Today's jobs report was WAAAYYYY better than expected, no question. However, when you look behind the bullish, 243k gain in payrolls and drop in the unemployment rate to 8.3%, you see a disturbing trend: Average hourly earnings continue to decline. And since national income equals national product, then shrinking the income of the nation (or causing it to grow very slowly) means that you are shrinking the economy by definition. So, yeah, there are more people working, but they're earning less. Not good.
Average Hourly Earnings Y-o-Y % change
16 comments:
Maybe NOT more people working, since workforce participation is at a 30 year low.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Participation%20Rate.jpg
Let's forget about ancient history and focus on a certain country in Europe during the 1930s that was in fact creating a false utopia based on their Ministry of Propaganda. With the NDAA being passed, what exactly are the differences? We are now subjects, as in we will be subjected to whatever the authorities want to do to us because The Bill of Rights has been abolished.
Also, the BDI hit a fresh low of 651 this morning.
The Labor Participation Rate just hit a 30 YR low per the BLS this morning. The chit they are making up is a sign of banana republic time.
Anon,
What do you make of those who say the BDI is misleading because it is reacting to an oversupply of ships rather than weakness in the global economy?
Didn't the sharp drop in the labor participation rate have something to do with a population adjustment? The BLS commented on that.
Are there just more part-timers working?
In other words has the hours worked moved in the same dramatic way?
Mike, I'm not sure on BLS, and I will look at those figures again, but 1.2 million people falling out of the labor force into nothingness to get to an 8.3% unemployment rate is clearly bogus.
Concerning BDI, I know January is a month where we can see big swings as a function of trade after Q4, and there were ships added to the fleet over time, although I believe this excuse is overstated. Clearly we have slowing global trade because of Europe's problems (recession) which effects us and Asia.
I urge everyone to read Karl D. @ Market Ticker concerning the NFP number of this morning. Agree or disagree once you have taken the time to read it. Either a terrible error was made in calculating the NFP number ot it was fraud. Those are the choices.
Average hourly earnings continue to decline.
Which means that the strategy of our neoliberal masters is working perfectly.
Mike, thanks again for letting me post at your site, and I truly mean it. The number of sites that talk about freedom of speech, and the number of sites that actually allow it are mind numbing.
My whole deal is trying to protect the purchasing power for my family. I'm seeing things in this country that I never thought possible. TRULY!
Here's TrimTabs take by way of ZH:
Charles Biderman notes that "Either there is something massively changed in the income tax collection world, or there is something very, very suspicious about today’s BLS hugely positive number," adding, "Actual jobs, not seasonally adjusted, are down 2.9 million over the past two months. It is only after seasonal adjustments – made at the sole discretion of the Bureau of Labor Statistics economists – that 2.9 million fewer jobs gets translated into 446,000 new seasonally adjusted jobs." A 3.3 million "adjustment" solely at the discretion of the BLS? And this from the agency that just admitted it was underestimating the so very critical labor participation rate over the past year? Finally, Biderman wonders whether the BLS is being pressured during an election year to paint an overly optimistic picture by President Obama’s administration in light of these 'real unadjusted job change' facts. Frankly, in light of recent discoveries about the other "impartial" organization, the CBO, we don't think there is any need to wonder at all.
I will also throw in the NRA data for existing home sales that has been completely wrong for years before recently announcing the fact to the public. Anyone using that data for housing decisions was told an untruth for years, and these people made decisions based on this bogus data. I'm seeing a lying trend here guys. Several data points do make a trend after all.
The baby boomers are a huge % of the population, everything, including statistics move with them.
Retirees (anyone 16 or over, not in prison or military do also) count in the participation formula. With the sheer size of the baby boom generation, and with people living longer than ever, won't the participation rate likely be in a negative trend for the next dozen years or so?
And wouldn't a lot of people voluntarily retire according to a calendar (in other words, December to January would see the biggest retirement move each year)?
Is this what is being seen in the participation rate and why the jump down in January?
Crake,
I believe WM has opined that the participation rate exhibits pro-cyclical characteristics...
Matt,
What does that mean exactly?
Crake,
I believe he means that as the economy recovers more people seek employment (participation rate increases). ie With a strong economy, more people "want to get in on it".
In a bad economy, people stop seeking employment, they probably ...
It looks like WM almost looks at the participation rate as a good coincident indicator of economic performance. Something policymakers should look at in order to discern if current policy is stimulative enough.
Resp,
Crake, it's a reasonable thought, but the numbers don't agree. Take a look at this graph that shows 18 to 54 YR olds declining while 55+ is actually growing. Go to a McDonalds and you can see the graph bare fruit.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/Labor%20Force%20Part%20Rate.jpg
" 55+ is actually growing. "
Lack of interest income via ZIRP...
Resp
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