-John Derbyshire
The secret is out... My 200k plus prediction of jobs lost was in correct...technically. But the non-farm payrolls report was far worse than the financial news media spun it. Interestingly, this month focus turned to the number of "private sector" jobs created.
The financial media has reluctantly come to the realization that "government jobs" have now been drawn into the cross hairs of the jobs vaporizer. With 33 of 50 US states now facing bankruptcy, and whispers of deficit reduction circulating through the halls of Congress, the once sacred and safe "government job" is now about to become part of the negative statistics file.
With only 83k private sector jobs "created" in June, government officials tried in vain to paint the June jobs report as a success. Unfortunately they ignored the news that the 41k private sector jobs "created in may were revised down to only 33k. Painfully weak jobs "creation" when put in light of the economy's need to create at a minimum 125k jobs each month just to cover new job seekers entering the workforce. With 15 million Americans out of work, and 125k new job applicants joining the fray every month, how is a 83k increase in private sector jobs considered positively by the government. This jobs report sucked...admit it!
The messiah's oft mentioned recovery is a fraud.
Recovery Slows With Weak Job Creation in June
The train that is the nation’s economic recovery has slowed noticeably, unable to generate enough jobs in the last two months to keep pace with population growth, much less reduce the vast numbers of unemployed Americans.
The United States added just 83,000 private sector jobs in June, according to the monthly statistical snapshot released by the Labor Department. The unemployment rate declined to 9.5 percent, from 9.7 percent in May. But that was a largely illusory decline, as 652,000 Americans left the work force.
Over all, the nation lost 125,000 jobs in June, but those losses came as temporary federal Census workers headed for the exits.
“We may have seen the best of employment for some time,” said Paul Kasriel, chief economist at Northern Trust. “In general the economy is downshifting, maybe to stall speed, or just above stall.”
Even longtime optimists pulled in their horns a touch. While they pointedly distanced themselves from those economists who worry about a double-dip recession, or a stagnant and lost decade, enthusiasm was hard to detect.
“Obviously, it was a disappointing report,” said Bernard Baumohl, chief global economist at the Economic Outlook Group. “And it comes on top of a whole lot of other economic indicators that painted a bleak picture for the country.”
Mr. Baumohl predicted, as others did, that this jobs report would add fuel to the fiery debate between deficit hawks and pump-primers in Washington. He favored government intervention, but he tends toward the view that it no longer makes as much difference.
“Government spending prevented the U.S. economy from tipping into a depression,” he said. “But beyond that, the government cannot, short of war, get private companies to increase hiring if they don’t want to.”
The weeks leading up to Friday’s report offered a grim rat-a-tat-tat of statistics pointing to a slowing economy. Auto sales fell, housing sales plunged and unemployment claims rose to a peak higher than is normal for an economic recovery.
And Friday’s labor data offered many more signs of slippage. The labor-force participation rate — that is, the number of workers counted as participating in the national economy — fell by 0.3 percentage point. And the picture remained unyieldingly grim for the long-term unemployed. The median duration of unemployment rose to 25.5 weeks in June, from 23.2 in May.
More and more Americans are being left behind. In June, about 2.6 million people were marginally attached to the labor force, a rise of 415,000 from a year earlier. This means they are not counted in the unemployment numbers, but they have looked during the last year and want a job.
The overall unemployment rate, incorporating all such Americans, stood at 16.5 percent.
“This economic recovery does not have enough momentum to sustain on its own without government help,” said Sung Won Sohn, an economist at California State University, Channel Islands, and a former chief economist at Wells Fargo. “Businesses are reluctant to hire for fear of a double-dip recession. Without jobs, the economy can’t grow, limiting job growth and spending.”
The national economy looks like a slack muscle. Prices and wages are dormant or falling, banks are holding tight to credit, consumers appear fatigued and the stock market is tumbling. And 3.2 million workers are losing their unemployment benefits because Congress turned down President Obama and declined to authorize an extension.
http://www.nytimes.com/2010/07/03/business/economy/03jobs.html?pagewanted=2&adxnnl=1&src=busln&adxnnlx=1278417842-uUrYGQyDodDHLzdJ2ftUCg
Broader Unemployment Rate Drops to 16.5%
The U.S. jobless rate dropped 0.2 percentage point to 9.5% in June, the lowest level since July, but the government’s broader measure of unemployment only ticked down 0.1 point to 16.5%.
The comprehensive gauge of labor underutilization, known as the “U-6″ for its data classification by the Labor Department, accounts for people who have stopped looking for work or who can’t find full-time jobs. This month the gap expanded between the official rate and U-6. Mostly that was due to an increase in the number of discouraged workers, considered marginally attached to the labor force. That figure puts a dark cloud on the drop in the national rate. It indicates that many of the people who dropped out of the labor force in June did so because they gave up looking for jobs.
The 9.5% unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The “actively looking for work” definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. The rate is calculated by dividing that number by the total number of people in the labor force.
