Tag Archives: employment

Something Wicked This Way Comes, by Jim Quinn

Posted on December 21, 2016 | Leave a comment

Jim Quinn takes a hard look at the economy and markets, and dismisses President Obama’s claims that he’s leaving it in good shape. From Quinn at theburningplatform.com:

I stopped trying to predict markets back in 2008 when the Federal Reserve, Treasury Department, Wall Street bankers, and their propaganda peddling media mouthpieces colluded to rig the markets to benefit the elite establishment players while screwing average Americans. I haven’t owned any stocks to speak of since 2006. I missed the the final blow-off, the 50% crash, and the subsequent engineered new bubble. But that doesn’t stop me from assessing our true economic situation, market valuations, and historical comparisons in order to prove the irrationality and idiocy of the current narrative.

The proof of this market being rigged and not based upon valuations, corporate earnings, discounted cash flows, or anything related to free market capitalism, was the reaction to Trump’s upset victory. The narrative was status quo Hillary was good for markets and Trump’s anti-establishment rhetoric would unnerve the markets. When the Dow futures plummeted by 800 points on election night, left wingers like Krugman cackled and predicted imminent collapse. The collapse lasted about 30 minutes, as the Dow recovered all 800 points and has subsequently advanced another 1,500 points since election day. Krugman’s predictive abilities proven stellar once again.

It’s almost as if the Deep State oligarchs and their Wall Street co-conspirators are declaring to the world they are still running this show. Despite deteriorating economic conditions, skyrocketing debt, stagnant wages, and bubbles in the stock, bond, and real estate markets, the narrative being spun is a glorious future of tax cuts, less regulations, jobs coming back to America, and GDP growth so high, it will easily pay for all the tax cuts and spending increases. You would think those high frequency trading machines, programmed by Ivy League MBA geniuses, would be smart enough to determine when markets are extremely overvalued as fundamentals are deteriorating.

To continue reading: Something Wicked This Way Comes

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A Tale of Two Job Markets, by the Economic Cycle Research Institute

Posted on December 1, 2016 | Leave a comment

One of the unappreciated factors behind Donald Trump’s victory was the uneven job gains during the anemic recovery from the financial crises. White people lost jobs disproportionately, and Asians, blacks, and Hispanics did relatively better. From the ECRI at businesscycle.com:

With the economic expansion in its eighth year, over 15 million jobs added since the post-recession low in employment, and a steady decline in the jobless rate from its recessionary high of 10% to under 5%, many mainstream economists were convinced that the U.S. economy was in good shape. That misconception, at least where jobs are concerned, is a key reason so many were stunned by this month’s election verdict.

Looking beneath the headlines, it is important to appreciate how unevenly distributed the job gains have been during the current business cycle. We pointed out nearly five years ago that, over the first two years of the jobs recovery, Whites accounted for less than 59% of the job gains, even though they made up over 81% of the labor force. Meanwhile, Blacks and Hispanics, who made up “about a quarter of the labor force, accounted for around five out of every eight jobs added” (USCO, February 2012).

Last month, we again emphasized the skewed nature of this jobs recovery, noting that, “for seven long years, the majority of less-educated non-Hispanic White adults has not been employed. No wonder there is such angst in the lead-up to this presidential election” (USCO Essentials, October 2016).

A striking picture of this lopsided reality is evident from the shares of the total job gains since the November 2007 pre-recession peak in employment. As the chart shows, of the five-million-plus net jobs added since that high-water mark nine years ago, some 56% went to Hispanics (rightmost green bar), about quadruple their 14% share of the labor force at the time (rightmost blue bar). Meanwhile, 29% of those job gains went to Asians, i.e., about six times their 5% share of the labor force (second set of bars from left). Moreover, 25% of those job gains went to Blacks, i.e., more than double their 11% share of the labor force (third set of bars from left).

To continue reading: A Tale of Two Job Markets

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Retail Sector Adds 253,000 Jobs in 10 Months but Aggregate Hours Worked Unchanged: Why? by Mike “Mish” Sheldon

Posted on June 21, 2016 | Leave a comment

Employers are slicing job hours and creating more jobs, because: (a) they’re big hearted (b) they’re mean (c) they like the administrative hassles that come with hiring more people (d) Obamacare. The answer is d, and SLL is sure none of its astute readers got it wrong. From Mike “Mish” Shedlock at mishtalk.com:

How is it that employment in the retail sector increased by 253,000 jobs since last August, yet total aggregate hours worked has not budged an inch?

Let’s take a look.

Please consider the Investor’s Business Daily article Why You Should Discount Obama’s Retail Hiring Boom

Economists have been puzzled all year over how retail employment has surged despite the fact that Wal-Mart (WMT), Macy’s (M), Kohl’s (KSS) and other major players were closing stores and laying off thousands of workers.

