The Market Ticker
Commentary on The Capital Markets- Category [Employment]


Total nonfarm payroll employment increased by 223,000 in April, and the unemployment rate was essentially unchanged at 5.4 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, and construction. Mining employment continued to decline.

The monthly oscillation continues but the annualized figure looks somewhat reasonable.  The bad news is that what we don't know at this point is whether we're peaking and rolling over (which is entirely possible) or there's a "liftoff" that's starting.  Last month was revised down which given the household survey was rather curious; this month, however, showed a quite-strong +952k household lift in the employed count.

Here's the problem in the number: Corrected for working-age population increases, annualized, the change is indistinguishable from zero (-7,000.)  This trend has been going on for a long time and it appears that the so-called "liftoff" was nonsense.  There is no way you can have budget or social stability on a durable basis without correcting this problem and there is no evidence we have or are doing so.

The "official" unemployment rate is now 5.4% which is functionally (within a couple of tenths) where The Fed claims they will lift rates.  However, the truth in the population employment ratio is still sadly behind and shows no sign of breakout; last year in June and July it recorded the same 59.4% figure we got this month.  If we get another couple of tenths into and through the summer that would be positive, and we might -- summer part-time employment hiring has yet to be reflected to any material degree (that shows up starting next month), but I'm not holding my breath.

I find the crowing on the Idiot Box about construction hiring to be quite-amusing; it was presented as "particularly strong."  It's not; April is typically construction hiring season and the +45,000 this year is just 4,000 more than it was last year this month.  This is counterbalanced by a truly nasty durable goods figure of -1,000 -- last year, this month, that was +12,000 employees.  But for vehicles (which was +6,000) that figure would have been even more-negative.

In addition retail trade typically hires pretty nicely this time of year and yet it was less than 1/3rd of last April, net-net.  Health care, on the other hand, (mostly low-wage) was up almost 56,000 positions. while leisure and hospitality, which typically hires well in the spring, was up less than a third of that last year and other services were up less than half.

Strong?  Well, not really; average weekly hours were flat annualized and month-over-month, and down a tenth from February.

I'll call it "warm but not great", although the market seems to like it plenty with the futures being up roughly 1% pre-open and the 10 year bond down 1.6% to 2.14% yield.  Is this in belief that The Fed is going nowhere?  Maybe, but if true then we're in for an ever bigger problem in a few months as the leading indicators for the market are not looking good at all and the lack of an available policy response if the slowdown that they predict materializes into the late summer and fall will make things quite dicey.

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Folks, there is exactly one way you're going to put a stop to this sort of nonsense:

At the end of October, IT employees at Walt Disney Parks and Resorts were called, one-by-one, into conference rooms to receive notice of their layoffs. Multiple conference rooms had been set aside for this purpose, and in each room an executive read from a script informing the worker that their last day would be Jan. 30, 2015.

Some workers left the rooms crying; others appeared shocked. This went on all day. As each employee received a call to go to a conference room, others in the office looked up sometimes with pained expressions. One IT worker recalls a co-worker mouthing "no" as he walked by on the way to a conference room.

Disney, like so many other firms, apparently has been moving many of their high-paying IT jobs effectively offshore -- in many cases demanding that current employees train replacements that then come in and take over.  Those replacements are H1b immigrants, frequently from India, where they obtain subsidized schooling and, of course, come from a land where the cost of living is a tiny fraction of what it is here.

These moves are often disguised as "outsourcing" to consultant outfits and similar that do the actual hiring, or as is often the case with call centers and similar the entire operation is moved offshore.  In either event the result is the same: Good paying American jobs are lost to foreigners.

This has been going on now for well over a decade; I saw the start of it back before I stood up MCSNet, but the trend has accelerated greatly.  Effectively, if it can be offshored it will be in some fashion, exploiting the wage disparity between nations.

You can argue all you want about lifting the living conditions in these other lands but doing so comes at our expense.  Even so-called "American" companies like General Motors and Ford have effectively offshored huge percentages of their car manufacturing through their supply chains and where the pieces that go into the cars come from.

We, the people, have permitted this.  We in fact fund it every time we buy products and services made by companies that do this.  While today there are no alternatives left in many industries that do none of it we can stop buying goods and services from the worst offenders and by doing so pressure firms to bring home their manufacturing -- and jobs.

As an example Apple both sources virtually everything that goes into its iPhone and iPad products from Asia and assembles there too.  If you care about American jobs you cannot buy Apple products -- period.  Likewise, Disney is not a "need", it's a want, and if you care about high-paying American IT jobs don't go to Disney parks.

There is only one way to stop this crap and that's when you, the American consumer, refuse to buy from the worst of these firms and press the advantage when someone pops up to assemble products and employ workers here in America.  As soon as that pressure is applied someone will step up and seize market share.

It starts with you folks; you either care about the future of this country and both your job and the job that your kids will (or won't!) have, or you don't.  You either put a stop to this through the pressure of the market or you not only ratify you accelerate this trend by buying an iPhone, iWatch or iPad and going to a Disney park.

Economic suicide is a choice.

Choose wisely.

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