I will warn you in advance, I’ve no intention of being professional here when I discuss this jobs report. It is unwarranted. So, I’m going to speak with you as though we’re having a beer on the deck and grilling out. In short, I’m going to be a smart-mouthed jerk, because that’s what the mainstream, the market, the media and federal politicians deserve. I told you yesterday that you could bet the jobs report would suck, and had you bet on it, then you’d be like a big winner and stuff. But media sources like Bloomberg don’t want you to see things clearly. That would be bad, especially before an election and the holiday shopping season, not to mention the fact that the financial media is trying to goad the Fed into raising interest rates. So, this morning, Bloomberg decided to put eight gallons of foundation, six pallets of eyeshadow and three tubes of lipstick on a dead pig and spin the jobs report with an awesome headline and a grand opening paragraph:
“Payrolls in U.S. rise 156,000 as more Americans go back to work
Employers continued to add to payrolls in September as people streamed into the workforce and most found jobs amid record openings, indicating the U.S. labor market is settling into a pace that will support the economy.”
As “people streamed into the workforce”? Gimmie an L! Gimmie an O! Gimmie an L! What’s that spell? LOL! Give me a break too, please and thank you! The population of a small to medium-sized city going back to work in a nation the size of the US is somehow “streaming”? Bloomberg is betting that you cannot understand the Bureau of Labor Statistics jobs report, so Bloomberg will translate it for you – in its own special way, you see, by putting eight gallons of foundation, six pallets of eyeshadow and three tubes of lipstick on a dead pig called the “economy”. Now, before you go and say that I’m being “biased”, or “socialist”, or ask me ridiculous, mind-numbing questions such as “why are you railing against the glorious Obamaconomy, harming Hillary and making things easier for Trump?”, let’s take an actual look at this jobs report, ok?
“The unemployment rate, at 5.0 percent, and the number of unemployed persons, at 7.9 million, changed little in September. Both measures have shown little movement, on net, since August of last year.”
So, the “official” unemployment numbers, which are useless anyway but politicians and Wall Street love them, actually rose one tenth of a percentage point to 5.0 and the number of unemployed jumped to 7.9 million. Furthermore, we also know from the report that things didn’t look good for Hispanics:
“Among the major worker groups, the unemployment rate for Hispanics increased to 6.4 percent in September, while the rates for adult men (4.7 percent), adult women (4.4 percent), teenagers (15.8 percent), Whites (4.4 percent), Blacks (8.3 percent), and Asians (3.9 percent) showed little or no change.”
Thus, we can see that unemployment for Hispanics rose, so that should please Donald Trump. But other than that, there was little or no change for other racial groups. Plus:
“The number of persons unemployed less than 5 weeks increased by 284,000 to 2.6 million in September. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.0 million and accounted for 24.9 percent of the unemployed.”
And so, with no meaningful change since August of 2015, people somehow “streamed into the workforce” “as more Americans” went “back to work”. Huh? If you were wondering why you shouldn’t rely on the “news” for economic information, then the question should be settled at this point. But, let us keep going, shall we?
“The jobless rate rose to 5 percent as the labor participation rate ticked up.”
The use of the phrase “ticked up” is nothing short of spin. Bloomberg wants to paint the employment situation in a better light. The reality is:
“In September, both the labor force participation rate, at 62.9 percent, and the employment-population ratio, at 59.8 percent, changed little.”
If Bloomberg were interested in honesty, it would have written “The jobless rate rose to 5 percent and there was no meaningful change in the labor participation rate.” However, Bloomberg’s wording leaves us with the impression that it’s saying, “Yeah, unemployment jumped a tenth, but ignore all that, because the labor participation rate is going upward – zooooooom and stuff! Happy days are here again; The skies above are clear again; The Fed will soon raise rates again; , Happy days are here again!” Again, if Bloomberg were at all interested in honesty, it would be singing “Cheer up, Smile, Nertz!”, because September’s jobs report sucks.
“The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in September at 5.9 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.”
In other words, millions of people are trapped in low-wage underemployment, though they’d rather have a full-time job with decent pay, and that number, when combined with unemployed persons, and persons marginally attached to the labor force, remains extremely high and unchanged at 9.7%. How high is 9.7%? Oh, three tenths of a percentage point away from depression level unemployment figures; that’s how high it is. But fear not: with the holiday season rapidly approaching, low-wage retailers wishing to earn extraordinary profits on Black Friday and through Christmas sales have a low-wage, part-time seasonal job for anyone willing to take a personality test from “People Answers” and apply:
“Retail trade employment continued to trend up over the month (+22,000). Within the industry, job gains occurred in clothing and clothing accessories stores (+14,000)”
Tis the season to spend dollars! Fa la la la la, la la la la! If you don’t, you’re a selfish asshole. Fa la la la la, la la la la! Got no dollars? That’s no problem! Fa la la, la la la. La! La! La! Swipe the cards with VISA on them. Fa la la la la, la la la la!