The retail hiring boom has been happening even as customers have accelerated their shift to nonstore retailers like Amazon (AMZN). Meanwhile, Home Depot (HD), the leader in a category that has done relatively well in fending off online competition, stopped opening new stores in the U.S. more than a year ago

Nevertheless, retailers have added 323,300 workers over the past year — a spurt of growth that’s nearly the best since 2000.

Getting to the bottom of this mystery is important because the explanation suggests that the job market hasn’t been quite as strong as it appears, yet there may be less slack in the labor market due to Obama administration policies than dovish Federal Reserve policymakers suspect.

Early in June, Jefferies fixed-income economists Ward McCarthy and Thomas Simons noted the “incongruous” retail job gains of more than 50,000 per month during the first quarter, and they predicted some payback with a weak reading in May’s employment report. Yet even though the overall report was lousy, with a net 25,000 private-sector jobs added, retailers accounted for nearly half of those gains.

Given the sector fundamentals, it makes little sense that retailers would need to bolster their ranks in a big way. But upon closer examination, they really haven’t: While they may have more workers, they aren’t doing more work. Since August, the retail sector has added more than a quarter-million jobs, but aggregate hours worked haven’t budged. While seasonally adjusted retail employment has climbed 1.6%, those nearly 16 million workers are clocking 1.6% fewer hours, as the workweek has slumped from 31.5 hours to 31.0.

Supermarkets are a notable example: Over the two past years, employment is up by 70,000, or 2.9%, but the sector’s 2.5 million workers are working, in aggregate, 1.5% fewer hours per week.

Slacking Off

The number of U.S. workers clocking just above 30 hours has fallen to a record low relative to those with work hours just below ObamaCare’s new full-time threshold.

The Obamacare shift from defining full-time employment for health-care benefits from 32 hours to 30 hours is to blame.

As hours worked declines, reported employment rises. I have been harping about this for years.

https://mishtalk.com/2016/06/21/retail-sector-adds-253000-jobs-in-10-months-but-aggregate-hours-worked-is-unchanged-why/

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It’s Time to Blame Obamacare for Losing So Many Full-Time Jobs, by Edward Morrissey

Posted on June 11, 2016 | 1 comment

Obamacare’s remaining proponents, both of them, would prefer that nobody look at the program’s effects on full-time employment. From Edward Morrissey at thefiscaltime.com:

Had a sinking feeling about the economy of late? It may not be your imagination. Economic indicators have flashed yellow for much of 2016, and the latest jobs report shows further depletion of the work force and a dearth of job creation. That trend, says one major bank, may be attributable to President Barack Obama’s signature legislation.

Last Friday, the Bureau of Labor Statistics (BLS) released the worst jobs report in almost six years. The US economy only added 38,000 jobs, less than a tenth of the estimated 458,000 Americans who left the workforce. In fact, thanks to revisions made to the March and April reports, that exceeds the number of jobs created in the past three months (348,000) by more than 100,000. The workforce participation rate dropped back to 62.6 percent, near a 40-year low, and more than three full points below its level at the start of the recovery in June 2009 (65.7 percent).

To call this a wide miss is an understatement. Economists had predicted a moderate jobs gain, with Reuters forecast. The unemployment rate dropped to 4.7 percent, but analysts widely noted that this was a result of the large exodus from the workforce. That included an increase of 130,000 among those who have left the workforce but still desire employment, outnumbering the jobs added in May.

The news on jobs might possibly be worse than even this indicates. An economist at Johns Hopkins called into question the seasonal adjustment calculations used by the BLS. Jonathan Wright recalculated the data and concluded that the economy had lost 4,000 jobs. Instead of a three-month average jobs gain of 116,000 – well below the 131,000-jobs-added level needed to keep up with population growth at a workforce participation rate of 62.6 percent — the three-month average was actually 107,000, and 114,000 for all of 2016.

On top of that, the second estimate of first-quarter GDP growth came in at an annualized rate of 0.8 percent, just short of contraction. The jobs market and the economy have both stalled. We have not experienced annual GDP growth above 2.5 percent in any year since recovery began in June 2009, making this the weakest recovery in the post-war period.

One data point in particular might give at least some indication why. The number of part-time workers in jobs for economic reasons shot up by 468,000, apart from the 458,000 that left the workforce altogether. Slack work or business conditions accounted for 181,000 of these jobs, while another 77,000 could only find part-time work.

Analysts at Goldman Sachs have noticed this trend for some time, and put the blame on Obamacare.

“The evidence suggests that the [Affordable Care Act] has at least modestly elevated involuntary part-time employment,” Goldman Sachs economist Alec Philips wrote in a research note published on Wednesday. Obamacare had the greatest impact on industries that traditionally do not offer strong health insurance coverage, such as retail stores and the hospitality industry. Phillips noted that these have the highest levels of involuntary part-time workers, and believes that the ACA has forced “a few hundred thousand” to take cuts in hours or accept part-time work as a result.

