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Jobs Revision: 818,000 Jobs Just Went “Poof”
For months, I’ve been haranguing Ricochetti about the growing disparity between the jobs numbers reported by the Establishment Survey vs. the Household Survey, pointing to my belief that the headline numbers from the Establishment report were, like the rent, “too damn high.”
Well, well, well. The Bureau of Labor Statistics (BLS) just released a revision to the jobs numbers, and 818,000 of those Establishment report jobs just evaporated. Add those to last year’s downward revision of 307,000 and that means that 1.125 MILLION of those Biden-Harris highly trumpeted jobs were figments of the BLS’s imagination.
If I were the conspiratorial type, I’d be tempted to speculate that they needed amped-up job numbers to boost the Biden campaign. The PR from those numbers is in the mix.
Now, Biden is gone and they have an energized Brutus Harris campaign. So what the donor class really, really needs now is a rate cut to boost the market. But the ‘fantastic’ jobs numbers are making the Fed skittish about cutting rates. Soooooooo…. We have a huge revision and Shazam …. Rate cuts look much more likely.
What’s the real story with jobs?
To gauge the health of the economy, I focus my attention on Full Time Employment. The numbers come from the Household Survey. That’s the same data set used to calculate the official unemployment rate. Its bona fides are impeccable.
Full-time jobs are the kinds of jobs that people can build a life around. So let’s look at those…
That means Trump’s economy Created about 3MM more NEW full-time jobs than Biden. More than 2X more.
And most recently…
Over half a MILLION fewer Americans are employed full-time than a year ago.
Published in Economy
The issue is all of the other colored pieces of paper are bad, too. The differences people are forced to use the dollar at gunpoint. Just reporting. Not endorsing.
Well, maybe nothing is going to happen for a while. Like, maybe not until after the next election.
That was some silly media person, no respectable economist thought it was a good idea. Not even Krugman.
Well, yes, but what about the majority of economists?
I bet you’re right.
Ever since this story broke, I’ve been trying to figure out what they were up to in releasing the revision at this moment. Why not continue the deception until after the election?
Your explanation makes sense to me.
I just don’t see the stock market helping as much as a good jobs report.
I agree that they are not trying to juice the stock market.
A Fed rate cut would affect just about every financial transaction we can think of.
It’s been the subject of intense debate over the past year.
Most directly, it would affect the cost of borrowing money. That could conceivably be an election issue.
For example, if companies can borrow money at low rates, they can expand. They will hire people. They will start building improvement projects, which, in turn, will add jobs and profits in the construction sector. And so on and so on.
I understand that part, but I don’t think it’s quick enough for significant enough, and hopefully those companies would see it for what it is and not even do anything, at least not for a while. Maybe wait until Trump actually takes office. :-)
On Fox Business yesterday and this morning, I’ve heard a couple of commentators say that it was Trump himself who brought out the numbers discrepancy. Otherwise, it would not have gotten the attention of the BLS and the mainstream media.
I cannot find anything on the other news sites to confirm that, but I would believe it. The Democrats always try to cast Republicans as being not very bright. So if this is true, it’s probably the best Trump news story of the year. :) :) :)
Think about it like this. It’s September. You want to buy a house. All your finances are in order. How long will it take for you to find a house, get a mortgage and move in?
Companies are no different. There are no shovel ready projects on the shelf at XYZ Co.
And watch the price of platinum and all products that use it skyrocket . . .
Immediately it boosts the stock market. Theoretically, the value of a stock is the net present value of the company’s future profit cash flows.
warning – math ahead … but just a little
The Net Present Value formula is:
So other things being equal stocks go up as interest rates go down. And not just actual interest but EXPECTED interest rates. Witness yesterday. The markets we up up up in anticipation of a September interest rate cut. So the donor class benefits immediately.
But before you think about trading the Sept Fed meeting, beware. There is an old Wall Street rule of thumb …
Buy the rumor. Sell the news.
People’s expectations can be quite excessive. But those excess expectations get built into the price. Then when an outcome happens it inevitably is less than what some people expected. That disappointment can be reflected in the price.
Exactly. I’ve tried to see the other side of it for forever, but inflationism is stupid.
Interesting. Okay. So it would affect the stock market almost immediately. Okay. Thank you.
@Kozak was absolutely right about “juicing the stock market.” My word. The IPOs in 2020-2021 were crazy in number compared to any other years, brought about by “the historically low cost of capital.” Wow.
A strong bull market would affect the election in that it would be a very well publicized positive economic indicator for Harris, I think.
