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July’s jobs report is probably not as good as it seems

by Walter Kurtz, Sober Look,via Also Sprach Analyst:

The US employment numbers this morning generated a sharp rally in risk assets, with crude oil rising 3.5%, S&P500 up 1.8%, copper up 1.6%, and Brazilian Real up 90bp.

It’s worth taking a quick look at what in this employment report is causing such euphoria and whether it is justified.

The markets have focused on the private payrolls increase, which was 62K higher than the forecast. In particular it was the pickup in manufacturing payrolls of 25K vs 10K expected.

This is certainly great news, but unfortunately this report is not as strong as the markets’ reaction indicates. Here are the reasons:

1. The prior month in private payrolls was revised down by 11K. That’s not an insignificant revision.

2. The unemployment rate actually went up from 8.2% to 8.3% and underemployment (U6) went up from 14.9% to 15%.  In fact, this is a third month in a row that saw an increase in U6.

3. Hourly earnings were lower than expected (0.1% vs 0.2%). The YoY growth in hourly earnings is 1.7%, the lowest since 2010. This is not positive for consumer spending.

4. Growth in temp payrolls continues to be significantly stronger than in permanent jobs. It tends to indicate lack of confidence among employers.

Read More @ AlsoSprachAnalyst.com

7 comments to July’s jobs report is probably not as good as it seems

  • Alvin

    I live and own/operate a general store in a rural community in Newfoundland. Summer months are normally the busiest of the year and I can honestly say that over the past few years, the summer season is getting slower and slower. Last year, things didn’t pick up until the middle of July (2 weeks later then normal). This year, things only started to pick up on Monday past. Yup…you heard me. July 30th. That’s 2 weeks later then the previous year. That leaves me with 4 weeks to try and cash in on a few dollars. Things are that slow this year that for the first time, I have NO employees on this summer. I normally have 2 employees on the books. I am just giving one worker a few hours here or there as I need her and just pay her CASH. Sean knows my story,
    http://sgtreport.com/2011/11/the-little-man/ and I’m sure that this scenario is being played out most everywhere. I tell you hard times will be here once more.

    • bubba

      God bless you Alvin…we own 2 businesses and we have no employees anymore for the same reasons.

      folks, a friend of mine just did his last job for me the other day.

      At one time he had over 50 employees with great wages and benefits.

      Those jobs are gone forever…we must get our country away from these bastards.

      It will require great commitment.

      • Alvin

        As Sean always said. We are all in this mess TOGETHER. I would love to wish you the best of success, but we are only kidding ourselves. Only benefit to my business, I have ample opportunity to stock up on food, dry goods, silver, seeds etc. Good luck, hope you are preparing as well.

    • Tony

      Alvin, Good luck, I am a business owner in the USA & encounter similar circumstances. The situation is global & by design.

  • joe

    obama supporting syria yeayea

    i realized 10 years ago get out of buisness pay down debt
    these scum bags will collAPSE THE ECONOMEY by design

    get any job prepare for full collapse
    700 trillion derivitives black pool

    sorry most people will go crazy this will happen quickly overnight

    goverment by the goverment for the goverment to serve the goverment
    you are just a peasant slave

    • Tony

      Joe, Good observations, The question is have you dug into history and figured out whom has co-opted our government? I have a theory, but most don’t want to hear it.

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