After you finish reading it, go back and read it again and study the charts. Pay particular attention to the chart of Debt vs. the Savings Rate. You'll never doubt your decision to invest in Precious Metals again.

Funds Turning to Gold and Cash for Asset Allocation, S&P Says
June 4 (Bloomberg) -- Fund managers are switching to cash and commodities such as gold for asset allocation after profits fell in the first quarter, Standard & Poor's Fund Services said.
http://www.bloomberg.com/apps/news?pid=20601012&sid=aUCqGr4LyU0g&refer=commodities


Lastly I'd like to bring the following open letter to your attention:

Dear Friend of GATA and Gold:

GATA supporter Bix Weir has written an open letter to the U.S. Treasury Department complaining that the department appears to be violating federal law by limiting production of U.S. silver eagle coins. The law, Weir notes, requires the Treasury Department to produce the coins "in quantities sufficient to meet public demand" even as that demand this year has far outstripped supply. Of course the widespread suspicion is that the Treasury is limiting production of the coins to avoid government purchases of silver that would send the metal's price up in what appears to be a very tight market. Weir's open letter is headlined "U.S. Silver Eagles Illegally Rationed" and you can find it at GoldSeek's companion site, SilverSeek, here:

http://news.silverseek.com/SilverSeek/1212595279.php


U.S. citizens might want to copy Weir's letter and send it to their members of Congress with a covering letter asking Congress to act to ensure that the law's intent is fulfilled.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.