The Market Ticker
Commentary on The Capital Markets- Category [Employment]
2015-06-05 07:56 by Karl Denninger
in Employment , 319 references


Total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, leisure and hospitality, and health care. Mining employment continued to decline.

I'm not sure I'm buying the headline..... let's have a look inside.

Hmmm..... now that's not so awful.  How about adjusted for population?

So just slightly above the flatline -- which is mostly where we've been since the end of 2013.

Why did the unemployment rate tick upward?  Close to a million people tried to come back into the workforce but a lot of them didn't find jobs -- in fact, of those who came back in about 215,000 of them didn't find jobs.

However, the population:employment ratio did tick up two tenths, which is positive and back to where it was around 2009.

I do not know if that "breakout" is real, but I'll say this: If it is then the Fed is way behind as their moves take six months to a year to filter through the economy and be felt.  That means that we're in for a hell of a rough ride as The Fed will be scrambling shortly and the markets will not like it.

What I do not like in the report is the distribution of change.  College graduates saw their unemployment rate tick higher by a tenth of a percent while those without a high school diploma saw theirs go down by four tenths.  Those without a degree, but "some college", also saw improvement while high school grads saw deterioration.  This is unadjusted; the "adjusted" data shows growth in only one place -- high school grads.

But -- all of these groups, except for those without a high school diploma, are at or well under the "full employment" threshold.

The markets are 180 degrees out-of-phase with the data, and the apologists are all over the TeeVee trying to explain it away.  The idea that we can "stick it out" .vs. the "rest of the world" is utter nonsense: This was not true in 2008 and won't be now.

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