“Historically, low cost of capital” = replace people with machines
The Fed has been forcing interest rates too low for decades.
Actually, Trump blew it. Instead of embracing a conspiracy he should have made 2 important points:
1) this confirms what all the polls show- people think the economy isn’t well. You can gaslight all you want but people can look around & tell things aren’t going well under the Biden-Harris administration’s policies(keep tying them together for the love of all that one finds important).
2) the failure of the government to actually know the state of employment of the populace for the last year glaringly reveals the incompetence of the federal government in managing the economy- why would you want them to have greater control (which Harris does) when they are already unable to accurately measure the state of the economy. They can’t “fine” tune a soft landing or anything else since they are completely unable to accurately gauge the current state of the economy. Trump should shout: DO NOT GIVE AN INCOMPETENT ADMINISTRATION MORE TIME OR POWER. Letting them set prices, control housing etc is just a recipe for more disasters like Solyndra, rural bandwidth and electric charging station projects.
addendum-in other words the elite that look down on “fly over” country & the basket of deplorables is incompetent and in no way “elite” in the performance of their jobs. The technocratic & credentialed elite are not more competent than most-they are just better at padding their resumes & feathering their nests.
There is another effect of a rate cut on the market. Cutting rates will increase inflation expectations. That immediately reduces the value of interest paying things (fixed dollars) and increases the value of things that increase in value with inflation (corporations and property).
That fits my recollection too, that the Democrats raised the rates after 2021 to “slow the rate of growth of inflation.”
Of course, that’s why this move to lower the rates has been so controversial these past few months. If the Fed lowers them, it could drive inflation higher.
The Fed has a recent memory of the wizard Greenspan turning the knobs on the Federal Reserve control panel with fairly good success, but that was in another economic context. :) :) But they keep hoping the Fed can solve their problems. :) :)
When I used to read more finance books than I have lately, Jim Grant’s Interest Rate Observer was my favorite source. But his work is behind a paywall now, as well it should be. :) He does appear on Fox Business now and then. Fascinating guy to listen to. :)
Oh. The coin doesn’t have a trillion in platinum. It’s just a notional value assigned by the Treasury. It’s just that a weird law lets them mint coins in platinum without congressional authorization.
The joke is that when the yield curve is inverted and the Fed starts to cut rates it’s been followed by a recession like 9 times out of 10 in the past. And the yield curve has been inverted for a long long time. The Fed is always too late. But not too late to reignite inflation.
We should have stopped doing this by December 1986. Now everything is out of whack.
He started all of this. He is a terrible person. So, no.
Concerning inflation:
I read a fascinating book in 2011 by BlackRock analyst Russ Koesterich: The Ten Trillion Dollar Gamble (McGraw Hill, 2011).
This was a long time ago, and $10 trillion is just a fond memory. :) We’re now at $35 trillion.
At any rate, he wrote that there were only three ways the federal government could handle the national debt:
The third strategy has been haunting me. He talked a lot about this. He said the Federal Reserve had pursued a no-inflation policy since the 1970s. He said if they had, instead, let inflation go a little bit at a time, as it naturally occurs in any free market economy, it would have eased some of the debt on its own.
He wrote that inflation benefits borrowers but hurts creditors. He said our creditors–at that time, China was our main creditor–would be very ticked off at us because the dollars they were being paid back in would be worth less than the dollars we borrowed.
Over the past year, having watched the federal government try to grapple with the ridiculous debt-increasing financial moves it made during the pandemic, I’ve been wondering if inflation has been the secret policy of the Biden administration. I’m not saying it is, and I have no evidence to support that suspicion.
But I cannot help wondering.
It’s just like illegal immigration. I read a great story in, believe it or not, the New York Times in the late nineties in which the reporter researched and wrote exhaustively on the benefits accruing to the federal government from illegal immigration. It was a Social Security issue. He said that illegal immigration makes the federal government richer and makes the state and local government poorer. He was right about that.
I think a similar thing may have been happening with inflation. It actually helps the federal government while it hurts individuals, particularly those living on a fixed income.
These are purely musings. :) :) But if it turned out to be true, I would not be surprised.
Seems like any person with two brain cells to rub together should understand that anyway, from just that one fact if nothing else. But the larger problem remains the number of people who DON’T seem to have two brain cells to rub together. And how to somehow “reach” them.
Yes, if the coin had to actually contain that value of metal – which coins nowadays rarely if ever do – it would be huge. But they could make a platinum coin the size of a dime – or smaller – if they wanted to, and call it “$1 Trillion.”
Or even “$35 Trillion,” and “settle” the entire (current) debt with it.