Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
Trump Relinquishes Control of Foreign Policy - 26th Feb 17
[Gratis] "Dark Money" Secrets Revealed! - 26th Feb 17
Stock Market SPX New All-time Highs Continue - 25th Feb 17
POWERFUL GOLD & SILVER COILED SPRINGS: Important Charts You Have To See - 25th Feb 17
Underperformance in Gold Stocks Argues for Interim Peak - 25th Feb 17
Watch What Happens When Silver Price Hits $26...  - 25th Feb 17
Gold Futures Buying Yet to Start - 25th Feb 17
When the Stock Market Flying Pig Tops - 24th Feb 17
Gold, Second Fed Hike and Interest Rates - 24th Feb 17
Bitcoin Price Hits Record High! - 24th Feb 17
Another Stock Market Bubble? Bring it On! - 24th Feb 17
What Investors Need To Know About U.S. Money Market Funds? - 24th Feb 17
When Was America’s Peak Wealth? - 24th Feb 17
The Oscars – Worth Their Weight in Gold? - 24th Feb 17
The Best Reasons to Buy Gold in the Age of Trump - 22nd Feb 17
Silver, The Return of Stagflation - 22nd Feb 17
Why EU BrExit Single Market Access Hard line is European Union Committing Suicide - 22nd Feb 17
Gold: Short End US Rates Matter More Than Long End Real Yields - 22nd Feb 17
CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry - 22nd Feb 17
Here’s Proof Rising Rates Are Good for Gold - 21st Feb 17
Gold and Silver Weekly Update - 21st Feb 17
US Dollar and Gold Battle of the Cycles - 21st Feb 17
NSA and CIA is the Enemy of the People - 21st Feb 17
Big Moves in the World Stock Markets - Big Bases - 21st Feb 17
Stock Market Uptrend Continues - 21st Feb 17
Brent Crude Oil Price Technical Update: Low Volatility Leads to High Volatility - 20th Feb 17
Trump’s Tax System Could Spark The Wave Of Self-Employment - 20th Feb 17
Here’s How to Stay Ahead of Machines and AI - 20th Feb 17
Warning Signs Of Instability In Russia - 20th Feb 17
Warning: This Energy Investment Could Wreak Havoc On Your Portfolio - 20th Feb 17
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

President Obama is the One Peddling Fiction on State of US Economy

Economics / US Economy Mar 14, 2016 - 12:32 PM GMT

By: Michael_Pento

Economics

In his final State of the Union Address, President Obama chided, "Anyone claiming that America's economy is in decline is peddling fiction." Following the recently released February Non-farm Payroll Report, which showed a net increase of 242 thousand jobs, he doubled down on that same contention. The seemingly robust number of new jobs created prompted the President to remark, "The numbers and the facts don't lie, and I think it's useful given that there seems to be an alternative reality out there from some of the political folks that America is down in the dumps. It's not. America is pretty darn great right now."


But the truth is, that headline jobs number for February was very misleading, and it is you, Mr. Obama, who is peddling fiction.

First, even though there were 242 thousand net new jobs created, there were fewer hours worked during the month. The Index of Aggregate Hours Worked shrank by 0.4 points to 104.9, from 105.3 in January. This means there were actually less total hours worked in the economy during February than in January.

This could only be the case if the number of full-time jobs diminished at a faster clip than the amount of part-time jobs created. In fact, the Household Employment Survey hints at this conclusion, as the number of part-time jobs created outstripped the number of full-time jobs by 7.5 to 1.

It makes perfect sense that this part-time, Uber-driver economy would also produce an average hourly work week that shrank by 0.2 hours, to 34.4; and that average hourly wages declined for the month by 3 cents.

Then we have the labor-force participation rate, or the share of American non-institutionalized civilians over the age of 16 who are either working or looking for a job. This ratio dropped dramatically in the wake of the 2008 financial crisis, yet has also failed to make a meaningful rebound since.

US Labor Force Participation Rate

Adding to this number of despondent would-be workers, is the fact that those who enjoy gainful employment have suffered with a lack of real income growth.

Real Median Household Income

A falling work week, dropping wages and fewer hours worked does not make for a good employment report or a healthy consumer. However, it isn't just the employment conditions in the U.S. that depict a weak economy.

According to the Census Bureau, a record 46.2 million persons, roughly one in seven Americans (14.2%), currently live below the poverty line. That rate was 12.5% before Obama took office. And we have an astonishing 51 million Americans who live just above this official threshold--making 50% of all Americans living in or near the penury class.

Despite the recovery myth touted by Mr. Obama, the amount of wealth held by the bottom 50% of the U.S. population declined to 1.05% in 2013. This is less than half of what it was in 2007, when the share of the country's wealth held by the poorest 50% of the population was 2.5%.

According to government statistics, the rate of poverty for every year under the Obama presidency has been higher than it was for each year during the horrific economic stewardship of George W. Bush's presidency.

In addition, the number of beneficiaries on the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, has surpassed 46 million, according to the Department of Agriculture (USDA)--that's 14.6% of the population. Back In 2008 there were 28.2 million people on food stamps, or 9.2% of the population. To put this in perspective, in 1969 participation in the SNAP program stood at $2.8 million, or just 1.4% of the population.

With Americans living less prosperously, it's not surprising that household debt has increased back to 2007 record levels of $14.1 trillion. Business debt has also ballooned from $10.1 trillion, to $12.6 trillion. And our National Debt boomed from $9.2 trillion, to $19 trillion. And to keep all this debt more palatable, the Fed's balance sheet has exploded from $880 billion, to $4.5 trillion. All this means the tenuous and anemic state of the U.S. economy is merely held together by the tape and glue provided by the Fed's artificially-low interest rates.

To be sure, President Obama is clueless about what will happen to the fragile U.S. consumer after interest rates normalize. But once inflation targets are achieved by the Keynesian counterfeiters that run global governments and central banks, interest rates will indeed spike. And then it will become shockingly clear that the economic recovery was just a mirage created by the real fiction peddlers in Washington, Beijing, Brussels and Tokyo.

Michael Pento produces the weekly podcast “The Mid-week Reality Check”, is the President and Founder of Pento Portfolio Strategies and Author of the book “The Coming Bond Market Collapse.”

Respectfully,

Michael Pento
President
Pento Portfolio Strategies
www.pentoport.com
mpento@pentoport.com

Twitter@ michaelpento1
(O) 732-203-1333
(M) 732- 213-1295

Michael Pento is the President and Founder of Pento Portfolio Strategies (PPS). PPS is a Registered Investment Advisory Firm that provides money management services and research for individual and institutional clients.

Michael is a well-established specialist in markets and economics and a regular guest on CNBC, CNN, Bloomberg, FOX Business News and other international media outlets. His market analysis can also be read in most major financial publications, including the Wall Street Journal. He also acts as a Financial Columnist for Forbes, Contributor to thestreet.com and is a blogger at the Huffington Post.
               
Prior to starting PPS, Michael served as a senior economist and vice president of the managed products division of Euro Pacific Capital. There, he also led an external sales division that marketed their managed products to outside broker-dealers and registered investment advisors. 
       
Additionally, Michael has worked at an investment advisory firm where he helped create ETFs and UITs that were sold throughout Wall Street.  Earlier in his career he spent two years on the floor of the New York Stock Exchange.  He has carried series 7, 63, 65, 55 and Life and Health Insurance Licenses. Michael Pento graduated from Rowan University in 1991.
       

© 2016 Copyright Michael Pento - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Michael Pento Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife