Nonfarm payroll employment changed little (+54,000) in May, and the unemployment rate was essentially unchanged at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains continued in professional and business services, health care, and mining. Employment levels in other major private-sector industries were little changed, and local government employment continued to decline.
Oops.
The household data showed a small increase in employment, most of it coming from "not in labor force" decrease, and accounting for seasonal variation it was immaterial:
The problem with the "not in labor force" numbers is that they're highly seasonal; monthly they improved, but annually they're flat. In other words, that's seasonal delta and not a reason to cheer; on an annualized basis there has been no material change since the beginning of 2010 and the number of "not in labor force" folks continue to rise every month.
The employment rate of the population, the key number for tax revenues, is showing the same bounce we saw last year - and if it's playing out the same way then this should be the peak month in that bounce. That's bad.
If you're looking for a piece of good news in the numbers, there was one tiny bit of it: six cents of hourly wage increase and U-6 ticked down one tenth. But that's all. The diffusion indices collapsed, down more than 11 points to 53.6 with the manufacturing diffusion index off a near-even 10 points.
$1.7 trillion in deficit spending, $600 billion in QE2, over $4.5 trillion in deficit spending in aggregate over three years and we not only haven't fixed the employment problem we're still doing QE2 and now the heroin is doing nothing at the current dose as the addict has once again built tolerance and the negative effects continue to accumulate.
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Take away the Birth/Death adjustment of 206,000 and the Real NFP is: -150,000. This is the biggest monthly B/D adjustment in over a year. And if as all the pundit claimed last month, demanding the McDonalds addition of 62,000 janitorial, part-time jobs be added to the May number, the economy really lost over 200,000 in May. Time to price in QE 666.
As Karl said, QE2 was designed to let the government keep deficit spending. You might say that QE2 was unemployment insurance for the government, it didn't make things better, it just kept the government going in place of real revenue.
Now that QE is showing to not have stimulated the economy prepare for some serious deflation. Go over to theautomaticearth.blogspot.com and read up on what to expect and how to prepare. I've been on the fence for months but barring some engineered panic (still possible) that shocks CONgress into raisign the debt ceiling, it is deflation all the way.
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Here are my predictions for everyone to see: S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu. "You can't build a house of cards on a shaking table." - Tony Johns The January 2015 AMZN put at $130 (cost $4.25) will be a winner.
Correct Highonlife. Gen, if they QE they have to do it to a larger extent. Would they do this if it will push the dollar below final support and risk a currency crisis? Because QE3 is going to have to be much larger to have any effect.
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
Trade50 the problem is that his academic theory didn't work and real people had to pay the price.
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
The only question now is whether recognition of the failure will occur.
I believe it will, but it's NOT assured.
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I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft.Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear?
Gen you expect the Fed to recognize their failure? That would be the first time in my memory that Fed policy has ever changed course (I am a young man though).
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
QEs weren't intended to benefit the unemployed they just pushed up living costs as a little collatteral damage to the working and non-working
QEIII and PPT activity will all blend together now to maintain Ben Shalom's facade of recovery to try and con the working and unemployed to spend, spend spend, like there's no tomorrow
Trades50
Posts: 4215
Incept: 2007-10-30
Land of Tax and Spend
The fed has had diminishing returns for every QE, as Karl has been pointing out for some time now. Seems like they realize it. So probably no QE3. Banks are still flush with QE money. Something different this time?
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When the people fear the government, there is tyranny. When the government fears the people, there is liberty. - Thomas Jefferson
Samadams
Posts: 589
Incept: 2008-12-03
Somewhere in TX
I don't think that TPTB will allow a deflationary depression without fighting all the way, especially not going into an election season. Thus, we're looking at QE III, though it may be called something else and engineered a bit differently. The only questions are:
1) How much further does the stock market get pushed down to panic the Congressweasels into demanding that "something be done?"
2) What form will it take?
and
3) How big will it be?
I don't have those answers, but that QE III is coming is, IMHO, beyond doubt.
[EDIT]: Oh, and to put some icing on the cake (of QE III coming), consider that QE II was all about financing the federal government's deficits for part of last year. It is obvious that the government will not suddenly cut $100 - $150 billion PER MONTH from its spending...so SOMETHING will be needed to finance that spending. The only thing that I can think of besides QE III is the government taking over IRAs and 401(k) plans and "investing" the money in long term government bonds at 3% (or some such ridiculous amount). Anyone see it differently?
Or they ramp up the QE for QE3. Maybe $1 trillion over six months, which will incidentally correlate with the Federal budget deficit...
Someone has to explain to me how the Fed cuts off the juice without the .Gov's reigning in spending. Because the Fed is clearly not independent, and I don't see them taking their foot off the gas until the government indicates a willingness to cut back spending.
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
The Fed is not independent despite its protests that it is; it has never been independent. Never.
Politically, further QE risks severe reactions in too many places. I don't see it; it didn't work and now it's not just bloggers like me saying it - Greedscam said it this morning on national television.
Yes, Bernanke is a pig, yes, he's insane, yes, he's an egomaniac, but in the end he is a political animal.
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I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft.Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear?
Gen see the second paragraph of my post directly above yours. Agree Fed is not independent and re: QE3 & .Gov, that is a very serious problem.
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"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
I heard some pundit on CNBS the other day say that the fed needed to ease again, only THIS time they need to TARGET employment....Really?
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Young new trader. Take anything I say with a grain of salt, and please don't hesitate to correct me. I'm here to learn, and hopefully make some money. :D
"Let China sleep, for when she wakes, she will shake the world." - Napoleon Bonaparte
"Circulation ceases first at the outer edges [Europe and Japan]. It will take a while yet for the decay to reach the heart [America]." - Foundation & Empire by Isaac Asimov
Better hurry up Ben, because the old man is getting sick. Also better hope the next round of debt isn't a hot dose. Qe1 and Qe2 are abject failures cutting the debt heroin with just a little rat poison of easing is bound to do the trick.
Run, run, run Ben
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If you want a vision of the future, imagine a boot stamping on a human face - forever. George Orwell
"$1.7 trillion in deficit spending, $600 billion in QE2, over $4.5 trillion in deficit spending in aggregate over three years.."
So let me get this straight.. Our so called growth over the last decade is mainly due to deficit spending. And now, when the politicians are really going Hog wild in trilion dollar deficits, the growth is petering out. The entitlement programs are bankrupting the country, but the politicians are too busy (getting re-elected so they can run to get re-elected again and taking pics of their tighty whities) to really address and fix/change those programs. The Fed is protecting the banks from disclosing the fact that they are basicly bankrupt, after the banks got Congress to let them do as they pleased in the name of providing more folks a chance to own a home. Families are spending more of the little bit of money they have for the basic necessities as comodity prices skyrocket. Train tracks, fences, garbage cans..etc.. are getting stolen and sold for scrap by desperate criminals to buy drugs sent over the wide open Southern Border as China becomes the new Super Super power by stealing our Technology 24/7.
It appears the future Standard of Living in the US is about to take a Big Nose Dive after the crooked bankers/wall street and inept politicians have Cleaned House. When does the Revolution Start?!?
Actually, our so-called growth since 1983 has been due to debt pull-forward and not actual growth.
We shifted that to the government in 2007 as the consumer and business were tapped out and couldn't go any further.
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I don't care if it makes sense -- only if it makes money. -- Me Bank (n): See scam, fraud and theft.Eat a bankster -- they're low-carb. What part of "shall not be infringed" was unclear?
