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Wednesday, March 2, 2011

Un(der) Employment Data

I don't know which is a bigger news event this week-- Ben Wizzie, the Wizard's Fed-speak mumbo jumbo about QE2 MUCH maybe being QE2 little, or the Friday Jobs report.  

I think ADP is about as reliable as Charlie Sheen's publicist at this point-- don't trust anything they say.

I say jobs is a bigger deal than the printing press wizard.

Before the jobs data hits Friday, here are some things to ponder:

The civilian labor force is at a 25 year low.  
People who drop out of the labor force because they give up are not counted in the unemployment rate.

 Persons who have given up due to a crappy jobs market have JUMPED 34% in the last year.  
This is a slippery slope that is not improving.

It's all smoke and mirrors on jobs-- no recovery.  Housing boom jobs will never return and I do not see the catalyst for the next jobs boom.  Maybe GM will hire everyone to make the Make Believe Car of the Future, the Chevy Volt (a $45,000 Cobalt).  Maybe Facebook will add 20% more employees-- that's a cool 200 jobs.  Maybe aliens will arrive from make believe planet Gorp and bring a new Alien industry.

Maybe we will never get back to the job participation rates we saw in the 90's and 2000's-- that is my guess. Baby Boomers will most likely say Phuket Thailand is a better place to retire opposed to working their late 60's as a clerk at the local Kroger.

In my personal opinion, jobs are going to get slashed further in 2011 as companies have to raise prices or lay-off employees-- Thanks to Bernanke et al's QE2 MUCH & QE3, QE4.  I say they fire people as they know that raising prices may fail, and if that happens they have to fire people regardless.  No reason to take a loss in the interim.

Can stocks continue to run if jobs start to fall again?

Not if energy costs keep rising and not if the green back keeps falling.

Jobless Recovery?
It depends on how you look at the numbers. 

Websites used in this data are from the US Bureau and Labor Statistics-- Enjoy:  http://www.bls.gov/cps/cpsaat1.pdf


  1. Stocks can continue to do well long-term even with a perpetually sluggish US economy. All those out-of-work workers are actually beneficial to the bottom line of these corporations -- less spent on salary and benefits, while at the same time, sales outside the US continue to climb.

  2. Disputing the employment numbers is one thing. But I am not sure I agree that corporations benefit from having lots of unemployed people. If they do cut back on jobs they may very well save on costs but their products and services will be directly affected by the large pool of now unemployed.