The U-6 figure includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find.
Both the headline and U-6 rates are based on the number of people in the labor force. When the unemployed drop out of the labor force completely the jobless rate declines. That problem has been exacerbated in the current recession by the large number of people unemployed for a long period of time. About 6.8 million people have been out of a job for more than 27 weeks. This month, despite a 190,000 increase in the population, the number of people in the labor force dropped by 652,000.
http://blogs.wsj.com/economics/2010/07/02/broader-unemployment-rate-drops-to-165/
Obama on jobs: 'We are headed in the right direction'
"Make no mistake, we are headed in the right direction," Obama said before boarding Air Force One en route to Sen. Robert Byrd's funeral in West Virginia.
"When America truly begins creating lasting private sector jobs that help our economy grow, it will be despite the government, not because of it," said Senate Minority Leader Mitch McConnell, R-Ky.
House Minority Whip Eric Cantor, R-Va., linked jobs problems and Obama's economic policies to the growing federal debt: "As the administration continues to spend, our debt keeps piling up, preventing private sector job growth."
Obama said the economy is continuing to recover from a crippling recession and is also fighting "headwinds from volatile global markets."
The president noted that, throughout this year, the economy has created 600,000 private sector jobs -- "that's a stark turnaround from the first six months of last year, when we lost 3.7 million jobs at the height of the recession."
"We're moving forward," Obama said. "And to every American who is looking for work, I promise you, we are going to keep on doing everything that we can, I will do everything in my power, to help our economy create jobs and opportunity for all people."
http://content.usatoday.com/communities/theoval/post/2010/07/obama-on-jobs-we-are-headed-in-the-right-direction/1
A stark turn around from last year? There are 15 million Americans looking for work, and the Obama claims that the "creation" of 600,000 jobs is a "stark turnaround"? Did this stooge pass 5th grade math?
PS: Shoving Obamacare down our throats and raising taxes is hardly doing "everything in my power, to help our economy create jobs and opportunity for all people". If this is "moving forward", I'd hate to see what moving backwards is like.
"When the CEO of USA Inc. picks a time like this to state that "the economy is strengthening and we are into a recovery," he insults the intelligence of the American people and the entire global community.
Even the dullest nitwit knows this is hogwash. In light of the overwhelming evidence to the contrary, to continually assert that "the economy is strengthening" does irreparable damage to the credibility of our national leadership."
-CIGA Black Swan
White House Economic Advisor Christina Romer Reacts to Jobs Report
SUSIE GHARIB: President Obama says the economy is still headed in the right direction, it's just not creating jobs fast enough. To find out why that is, Washington bureau chief Darren Gersh spoke with Christina Romer. She's chair of the president's Council of Economic Advisers. Darren began by asking Romer why the number of private sector jobs created in June fell below expectations.
CHRISTINA ROMER, CHAIR, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: I think actually the private sector forecasts were a bit all over the place. I think the private sector job growth was just a tiny bit below expectations. What is true is we have been through a period of turbulence. The uproar over Greece and what we've seen going on in Europe. There has certainly been a lot of movement in world financial markets. I think particularly in that context, this report shows a certain stability, a certain sense that we are continuing in much the same trajectory we were on before. We have always said that trajectory needs to be a steeper upward line and that's why the president keeps pushing for the measures that he has had in front of Congress.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Right, but we only got 82,000 jobs created in the private sector last months and many economists out there were hoping by now we would be well over 100,000 and that would be stability at least. It would be enough for the people who are entering the job market. Why aren't we at that level?
ROMER: I think we've known that the economy is facing headwinds. That has always been the problem that we face, that this is not just an ordinary recovery. It is a recovery coming out of a financial crisis. It is a recovery coming out of a bubble and bust in our housing market. So you don't have the normal drivers of recovery, like a big boom in your construction sector because this is an unusual recovery. What is important is other sectors are filling in. We've seen manufacturing coming back stronger than you might have anticipated. We've seen strong export growth. We've seen a lot of growth in investments. We've seen firms are buying equipment and software, which is I think a vote of confidence in the economy. It is another source of demand. It's just different than what we've often seen.
GERSH: Your administration critics are saying look, this shows that the stimulus really hasn't paid off.
ROMER: They are so wrong. Let me give you just another fact. In the first six months of 2009, we lost 3.7 million jobs in the private sector. In the first six months of this year, we added some 600,000 jobs in the private sector. That is an amazing turnaround.
http://www.pbs.org/nbr/site/onair/transcripts/christina_romer_white_house_council_of_economic_advisers_100702/
Stop! Stop! Turn that drivel off already. Amazing turnaround my ass. Did all of these economic geniuses get together in the White House and decide the best way to sell this lousy jobs report was to boast about a 600k gain in jobs over six months? 15 MILLION people are out of work! Somebody please tell the messiah we ain't buyin it. And ask him where those 4 MILLION jobs are he promised us when he stole $800 Billion from the taxpayers pockets...
