As we expected, based on the reports out earlier this week from ADP and Challenger, the jobs picture does not paint a country on the verge of financial collapse. Quite the contrary, this morning’s report from the Labor Department is positively ducky…
The unemployment rate declined from 7.0 percent to 6.7 percent in December, while total nonfarm payroll employment edged up (+74,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade and wholesale trade but was down in information.
The number of unemployed persons declined by 490,000 to 10.4 million in December, and the unemployment rate declined by 0.3 percentage point to 6.7 percent. Over the year, the number of unemployed persons and the unemployment rate were down by 1.9 million and 1.2 percentage points, respectively. (See table A-1.)
Among the major worker groups, the unemployment rates for adult men (6.3 percent) and whites (5.9 percent) declined in December. The rates for adult women (6.0 percent), teenagers (20.2 percent), blacks (11.9 percent), and Hispanics (8.3 percent) showed little change. The jobless rate for Asians was 4.1 percent (not seasonally adjusted), down by 2.5 percentage points over the year.
Of course, before we get too worked up, there are the usual couple of checks we need to run through.
The first being the CES Birth/Death Model which is adjusted each January, so while the December data out this morning looks good, remember the annual confessional is due in the coming month’s data to be reported in mid-February.
This morning, the CES model estimates actually removed 246,000 jobs, but that was likely because of last month’s (wet dream) 476,000 estimated into being…
There was no improvement in the alternative measures of labor underutilization portion of the report. Stuck at 13.1% in the PhD’s flipping burgers part of the report.
And, of course, no mention of jobs is ever complete without eyeing suspiciously the labor participation rate which has been falling. It was down two-tenths of a percent in this morning’s report from 63% down to 62.8%
How do you spell train wreck? These are 1978 participation rate levels. Is Back to the Future in play? Or, is people coming out of the workforce what depressions really do? I leave discernment to you.
As we’ve pointed out, the collapse of the both-in-couples-working model is upon us (thanks to robotics and all those much-touted “productivity” improvements which are burning up available jobs.
You begin with the population of the USA (north of 317-million at the moment) and of this, you come up with a civilian labor force number.
If you’re ready to believe 347,000 fewer people needed work in December(as the workforce shrank in the report), light one up for me and pass it over.
Now, obviously, if you roll down the workforce, the unemployment number can be moved around pretty much at will because that’s how the math works out.
Still, as anyone can see, TEOTWAWKI (the end of the world as we know it) didn’t show up in the morning’s report so yes, our Trading Model is still long, as it has been for more than a year with a one-week exception. Which is flat-ass amazing to us bears, but what can I say?
All of which will lead to come discussion tomorrow in Peoplenomics about how I am playing this market asymmetrically (along with the pending end of California, but that will wait for tomorrow).
Whether the market will be able to mount a major breakout to the upside is the issue now, and going into the Fed meeting , Janet Yellen is not likely to “mess with success.” I don’t expect the Fed to do much more than talk tough and saber-rattle a bit when all’s said and done for this month’s meeting on the 29th/30th.
As Wikipedia notes:
The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximum employment, stable prices, and moderate long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve’s dual mandate.
As we read in this morning’s report they’re running three-for-three at the moment, although the fly in the ointment is that Fed doesn’t have a sound money mandate which is why, over the 100-years the Fed has been around, the purchasing power of the dollar has been watered down, on average 3.24% per year. And that includes the deflation period of the Great Depression.
That bakes inflation into the cake at some level, but when your country is teetering on the brink of a long wave economic abyss, a little inflation is actually a good thing.
As you may know, from a year ago, the amount of money sloshing around the system (but not landing in either of our pockets, sorry) is up 6.1% while prices are (on average, yada yada) up only about 3% which means we are still in what? Underlying Deflation!.
Without that massive money-printing, Depression II would be obvious instead of just annoying and painful at times. Whether the Fed’s print just faster than deflation ploy can work and be eased out of with any kind of ballerina-type grace remains to be seen. Stay tuned…but for this morning, what’s not to love?
Market reaction: Dow dropped to flat at the open and gold popped up $10.
More after this…
Police State Notes: ASBOS Loses…but….
“OK,” you’re wondering, “What the hell is an asbos and why should I care?”
To begin with, it’s not an abbreviation for (pardon this) ass monkey or some other term like that.
It means Anti-Social Behavior OrderS and it’s the latest scam in kneeler-land to dig in and take root as England grapples with the uber-rich wanting to legislate inconvenient truth from the public view. The softer, kinder, totalitarians. The ones with accents and soap boxes.
So yes, the bill in the UK House of Lords is a menace to self-expression and yes, it ruins freedom of peaceful assembly, and yes, it’s anti-human rights.