To continue reading: It’s Time to Blame Obamacare for Losing So Many Full-Time Jobs

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The Boomer Retirement Meme is a Big Lie, by Jim Quinn

Posted on April 4, 2016 | 1 comment

From Jim Quinn at theburningplatform.com:

As the labor participation rate and employment to population ratio linger near three decade lows, the mouthpieces for the establishment continue to perpetuate the Big Lie this is solely due to the retirement of Boomers. It’s their storyline and they’ll stick to it, no matter what the facts show to be the truth. Even CNBC lackeys, government apparatchiks, and Ivy League educated Keynesian economists should be able to admit that people between the ages of 25 and 54 should be working, unless they are home raising children.

In the year 2000, at the height of the first Federal Reserve induced bubble, there were 120 million Americans between the ages of 25 and 54, with 78 million of them employed full-time. That equated to a 65% full-time employment rate. By the height of the second Federal Reserve induced bubble, there were 80 million full-time employed 25 to 54 year olds out of 126 million, a 63.5% employment rate. The full-time employment rate bottomed at 57% in 2010, and still lingers below 62% as we are at the height of a third Federal Reserve induced bubble.

Over the last 16 years the percentage of 25 to 54 full-time employed Americans has fallen from 65% to 62%. I guess people are retiring much younger, if you believe the MSM storyline. Over this same time period the total full-time employment to population ratio has fallen from 53% to 48.8%. The overall labor participation rate peaked in 2000 at 67.1% and stayed steady between 66% and 67% for the next eight years. But this disguised the ongoing decline in the participation rate of men.

In 1970, the labor participation rate of all men was 80%, while the participation rate of women was just below 43%. Then Nixon closed the gold window, setting in motion a further debasing of the currency, unleashing politicians to promise voters goodies without consequences, and giving Wall Street bankers and Madison Avenue free rein to use propaganda to bury Americans in debt, while convincing them trinkets and baubles were actually wealth.

The relentless inflation released by Nixon and the Federal Reserve, and perpetuated by Washington D.C. politicians, forced more women into the workforce over the next 30 years, as families could no longer make ends meet with just the husband working. Over the next 30 years the labor participation rate of women soared to 60%, with the expected negative consequences from having tens of millions of children raised by strangers rather than their mothers. The resultant decline in the family unit and kids being brainwashed by government public school indoctrination has left generations of non-critical thinking zombies, easily manipulated by emotional appeals and false storylines.

As women entered the workforce in great numbers, the participation rate of men gradually declined from 80% to 75% by the 2000. It then began a rapid descent and accelerated after the Federal Reserve created 2008 financial disaster. It now stands at 69.3%, just above its record low in 2015. In the 1950’s when 87% of men participated in the labor market, the country’s economy grew strongly, we produced rather than consumed, we saved before we spent, the family unit was strong, and men’s purpose in life was clear.

When over 30% of working age men aren’t participating in the labor force, trouble is brewing. It’s even worse when you consider the 25 to 54 year old male participation rate has declined from 97% in the 1950’s and 1960’s to below 88% today. Much of the anger building in this country is the result of men in their prime earning years seeing their jobs shipped overseas, outsourced, or taken by HB1 workers. The backlash against illegal immigrants is understandable.

To continue reading: The Boomer Retirement Meme is a Big Lie

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The Lego Movie Economy, by Roger Barris

Posted on March 21, 2016 | Leave a comment

This is a pretty good summary of where the economy is right now. Perceptive readers will notice a few divergences from the CNBC story line. From Roger Barris at acting-man.com:

A Lack of “V”

After the February jobs report, President Obama said “America’s pretty darn great right now.” He then went on to disparage the “doomsday rhetoric” of the Republicans, which he said was pure “fantasy.

I think that there is a good chance that this will enter the Hall of Fame of miss-timed statements, right up there with this jewel from Ben Bernanke in March 2007: “At this juncture, however, the impact on the broader economy and financial markets of the problems in the sub-prime market seems likely to be contained.”

If you look hard enough, you’ll find it…

It is about time for an update on the US economy. It will be a bit pointillist, but I will try to give some backing.

My basic view of the US economy is the following: We have never had a proper recovery from the global financial crisis (“GFC”). Although GDP is above its peak prior to the GFC, the rebound has been very muted, particularly given the sharpness of the fall, which has historically produced a “v-shaped” rebound. There has been no “v” in this reco-ery.

The jobs growth, although seemingly impressive in terms of the headline unemployment rate, has remained un-validated in a whole variety of ways. The labor force participation rate, which normally would increase in the face of improved job prospects, has remained very low in a way that cannot be fully explained by demographics.

Wage growth has been anemic, including a negative print in the hourly wages and hours worked in the report just lauded by Obama. Productivity has also been poor, even though this statistic normally responds in a highly pro-cyclical manner: in the 4th quarter of last year, it sank at one of the fastest rates in decades.

To continue reading: The Lego Movie Economy

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