The Friday 04/16/2012 jobs report is not a report that one
would associate with a strengthening economy. However, it does follow the trend
regarding the official end of recession 06/2009 when total number employed was 140
million, remaining roughly the same number employed today.....three years
later. Yes, 140 million employed 06/2009 and 140 million employed today. Job
creation? Nada! (1) (2) (3)
The jobs report showed 164,000 more leaving the work force.
Yes, 164,000 more discouraged workers added to the army of 4.5 – 5 million
already discouraged workers [left the work force]. Further, as has been pointed
out many times, if a robust economy was perceived, the denominator of the
formula regarding unemployment would be flooded by discouraged workers
returning to the work force if they sensed a growing economy producing job
opportunities. Hence an increasing unemployment rate would occur before a
declining unemployment rate. Add in the "churn rate", those workers
trading up to a better job at an all-time low, you end with a rather disturbing
picture.
At the current trend of discourage workers leaving the work
force, the unemployment rate is going to drop to 0.00% with 600 standing divisions
of discouraged workers.
A disturbing picture? Oh it gets much better. Forward
earnings, a forward looking predictor of economic activity, has been turning
downward for months. If one removes Apple from the forward earnings picture the
scene becomes onerous. (4)
Notes:
(1)
Jobs Indigestion, Earnings in Coming Week, The
Street, 04/07/2012. http://www.thestreet.com/story/11486447/1/jobs-indigestion-earnings-in-coming-week.html?puc=_btb_html_pla5&cm_ven=EMAIL_btb_html
(2)
March jobs report: Hiring slows, Unemployment
falls, CNN Money, 04/06/2012.
(3)
Debacle,
Norquist and Lott, page 24.
(4)
S&P500 Q4 Profit Margins Decline By 27 bps,
52 bps Excluding Apple, Zero Hedge, 02/18/2012. http://www.zerohedge.com/news/sp500-q4-profit-margins-decline-27-bps-52-bps-excluding-apple
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