The propaganda laced with bold lies is enveloping the media. The JOLTS report (Job Openings and Labor Turnover) released today alleges that the number of job openings in April hit a record. Of course, the April number was based on large revisions to previous data. The number reported is also “seasonally adjusted” and predicated on statistical inferences. In fact, 6.7 million allegedly vacant jobs is not only an all-time high but it also exceeds the number of “unemployed” in the Government’s monthly employment “report.”
How do we know both the reported job vacancies and unemployed are an outright fabrication? Because wages would be soaring. It’s simple supply/demand economics. According to the Government, the demand for employees far exceeds the supply of workers. But if this were case, the price of workers would be rising quickly. It’s not.
Last Friday the Government reported Friday morning that the economy added 223,000 jobs, exceeding the Wall St. estimate of 190k. I go from general indifference to outright disgust with the payroll report. But Friday’s report was jaw-dropping horrification. Early Monday before the report hit the tape, Trump – who was briefed on the numbers Thursday evening – tweeted that he was “looking forward to seeing the employment numbers at 8:30 a.m.” I assumed the day before that the report would be rigged, but that confirmed it.
Here’s the problem with the 3.8% narrative: a “tight” labor market at theoretic “full employment is not confirmed by the “price of labor” – i.e. wages.
A 4% unemployment rate is considered “full employment.” The alleged unemployment rate has been running at 4% or lower for several months. But this story-line is not confirmed by wage growth. If the economy were at full employment accompanied by a “tight labor market,” wages should be soaring. Not only is wage growth dropping toward zero, it’s lower than the average wage growth shown in the chart going back to 1998.
The numbers and narrative as presented by the Government are simply not credible. The BLS statisticians removed another 170k from the labor force. The number of working age people not counted as part of the labor rose to 95.92 million – an all-time high. The labor force participation rate is 62.7%. Outside of Sept 2015-November 2015, this is the lowest level for the labor force participation rate since February 1978. Back then most families had one wage-earner per household.
Additionally, there are 102 total working age people who are either unemployed (6.1 million) or “not in labor force” (95.9 million). That’s 31.3% of the total U.S. population (Census Bureau: 2017 U.S. population 325.7 million). Of the 155 million people reported to be employed, 27 million are part-time. This means 39.2% of the total U.S. population works full-time, assuming that number is remotely accurate. Good luck to the Government keeping the Social Security Trust funded…
As for the most glaringly fraudulent aspect of the report, the BLS reports that “retail trade” was the 2nd largest producer of jobs in May. How is that heavenly possible? Retail sales are sagging and serial bankruptcies in brick/mortar retailing are dumping retail labor onto the market. There are other glaring inconsistencies with economic reality on Main Street. One number, however, that might be realistic: Health care/social assistance is credited with providing 31.7k new jobs. That is possible because the category is primarily Government jobs.
One last point. The birth/death model – which is reported before seasonal adjustments – is credited with throwing in 215,000 jobs into the total pool, which is then statistically “adjusted.” The BLS statistical sausage grinder spit out 223k jobs, of which the Birth/Death model contributed the majority on a non-adjusted basis. It’s just not a credible statistic. As we know, the Govt uses the birth/death “model” as a “plug” to create jobs that exist only on paper.
The chart above is the employment-population ratio. It shows the number of people “employed” as a ratio of the total working-age population. Prior to the 2008 financial crisis, the current employment-population ratio is the lowest going back to 1985. The ratio appears currently to be peaking. As it turns out, the four previous peaks in this ratio were followed by an economic/financial crisis and a severe stock market sell-off. My guess is that you will not see this graphic presented on CNBC, Fox Business, Bloomberg or any of the other mainstream financial media outlets.
What really sucks is that those who can still critically think know
that anything the government spits out regarding the economy is
bullshit. The problem is a large portion of the U.S. population has
poor critical thinking skills. Exception would be readers and
participants on this blog.
The Government COUNTS on 95% of the public just looking at the headlines. The Govt
uses the headlines to try and shape perception. The hedge fund bots only look at the
headlines. The GOvt will have huge problem when the majority realizes based on their
own experience that the headlines are lies.
That said, upon observing and chatting with the 21-yr old son of a friend of mine, I
now fully see that Aldous Huxley’s vision for the future was frighteningly accurate…
My Italian barber (a very informed and smart guy) and I were discussing this very topic, yesterday, while getting my haircut. His estimate is 99% – although he had a more disdainful description of the general public’s comprehensive abilities.
The market is definitely increasingly tighter for college educated people with “real” degrees. We’ve repeatedly had to hike vacation and salary to get qualified takers, including fresh BS graduates, over the last three years. I don’t know how that narrow take figures in the big picture of national employment. I think there’s an ongoing bifurcation problem over the last 30 years where we haven’t figured out what to do with the bottom half of the bell curve since a strong back on its own became kind of worthless.
Sounds like you need to hike wages even more then to induce “takers” to spend the money to train for your particular niche. But you do that and, guess what? Your operating margin goes south quickly and your stock price tanks. So it’s just easier to contribute to the collective fake prose and whine about a tight labor market. HOW THE FUCK can the job market be “tight” when 33% of the working age population is not counted as part of the labor force? MOREOVER, just 39% of the population works full-time. The tight labor market is bullshit propaganda. Nothing more. Want to find workers? Raise the price you are willing to pay to induce job takers to want to do the job you are offering. And get rid of 90% of Social Security Disability and slash welfare down considerably.
You know WHY they don’t do that? Because all of a sudden the unemployment rate would be 25%
and the “bifurcation” problem is that greedy corporate C-suites refuse to raise salaries because it hammers their stock price. Plus they would have raise prices and that would lower demand. Easier just to skate by on thin ice and let accounting games drive earnings and the stock price. This is going to collapse anyway so what difference does it make. Keep buying back shares and dumping compensation stock into the buyback program and get rich. THAT’S how this system operates now.
“The market is definitely increasingly tighter for college educated people with “real” degrees. We’ve repeatedly had to hike vacation and salary to get qualified takers, including fresh BS graduates, over the last three years.”
What kind of batchelor’s degrees are you referring to; in what field[s]? Becasue that is not the case for the vast majority of people coming out of college with BS, BA, or “Bullshit” degrees. I’m in the Atlanta area; someone coming out of Ga. Tech with a BS in engineering, or something like that…yeah they get a lot of job offers. But coming out of a lesser known school in the university system of Ga. with most degrees [mostly BA]…you aren’t getting good job offers.
How do we account for laziness and incompetence? We are a manufacturer and we sell to equipment, durable and consumable goods manufacturers. We, nor our customers, can find skilled talent. Even the temp workers at very modern, clean, safe, air conditioned (big deal down south) plants cant show up on time and the turnover is horrendous.