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)
(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