Employment Report And The Market

If you listen to the bleating of the mainstream media and economists there is absolutely nothing to worry about and Friday's employment report proves it.  The official unemployment rate remained steady at 8.3 percent, and 227,000 jobs were added.  Just don't look at the number of long-term unemployed, or those without jobs for more than six months, that stayed the same at 5.4 million.  Don't talk about the number of those working part time but wanting to work full time, at 8.1 million, which remained unchanged as well.  Most importantly don't mention that the number of new entrants into the unemployment ranks rose sharply last month as we discussed in this past weekend's newsletter .  If you are lucky enough to have a job, and particularly an hourly pay job, there was little change in hours worked per week and real disposable incomes continue to lag behind inflation.  With oil and gasoline prices on the rise the noose around the household budget was just drawn a bit tighter.

While the recent employment report will most assuredly give the current Administration plenty to boast about the underlying trends are far more disturbing.   The ongoing structural realities, the fact that many of the jobs that have been destroyed will never return, combined with the demographic shift make the headline number much less important compared with the emerging trends.  Take a look at a recent Gallup Organization poll which polls weekly, rather than one week out of a month with BLS, in ...