The market is up because of today’s employment report, right? On the surface, it was a good report, right? As always, with the lazy media’s nose so far up the govt’s backside, all you’ll hear discussed is the color of the lipstick and not the pig. When everyone else is walking around like a zombie trying to figure out why the economy and stocks collapsed, simply shoot them this 2nd grade math assessment.
To make my case I’m not going to base it on the misleading way the unemployment rate is calculated and presented. For example, the number you hear reported is the U-3 number of 7.5% (see Table A-15), which ignores the increasing number of people that are excluded from the civilian labor force (the denominator for the percentage). If you increase the denominator at a faster pace than the numerator, you can actually make the unemployment rate decline (even though fewer people are actually employed).
A closer representation of the unemployment rate would be U-6, which is 13.9%. However, this number can also be misleading, because the denominator is reduced by all the folks dropping out of the labor force. John Williams at shadowstats.com, actually calculates the more accurate number, which is around 23%, which is similar to the unemployment situation in Europe’s periphery.
I also don’t need to use the Labor Force Participation Rate, which is back at 1979 levels, even though this is more comparable, since it reflects the percentage of the population that are actually working and paying taxes to pay for our bloated govt.
What I will use is the only math that matters – total hours worked by all employed people. In other words, if you take the number of people actually working (143,724,000) and multiply it by the average number of hours worked (34.4 hours), you get the total hours worked by the working population. Can you imagine a situation where the number of people working went up, but the total number of hours worked decreased due to the fact that the average hours worked declined?
Well, that’s exactly what happened. The reported unemployment rate (U-3) fell from 7.6% to 7.5% (U-6 did increase from 13.8% to 13.9%), and yet because the average workweek fell by 0.2 hours the net effect is a loss of 718,620 jobs, not an increase of 165,000 jobs. Zero Hedge did the same analysis, but multiplied by the average hourly earnings to report that business actually paid $323.2 million less in total wage compensation, even though 165,000 jobs were added. Taxes get paid to the govt, and consumer spending happens based on total wages paid, not the number of people working (even though that number is also at 1979 levels).
The average workweek for all employees on private nonfarm payrolls decreased by 0.2 hour in April to 34.4 hours. Within manufacturing, the workweek decreased by 0.1 hour to 40.7 hours, and overtime declined by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.7 hours. (See tables B-2 and B-7.)
As businesses prepare for the onslaught of Obamacare in 2014, and reduce employee hours below the threshold, this situation is going to get worse. Our government is killing us, not helping us – literally! Suicides have increased 28%, since 1999. This author is bewildered by the rise, “I and most of my colleagues are dumbfounded to explain it,” he said. Really?
There are consequences to money printing and financial repression. Look at the direction of incomes versus the cost of food. To protect their beneficial position, the elite have no intention of changing course, which is why they have to take our guns before the desperation and loss of hope turns outward.
You should know the direction we’re headed. Why do we have to wait until everyones chest is against the wall, with our hands on top of our head, with the govt feeling us up and down looking for loose change? Why not just turn around and grab them by the short hairs and vote the bums out, and keep voting them out? If they won’t implement a term-limits bill, we will! VOTING OUT EVERY INCUMBENT, EVERY ELECTION = TERM LIMITS! Even if they don’t get the message, they will have to live with it.
Get you money out of the system and stop rewarding the money changers. They will be coming for your retirement accounts and pensions anyway. Transfer your money out of the big banks and take away their life blood before they suck this country dry. Act while you still can! Bail-out Is Out, Bail-in Is In.
“Open your eyes. Put your ear to the ground like the Indians use to do. Are they (govt) coming or going? That is a very important question that you have to answer in your mind.” — Martin Armstrong