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2019-01-04 09:06 by Karl Denninger
in Employment , 322 references Ignore this thread
Screameth The Bureau of Lies and Scams
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Total nonfarm payroll employment increased by 312,000 in December, and the unemployment rate rose to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, food services and drinking places, construction, manufacturing, and retail trade.

Do you believe that?  Well, let's have a look inside to see what the unadjusted household numbers say.


Note that the monthly graph shows a decrease; 534,000 to be exact.  That is to be expected as December is usually a firing month but this number is not materially out of line with the last two years in December (578 and 587, respectively.)  So where did the magical extra 100,000+ people come from?  Hmmmm...... if we'd had a -300 or -400 print I'd believe it, but with this print do I?


Now the 12-month population-corrected number is +100,000.  That's the number of jobs changed ex the increase in the working-age population.  That's slightly above neutral, but over the last year or so that figure has come down to anywhere from somewhat negative to neutral -- from strongly positive.

The Employment-Population ratio came down by three ticks which is in line with the historical expectation for December.  So that is not particularly interesting either.

So who got fired?  Mostly not-educated (less than High School), which is normal (seasonal help being let go) -- but also everyone else to a small degree.  I'm not cranked about that either; again, it's in the range of normal expectations.

What's really scary is that Health Care continues to be the financial rapist of the American Population, put 50,000 people on payrolls last month, I'm willing to bet 9 out of 10 of them never perform a second of patient care in their careers and this year that totaled over 346,000 people.  Given the outrageous nature of the monopolist scams in that "sector" of the economy and the impact on the budget of both families and government addressing this is both necessary and politically impossible.

I will remind you that with no recessions and unrealistic expectations for continued growth Medicare hits the wall in 2024.  But there was a huge (24%) increase in total CMS spending first two months of the fiscal year .vs. last fiscal.  The part of this that was fiscal year-end gamesmanship (e.g. intentionally not paying on time by the government to make the budget numbers look better) is impossible to determine.  The problem is that when that wall is hit the budget deficit "recognized" (as opposed to attempted to be hidden on a mostly-successful basis) will shift to entirely recognized and jump by some $500 billion a year immediately and forevermore.  This is probably not a 2019 event but I'm no longer thinking 2024; more like 2020-2021, especially if there is any sort of economic slowdown.

When (not if) it happens all the fiscal games are going to end immediately, along with the "hopes and dreams" of both the hide-the-sausage GOP and scamfest Democrats.  The odds of that event precipitating a market collapse are very high and the odds of it precipitating a federal and state fiscal collapse are not insignificant.

Buckle up folks -- this is going to get interesting, and I throw shade on the claimed figures - the Household Survey does not back up the BLS headline.

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User Info Screameth The Bureau of Lies and Scams in forum [Market-Ticker]
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The 2018 Medicare Trust Report states that asset depletion occurs in 2026. Not sure if you've reviewed that but would be curious to hear what the primary assumption differences you have in your model versus theirs.
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2024 is the latest projection.

The CMS run-rate for the first two months of 2019 on the MTS (which I just wrote on -- scroll down the page a bit for that article) suggests that's overly optimistic, and both assume no recession. If there IS a recession then tax receipts will drop materially and make depletion occur even sooner.

Winding it down.
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