Monday, April 5, 2010

Keep Spreading that Sunshine Baby

Over the long Easter Weekend we were bombarded by the ever government faithful financial news media with headlines touting a "surge" in jobs growth in the month of March.

March payrolls surge by 162000, US says

March job surge prompts more optimism in outlook

March jobs surge lessens pressure on struggling national economy

US Stock Futures Gain as Employers Add Most Jobs Since 2007

To say there was a "surge" in jobs growth in march would be quite a stretch. Trickle up would have been more accurate, and even that description would be a stretch. Let's take a quick look "inside" those 162,000 "new" jobs:

48,000 "new jobs" were TEMPORARY Census Taker jobs created by the US Government. In effect, these were not jobs at all.

82,000 "new jobs" were the result of the Labor Departments ongoing phantom jobs program know as the Birth/Death model. With this model the Labor Department creates jobs out of thin air. [read more here: ]

After subtracting the temporary government jobs and the fake jobs we are left with a net gain of ONLY 32,000 jobs.

Oh hallelujah! A SURGE in jobs growth! Puh-leeeeze!

Following up on their vigilant reporting of this "surge" in growth of American jobs, the financial news media chose to use this "news" to explain Global Market developments:

Oil rises above $85 as US jobs market improves The Associated Press

Oil price up amid jobs joy in US BBC News

Oil Surges to Highest Level in 17 Months on U.S. Jobs Report San Francisco Chronicle

Asian shares advance on US jobs market recovery The Associated Press

US Jobless Data Gives Asian Shares a Lift New York Times

Asian markets rise amid signs US poised for growth Las Vegas Sun

All of this giddiness on a gain of 32,000 jobs in the US economy? I pity the fools. If you believe the headlines you'd think America was going to lead the Global Economy back to new heights tomorrow. Not a chance.

Of course the Oracle of Orwell had to chime in and take credit for this "surge" in new jobs, and the government sponsored news media wasted little space promoting this illusion:

In NC, Obama Hails Jobs Report New York Times

Obama credits economic policies for March jobs picture Washington Post

Obama Says US Is Beginning to Turn the Corner, Produce Jobs BusinessWeek

All this blah-blah over a pipsqueak gain of 32,000 jobs? A dubious gain at that, as the number comes from a "survey" of ONLY one third of all US employers. Yes, the revered and highly touted monthly non-farm payrolls report is the result of a phone survey. It as guesstimate that is given far too much credibility than it deserves. And here's why:

The improvement is due to fewer reductions in jobs, not gains in new hiring. Small growth in jobs may be a whole lot better than continued steep drop-offs, but the picture is not as Rosy as the headlines would have you believe.

Number Of Long-Term Unemployed Continues To Rise, Sets Another All-Time High
While the increase in jobs over the past month provides hope that the economy's nascent recovery will continue to blossom, one troubling trend in Friday's monthly employment report continues to put a damper on the recovery.

As of last month, more than 6.5 million Americans have been without a job for at least six months, an all-time high, according to Labor Department data. That's more than double the amount this time last year.

Of the more than 15 million unemployed Americans, nearly 44 percent have been without a job for at least six months -- another all-time high.

The negative trend among the long-term unemployed belie the view that Friday's figures were overwhelmingly positive.

Treasury Secretary Timothy Geithner said "the economy is definitely getting stronger" during a Friday interview with Bloomberg Television. Christina Romer, chair of the White House's Council of Economic Advisers, said the employment report is "the most positive jobs report we have had in three years."

But Robert Reich, an economist at the University of California at Berkeley and former Labor Secretary under President Bill Clinton, was much more pessimistic.

Reich wrote on his blog:

"Since the Great Recession began, the economy has lost 8.4 million jobs and failed to create another 2.7 million needed just to keep up with population growth. That means we're more than 11 million in the hole right now. And that hole keeps deepening every month we fail to add at least 150,000 new jobs, again reflecting population growth."

Not a pretty picture, is it? The Oracle of Orwell pretended not to notice and only focused on the "amazing jobs growth" in the march payrolls report. The Oracle does concede that they have a "long ways to go" on improving employment, and continued to blame the Bush Administration for the problem:

'Long way to go' in taming US joblessness: White House
We've got a long way to go. We've inherited a terrible situation, the most pressing economic problems since the Great Depression in our country," Summers told CNN television's "State of the Union" program.