And because America is the land of opportunity if you only work hard and play by the rules, jobs are now available for everyone
“in gasoline stations (+8,000).”
too! Ah, prosperity! Brings a tear to my eye. Only in America, I tell you. Folks, it makes you want to sing out: “O! say can you spell, the word poverty?” Nope, you can’t, because the American educational system sucks just as bad as this jobs report. And if left on its ridiculously underfunded, common core path of immense stupid, jobs reports forty years from now are going to hypersuck. But that’s another article entirely. And if you happen to be wondering, “But what about manufacturing jobs?”, wonder no more. Simply walk to your bathroom, lift the lid on the toilet, flush and watch the water go down – that’s manufacturing jobs. So, really, who are these people streaming back to work that will “support the economy” as Bloomberg tells us?
“Professional and business services employment rose by 67,000 in September and has risen by 582,000 over the year. Over the month, job gains occurred in management and technical consulting services (+16,000), and employment continued to trend up in administrative and support services (+35,000).
Health care added 33,000 jobs in September. Ambulatory health care services added 24,000 jobs over the month, and employment rose by 7,000 in hospitals. Over the past 12 months, health care has added 445,000 jobs.
Employment in food services and drinking places continued to trend up in September (+30,000) and has increased by 300,000 over the year.”
Well, isn’t that precious? These folks are really going to jack aggregate demand through the roof when they begin spending. Look out: With the actual unemployment rate remaining stagnant at near depression levels of 9.7%, an overheated economy draweth nigh! Do you know why this jobs report sucks? Because the market doesn’t control the unemployment rate; the US government does.
It must be understood that the federal government causes unemployment to exist. Through its policy measures, it chooses the unemployment rate as well as to allow low-wage underemployment to exist. Now, how does the federal government accomplish this? Firstly, it is the sole issuer of US Dollars that consumers use to purchase goods and services and that the market uses to pay workers. Through federal taxation, it creates a demand for its own currency. It lays the tax payable only in US Dollars, which causes a demand for US Dollars. The market offers goods and services for sale to the federal government to obtain US Dollars in order to pay the tax and the federal government decides the price it will pay in its own US Dollars for those goods and services. The federal government is the supreme authority over the market and the economy. It can, at any time it desires, interfere with or alter the market to attain its economic and social agenda.
If we are willing to accept this reality, then it becomes clear that all of these market-based shenanigans and goings-on are entirely useless games that result in high unemployment, persistent recessions, poverty expansion and vast income inequality. That is why the jobs report sucks in a nutshell. The private sector is not supreme here. Business is not the job creator. Such authority rests solely with the federal government, because it alone is the currency-issuing and regulatory authority. Prosperity is simply not dependent upon business, because the private sector cannot create a situation of full employment. Business is merely a private activity that someone or a group of people choose to start and engage in. It is voluntary, like a hobby, except this particular hobby of supplying goods has the potential for enormous profits. It is not special.
Understanding this reality, we also understand, then, that the federal government has the complete authority to set the floor price of labor to any price level that satisfies its economic and social agenda. If that agenda is one which maintains involuntary unemployment and poverty, then that floor price might be $7 per hour, allowing low-wage producers to thrive. If, on the other hand, that agenda is more sophisticated and seeks indefinite full employment and public purpose, then that floor price might be a living wage and so, low-wage producers who refuse to pay that floor price will be forced to exit the US economy. So, the federal government can easily set the floor price of labor and then buy up all of the labor that the market does not want at that price with its own currency.
Therefore, to end involuntary unemployment and future bad jobs reports, the time has come for the federal government to do its job as a currency-issuer and introduce a federal Job Guarantee offering a job to anyone who is willing and able to work at a decent wage. The price tag? $594 billion per year. When you consider the trillions spent over the last eight years and the result is a 9.7% unemployment rate, $594 billion that actually targets unemployment is nothing in comparison and a step in the right direction.
So, in summary, stagnation remains persistent
Sept. 2015: 10%
May 2016: 9.7%
June 2016: 9.6%
July 2016: 9.7%
Aug. 2016: 9.7%
And today’s unemployment rate:
Sept. 2016: 9.7%
That is a portrait of stagnation and utterly poor performance. The jobs report sucks. No two ways about it. Full stop. End of conversation. Fin. If you want to get right down to the brass tacks, the bottom line is that Bloomberg, CNBC and all of these financial media outlets are spinning a horrible jobs report for one reason alone: to hopefully “encourage” Yellen to increase Wall Street’s basic income guarantee… Oh, I’m sorry – Did I say “basic income guarantee”? Gee, I meant to say that they want to hopefully “encourage” Yellen to raise interest rates.
We need to step away from this market-based nonsense once and for all and get with reality: The federal government creates all unemployment and it is the only entity that can eliminate unemployment, which it achieves through deficit expansion for that purpose.