The BLS (Bureau of Labor Statistics) released its “hey man, lots of jobs open” report last week. The problem is that the credibility of the report is only as good as the credibility of the organization that prepares the report. In this case, the BLS and Census Bureau, both of which are notorious for highly suspect data collection and data “adjustment” techniques (true story: sometimes Census Bureau agents just make it up if they don’t have time to keep canvassing after lunch). Our take is that most of the job listings spit out by the BLS sausage grinder are fictitious.
In addition to this, and interpreted by the media spin-meisters and Government propagandists as evidence that “Trump’s trade war is working” and “the economy is running full bore,” the trade deficit report for April showed a large percentage drop in the trade deficit. Indeed, the trade deficit fell month to month the most since 2008. If you buy into the narrative that the economy is strong, you don’t want the trade deficit to decline in correlation with a similar decline in 2008. In truth, the trade deficit declined because imports fell more than exports rose. Imports are falling because personal consumption spending is now contracting per the latest GDP revision. It used to be, a long time ago, that the trade report was called the “U.S. International Trade in Goods and Services” report. Now it’s simply referenced as “the trade deficit report.”
Final, we believe that the best time to accumulate a winning investment is when no one else wants to hear about it. The U.S. investor sentiment toward the precious metals and mining stock sector is almost as bad as it was in late November 2015, which is when the 5-year bear cycle – which followed an 11-year bull cycle – came to an end. We explain why the next leg in the secular precious metals bull market is about to take off this week episode of, “WTF Just Happened?“:
Visit these links to learn more about the Investment Research Dynamic’s Mining Stock Journal and Short Seller’s Journal. The mining stocks are historically cheap and percolating for a big move higher. I recommended shorting Hovnanian at $2.88 in January – it closed at $1.95 on Friday and has been as low as $1.70.
My colleague Rory Hall and I recorded a very engaging podcast interview with John Crudele, business columnist for the NY Post. He published an article today that exposes deep flaws in Bureau Of Labor Department’s JOLT job openings metric. For those of you that don’t know, the JOLT metric that helps measure job vacancies and works out employee turnover in industries. It attempts to put a positive on quite a bleak situation and there are some real flaws in the metrics they use. While it says there are over 5 million job openings, the actual reality might be a bit different. For example, employee turnover is extremely high and job retention is extremely low. This is why there are lots of job openings which isn’t a good thing! Every time a company loses an employee or lets one go, they have to spend up to a month on recruitment efforts, a week or so training the new employee, and then it can take a few months before they’re getting the same numbers as the other employees. This is why it’s better for businesses to have good employee retention techniques in place to keep their more important team members. The JOLT metric may seem good but, overall, it could be bad for the economy.
Are there really millions of job openings in the US economy today? I’ll get to the point: probably not nearly as many as the government contends.
Tuesday morning the Labor Department is putting out its JOLTS report, which stands for Job Openings and Labor Turnover Survey.
This survey doesn’t have as big a following as the monthly employment report that came out Friday, but JOLTS gives Wall Street hotshots something to trade off and gives TV commentators something to comment on.
Plus it has a catchy acronym. And Wall Street traders are suckers for catchy acronyms. Obviously I don’t know ahead of time what the new JOLTS will be. But back on April 7, the Labor Department reported that there were 5.1 million job openings on the last business day of February. That was the last thing JOLTS reported. Impressive? “Millions” always gets people’s attention. Tuesday’s JOLTS report will give a tally of unfilled jobs for March.
We’ll be posting the podcast to our Shadow of Truth Youtube channel later this week. Crudele is the only mainstream media news reporter of which I’m aware that is willing to look for and publish the truth.