Summers called efforts to bring down the high unemployment, which has been stuck for months at 9.7 percent, the "preoccupation" of President Barack Obama's administration.

"There's a great deal we've got to do, and we've got to do it with all of the energy that we can," Summers said.

"It is the president's preoccupation to put people back to work," he said. "That's what the legislation he signed into law -- to give incentives to businesses to hire people who've been out of work -- was all about.

Summers also cited a raft of legislation in the pipeline, to "channel credit to small business, to protect the jobs of those on the front lines, teachers and policemen, to make investments" -- all with an eye towards job creation.

He told ABC television's "This Week" program, meanwhile, that after months of grinding recession and a stalled unemployment rate, he "expects the trend to be upwards" in the US economy.

But Summers suggested the path toward economy recovery may not be smooth, warning that "the numbers could fluctuate."

Christina Rohmer, chairwoman of the White House Council of Economic Advisers, took a more sanguine view of the economy, hailing what she called "good, solid employment growth."

"I anticipate we'll continue to see positive job growth as we go forward. What I'll be focusing on is, how big does it get," she told NBC television's "Meet the Press" program.

"The fact that the unemployment rate stayed constant this month at some level is pretty amazing," she said.

"There's been a tremendous increase in the labor force," Rohmer added.

"Over the last three months we've added more than a million people to the labor force. That's a great sign. That's a sign that people that might have been discouraged dropped out because of the terrible recession, have started to have hope again, and are looking for work again."

Sounds like the Oracle is hedging it's bets, just in case employment stubbornly refuses to improve. This dear readers is known as "talking out of both sides of your mouth". It is an acquired skill, and is mandatory if one seeks a career in politics. And what is Chritina Rohmer smoking? Apparently it never rains in Rohmerville. Get this girl a breath mint, there is diarrhea spilling out of her mouth. Sign, sign, everywhere a sign...

Hey Christina, maybe you could spread a little sunshine on these poor long-term unemployed souls whose benefits just expired:

The Senate Lets Unemployment Benefits Expire
Today -- April 5 -- is not a good day for people who've been out of work more than six months. That is because the U.S. Senate failed to extend the federal program of Unemployment Insurance benefits before leaving for a two-week Congressional recess, even though the program was scheduled to expire on April 5 -- a week before they return.

So here it is, April 5. In the next week, more than 212,000 jobless people will lose unemployment benefits because the Senate failed to act, according to an analysis by the National Employment Law Project. The Senate leadership, which tried to take up the extension, has said they will make the benefits retroactive when the Senate finally acts. That is undeniably a good thing, but in the week or two people will be without their $300 - $400 weekly benefit checks, it's likely that some will run out of food. Some, once denied benefits, will not understand that they are only temporarily ineligible, and may not come back to seek assistance after Congress acts.

The latest unemployment figures are a painful reminder of why the federal benefits are so badly needed, and why letting the program expire is simply shameful. The federal program picks up where state benefits leave off, covering people who remain out of work after their state benefits run out (usually after 26 weeks). The number of long-term unemployed has been growing month after month, and grew by a stunning 414,000 in March. There are now 6.5 million people jobless for more than six months; their proportion of all the unemployed has now grown to 44.1 percent. The jobs picture showed some signs of improvement in March, but it will be years before we get back to where we were before the recession. If we abandon the jobless now, their loss of income will put the brakes on the economy just when we need to accelerate. And it is a pretty nasty thing to do, besides.

Keep spreading that sunshine Christina... The jobs picture couldn't look any brighter without it.

Gold and Silver broke higher this morning as the equity markets rose in reaction the the "surge" in jobs in March, and the bond markets continued their set up for a collapse. The CRIMEX goons sprang quickly into action as Gold stuck it's nose above the 1130 handle and Silver tested 18. We remain focused on 1134 in Gold and 17.90 in Silver as closes above these numbers will indicate possible breakouts and pending short squeezes in these Precious Metals.


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