For now, the Houser of Lords in the UK has turned down this [horrible, sucky] idea. But, you can bet, like any other power-grabbing police state / garrison mentality, that it will be dressed up a bit and then weaseled through.
The way this will be done, naturally will be to “dress it up in a flag” and toss in a side of “anti-terrorism.” Those are almost automatic pass phrases anymore.
And yes, I’m pleased that this is going on in England and it’s proof (yet again) that rising up against the royals was as good an idea in 1776 as it is today. It’s just that the moneyed types own the press and the politicos.
They’ll make another run at it, you may rest assured.
Then There’s the French
Not sure why he didn’t deny the allegations directly, and is going off on the privacy angle, but anyone who is president of a country, for crying out loud, ought to have the brains God gave chickens at least: When you go to high office, everything is open book. D’oh (or however that’d be spelled in French)
Makes me think I should have skipped business school and gone right to tabloid j-school.
Dreams of White House Pass
As we explained in yesterday’s column, the fortunes of NJ Gov Chris Christie are tanking badly. There’s a federal probe going on and a new lawsuit.
If there is anything good to be noted about this? I doubt that Christie campaign types will be issuing refunds to early contributors who were trying to run him into Washington. And that’s money that likely won’t be spent again…so a good thing? Your call…
But once again, we have the hardcore republicorp leadership getting it all wrong with folks like John Boehner expressing belief that Christie can come back from this.
Unfortunately, he may be right. Voters are idiots, PR men slick, ads are ugly, and all that’s needed in a repentant bully to pull it all together…
But if he can’t run a state fair and square, you think he can run a country? I’m not alone in this view…the Wall St. Journal is through similar thought processes…
WV: Don’t Drink the Water
Something like nine counties in West Virginia are without water this morning because of a chemical spill into a river, which supplies a lot of drinking water, which is now no longer drinkable.
The Feds have been super-quick responding, while people have wiped store shelves clean of bottled liquids.
Damn shame, though. It will likely kill sport river fishing this spring in a large area.
Between the poisoning of ground water in Pennsylvania from fracking and the accidents of coal mining, like this West Virginia mess, we can certainly get the sense that the end of Peak Oil/Peak Prosperity will be bumpy on the backside, as it were…
Media: The CNN Shuffle
According to a report in Variety, “CNN Eyes Primetime Shake-Up” and they go through the list of possible moves.
As a radio news director, my sense is that the problems at CNN are deeper than a people-shuffle. Although bringing in that British host was an abhorrent move given that America is rolling in talent, hints at something else.
Is the problem really in the newsroom? Or, is it a result of views from higher up? That’s the open question. Pro’s can do a great job when given the chance. But can they do a ground-up rebrand? Everything from audio settings to set design to research-based anchor-picking? Whether they have that kind of latitude ought to become apparent soon enough… Because why?
Middle East War Due This Year
As our strategic expert warhammer notes, “Nuclear talks exposed US hatred of Muslims, Iran’s supreme leader says | JPost | Israel News”
Most of Ure readers live in a democratic society. But every human on this planet lives under systems of government which employs propaganda. Propaganda can be spun internally or externally, depending upon the national need.
As an autocratic theocracy, Iran is more the rule than the exception when it comes to deploying overt propaganda, as this piece from the JPost suitably demonstrates:
Iran’s Supreme Leader, Ayatollah Ali Khamenei, let loose with a bit of largely internally directed propaganda prior to talks in Geneva against “the Satan” (aka, the U.S. of A.) and their lap dogs, the E.U.
Khamenei issued two telling and vert interesting statements:
1) “We had announced previously that on certain issues, if we feel it is expedient, we would negotiate with the Satan to deter its evil.”
This comment explains to the Iranian people how their ‘Fearless Leader’ theocrats could negotiate with the unredeemably evil America and its foolish allies in the first place. Then Khamenei added:
2) “The nuclear talks showed the enmity of America against Iran, Iranians, Islam and Muslims.
This one’s targeted both internally and externally as an attempt to keep the anti-American fires of the revolution stoked within Iran while letting America know that Iranian leaders aren’t exactly feeling any love (i.e. “wiggle room”) at the Geneva talks.
Thus an interesting process being played out in Geneva – one no doubt being watched very closely by Israeli PM Benjamin Netanyahu, the Knesset, the Mossad and the Israeli Defense Forces, as well as by the monarchy in Saudi Arabia.
As you’ve noted, the late Rabbi Yitzhak Kaduri’s 2006 prophecy on the Messsiah’s appearance (whom he named “Yehoshua,” or Jesus) requires Ariel Sharon’s death to occur first. Speculation runs rampant that (a) Kaduri was misinterpreted or misunderstood, (b) he was really talking about the “anti-Christ,” or (c) Armageddon is just around the corner.
Interesting times, indeed.
We’re left to wonder if there is room on the planet for a Muslim version of the ADL or AIPAC?