The jobs number came out on Friday and the market loved it. The Saturday Edition of the Wall Street Journal proclaimed:
Jobs Data Provide Hope
I have always been a little gun-shy about the word “hope” given its link to our commander-in-chief. I honestly think that the markets are a joke sometimes. The market celebrated that 67,000 private-sector jobs were added last month. Of course, the total number of jobs for the month of August showed a loss of 54,000 jobs. Then there is my favorite number of all – the birth/death ratio.
This is the number of jobs that they “estimate” were created or were lost. I wonder what the jobs number looks like if you take out the 115,000 jobs that were created out of thin air? That is how many jobs they added back into the total. Now it wouldn’t be any fun if we didn’t look at how many jobs the Government estimated were created in the leisure and hospitality sector. After all, Americans have so much money to spend on these types of things. These companies must be hiring like crazy. (Please note the sarcasm.)
This past month 23,000 jobs were added to the leisure and hospitality sector. Thus far this year, the birth/death formula has added 421,000 jobs to the numbers. Of those, 78% were in the leisure and hospitality sector. I seriously cannot make this stuff up.
Are you starting to see what a joke Government accounting is? Let’s switch over to what Barron’s wrote this weekend about the jobs numbers and you will see a much more dire situation. From the article:
• All of the employment gains were part-time—full-time employment, according to the Household Survey, plunged 254,000.
• Those working part-time did so pretty much because they had no choice, and their numbers surged by 331,000—the biggest increase in six months.
• Of the 67,000 rise in private-sector jobs, 10,000 reflected returning construction workers who had been on strike.
• The 27,000 shrinkage in manufacturing slots and flat total goods-producing employment are hardly evidence of a vibrant economy.
I don’t need to tell you that this is a serious problem that isn’t getting the attention of the truth. It is just a bunch of politicians crunching numbers to create the fantasy and illusion that serves them best.
Needless to say, risk is very high in the markets. This is especially the case as we enter into the Bear’s favorite month of September.
Prudent Money Market Outlook 