A Hapless Administration
By Jeffrey Folks
Last week was extraordinary. The President's economic advisor, Christina Romer, declared that Americans should be feeling pretty good about the June jobs report. After all, the unemployment rate dropped from 9.7 to 9.5% because 650,000 people were so discouraged that they gave up looking for work. "We've known for some time," she said, that things would get bad before they got better. Romer's advice to those losing their homes, their cars, their medical insurance, and all else was "Be patient."
Nancy Pelosi, known for her innovative solutions such as passing major pieces of legislation without voting on them, announced that the best way to create jobs was to extend unemployment insurance beyond 99 weeks. The President himself simply reminded the American people that it's all George Bush's fault, and it will take "some time" before things get better. That should boost the public's confidence in the economy.
The fact is that government is failing to produce jobs for the simple reason that government cannot create jobs. Jobs are created by the private sector as it produces goods and services that the public wants and needs. Other than necessary spending for national defense, government should have no role in the economy.
When Obama's stimulus bill was passed in February 2009, the President promised that it would create four million jobs. Not only has the stimulus bill not produced jobs, it and other Obama policies have cost us five million jobs. Government has squandered trillions of dollars that might have been put to work in the private sector, creating jobs. Given free rein, the free market would already have moved the country toward full employment-and it would have cleaned up the Gulf oil spill as well. Government is destroying our economy and despoiling the environment to boot. As Ronald Reagan understood so well, government is not the solution, it is the problem.
http://www.americanthinker.com/2010/07/a_hapless_administration.html
Much of Mr Folks' thinking could apply to any of the last five administrations. Seriously, what of any "value" has the government given the nation by spending, spending, and spending money we don't have?
Spin Is Bad Enough. But When You Believe And Act On Your Own Spin...
By: Brad DeLong
...recent statements from and meetings with administration officials suggest that the White House's broad approach on the economy is to emphasize how much improvement there is, rather than how much needs to be done. That makes political sense.... The economy has largely stabilized, which is a huge achievement, and the only chance Democrats have in the midterms is convincing the country that they're responsible.... But it also makes it difficult for the White House to run around with its hair on fire about how bad things are and how necessary it is that Congress doesn't abandon the labor market in order to pretend to care about the deficit.
http://www.istockanalyst.com/article/viewarticle/articleid/4278958
It's called "credibility"...
The iron triangle of regulation, taxation, and litigation is killing off American business, fast. And let's not overlook "Obamacare".
The National Debt: Apocalypse Now
by John Derbyshire
“Capitalism is dead in the US . . . The US was not destroyed by the Russians, the Chinese or even the militant Islamists. They did it to themselves . . . The $104 trillion debt is beyond any possible means of repayment. The only way out will be to monetize the debt by hyperinflation . . . I’m now watching the final days from 8,000 miles away . . . In November 2008, half of the US electorate put a loaded ballot in their mouth and pulled the trigger . . .”
- a very successful entrepreneur now living abroad
Gold remains pressured as the second half of 2010 begins. What a bargin! July 2010 opens the door on the road to hyperinflation. One year from now, $1200 Gold will be looked at with dismay by those who missed the boat. Silver in the 17s will be hard to believe one year from now.
The Precious Metals buy of the week is palladium. I rarely comment on palladium. It is one of my favorite metals as it is relatively immune to the manipulations of the CRIMEX, and it is expressly tied to the fortunes, and misfortunes, of the US Dollar. Palladium has sat on it's 200 day moving average for four straight days here.
If you are interested in adding palladium to your Precious metals portfolio, please contact my friend and Precious Metals broker Steve Thornbury at MONEX. You can reach him weekdays after 8:30AM est here: 1-800-949-4653, ext 2162. Please tell him I told you to call.
Gold appears to still be victim of the unwind of short Euro contracts, and long Dollar contracts as the worlds financial focus turns to the demise of the states here in the USA. Once this technicallity sorts itself out, the price of Gold should stabilize and turn higher quickly as the US Dollar begins it's decent into the depths of fiat money hell.
Sentiment Indicator Points To A Sharp Rally Coming In Gold
By one historically accurate contrary sentiment metric, the gold market is poised to stage a surprising move higher soon. From the Hulbert Gold Sentiment Newsletter Index:
over the three decades I've been tracking investment newsletters, the gold market has -- on average -- adhered to the contrarian pattern. That is, bullion has turned in far higher returns in the wake of low HGNSI levels than in the days and weeks following high readings.Here's a link the full article: Sentiment Pointing To Higher Gold Prices
If memory serves me correctly, I believe the HGNSI bottomed around the 18 level in October 2008 vs its current 23.5 reading. Both sentiment readings point to extreme pessimism/bearishness, which typically forecasts a big move higher coming.
http://truthingold.blogspot.com/
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