Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
How Binance SCAMs Crypto Traders with UP DOWN Coins, Futures, Options and Leverage - Don't Get Bogdanoffed! - 20th Jun 21
Smart Money Accumulating Physical Silver Ahead Of New Basel III Regulations And Price Explosion To $44 - 20th Jun 21
Rambling Fed Triggers Gold/Silver Correction: Are Investors Being Duped? - 20th Jun 21
Gold: The Fed Wreaked Havoc on the Precious Metals - 20th Jun 21
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Employment - The Bed-Pan Economy

Economics / Employment May 12, 2014 - 12:24 PM GMT

By: Fred_Sheehan

Economics

Data portrayed in the "Employment in Total Non-Farm" payroll (NFP) chart is used by central bankers and Wall Street strategists to assert economic strength. They either think the trend demonstrates morning in America, or, they know otherwise, but cannot fashion anything better.


The Federal Reserve chairman, probably any Fedhead for that matter, whip off cheerleading spiels supported by numbers that make no reference to historical comparison. For that matter, they use numbers that make no reference other numbers, and numbers without reference have no meaning. Fed chair Yellen recklessly disregarded context in her March 31, 2014 speech in Chicago: "Since the unemployment rate peaked at 10 percent in October 2009, the economy has added more than 7-1/2 million jobs and the unemployment rate has fallen more than 3 percentage points to 6.7 percent. That progress has been gradual but remarkably steady - February [2014] was the 41st consecutive month of payroll growth, one of the longest stretches ever."

 

 

 

Yellen's data, in reference, offers no promise of recovery. There have been no jobs "added" since the unemployment bottom in 2009. Yellen is spoken of as a "great labor economist." She either knows her statement is misleading, or, she is demonstrating how little economists know. It was not too long ago Simple Ben was ordained "the Greatest Economist of the Greatest Depression," after which, he ushered us into The Great Recession and created The Protracted Depression.

 

In  "April 2014 - Castles in the Air," I wrote the "span from December 2007 to March 2014 is 75 months. Seventy-five months after jobs peaked in 1990 (as we entered the 1900-1991 recession), there were 10 million net new jobs. Seventy-five months after the post-2000 job peak, there were five million net new jobs. In March 2014, we are still half-a-million jobs south of the zero bound."

 

More important is whether jobs can support a family. The nearby "Breadwinner Economy" chart is designed for this purpose. The chart is from David Stockman's ContraCorner website as is the discussion of what constitutes a breadwinner job in "The Born Again Jobs Scam: The Ugly Truth Behind 'Jobs Friday,'" and "The Fed's Labor Market Delusion."   

 

 

  

Only one aspect of the delusion will be discussed here. This is the quality of breadwinner jobs created since NASDAQ 5000. As such, this does not directly address the problems of those who have lost an $80,000 job for $40,000 employment, the long-term unemployed, the part-time employed, and the misleading data that accompanies headline news. For instance, people who work one hour a week are counted as "part-time workers" in U.S. government data.

 

From "April 2014 - Castles in the Air":"The Greenspan NASDAQ Bubble peaked in 2000 and breadwinner jobs reached 72.7 million. After Greenspan and Bernanke artificially revved up the mortgage-finance economy through 2007, jobs topped out at 71.9 million in December 2007. By June 2009, the deflated mortgage bubble had cost five million jobs: there were 66.2 million NFP workers in June 2009. By March 2014, there were 68.3 million breadwinner jobs, 3.6 million fewer than in December 2007, a level achieved during the second Clinton Administration. The quality within the breadwinner industries has deteriorated significantly and the population has grown."

 

A major change in the composition of breadwinner jobs since 2000 has been the shift from production to service. More specifically, jobs from the goods-producing economy (manufacturing, construction, mining, and energy) have declined from 24,627,000 in January 2000 to 18,941,000 in March 2014. The largest relative growth of jobs has been within the Health, Education, and Social Services (HES) area. From 24,382,000 jobs in January 2000, HES jobs have sprouted to 31,505,000 in March 2014.

 

Goods-producing jobs pay much better than those within health, education, and human services. HES jobs are highly dependent on fiscal solvency, with the exception of hospital employment which is vulnerable when the government loses its exorbitant privilege of funding its promises for free. Less hospitals, 75% of the revenue supporting these jobs comes from local, state, and federal funding. The average pay within the HES assembly is $35,000. Yellen is not going to achieve "escape velocity" without HES employees shuffling their accounts faster than Charles Ponzi.

 

            Even given the deep contraction in 2009, the re-emergence of HES positions is much slower than the years leading up to the Greenspan Famine. From January 2000 to December 2007, 4.8 million, or 51,000 HES jobs, were added each month. Since the bottom of the Great Recession (stage 1 in Bernanke's Protracted Depression), 1.5 million, or, 26,000 jobs have been added each month. "Restored," not "added," which is Yellen's claim. (Breadwinner jobs also include "Core Government" employment, which excludes Post Office and Education. There were around 11 million in 2007 and in 2014. Uncle Sam's workers receive around $60,000 on average.)

  

            Jobs clawed back within the HES sectors are inferior to those before. By and large, the jobs have not been among doctors, skilled nurses, or medical technicians. About 80% of them - 1.2 million - fall within the Bed-Pan Economy: home-health aids, day-care workers, and nursing-home staff.

 

 

The April employment numbers released on May 2, 2014, were greeted warmly. Front-page headlines from the Wall Street Journal ("Job Growth Gathers Steam") and Financial Times ("U.S. Jobs Growth Exceeds Expectations") were as untutored as Chairman Yellen's claims.

 

By Frederick Sheehan

See his blog at www.aucontrarian.com

Frederick Sheehan is the author of Panderer to Power: The Untold Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession (McGraw-Hill, November 2009).

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.

Frederick Sheehan Archive

© 2005-2019 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