Friday, June 03, 2016
I Told You So
The monthly employment report could not be worse, and will rebound next month, but only to very disappointing levels. One of the special factors causing the "shock" factor in this report are probably Texas floods, with manufacturing and transportation delays. But a great deal of it cannot be blamed on special factors. The Verizon strike doesn't have anything to do with it.
There is strong agreement for May between the Household and Establishment surveys. Household is +26,000 jobs; Establishment is +38,000/25,000 private.
According to Household Table A-8, non-ag part-time workers for economic reasons rose by almost 500,000.
All of this really shouldn't shock anybody, but it will be reported and felt as shocking. There were significant downward revisions to prior months in the Establishment survey. The unemployment rate fell to 4.7% because of participation changes, with the month-to-month Not In Labor Force total rising 664,000. Participation rates have been falling for a couple of months. In March it was calculated at 63.0; this month it is 62.6 - lower than May 2015.
What is happening is that services are slowly downturning to follow manufacturing. Manufacturing is not pulling out at all.
Temporary help services was quite negative at -21,000. Generally this doesn't predict strong performance over the next few months.
Rail intermodal has been highly negative for several months. The CMI business to business credit survey (see page 6; look at the graph) shows that services are following manufacturing, with some more to go.
The June rate hike (snicker) is off the table. It always was.
The collapse in the worst-of-the-worst subprime auto issues has a little to do with this, but the basic problem is that the growth impetuses are all slowly fading. Inventory pile-ups have been forecasting this for quite some time.
Nothing I am seeing in any reports changes my assessment. We are in the first stages of a European-style business-led recession. It will be long and slow.
More about drivers whenever I have the time. In the meantime, from a political perspective, it ought to be obvious that the advantage is to the candidate talking about JOBS JOBS JOBS instead of the candidate talking about continuing current policies.
UPDATE: The May service sector reports are out, confirming my comment that the mechanism here is a slowing in services. Markit. ISM.
The jobs report is nowhere to be found on CNN's front page. CNN Money headlines it as "Unemployment Drops to 4.7% In Weak Jobs Report".
Good thing we've got a Democrat president, otherwise we'd be in a recession.
Joe - I unwarily walked into a nest of larval ticks at some point while I was out doing healthful yardwork in the healthful open air. A malaria-like episode ensued, and I am still on medication and still not recovered. Let's just say I really, really want to bring back DDT. If it's got to be me or the crows, I am willing to sacrifice the crows. And then there is the Zika. I am well beyond my childbearing years, but I shudder at the situation of those women who aren't. Zika is going to go endemic over two-thirds of the US. It's also an STD, so it doesn't help to hide in the city.
I also think that Trumpmas is almost inevitable. For one thing, the guy's just lucky. For another thing, he's closely wired to the real world, and after more than a decade of fantasy, it's a welcome change.
His competition really should be indicted, which makes her an impossible choice for those who don't want to live in an South-American type banana republic. I don't. And finally, as one watches the mobs of the left riot, it is almost impossible not to believe that we are veering into extremism on the Dem side (historically the path into fascism), and that makes the Trump the moderate choice.
These are strange times, aren't they? Very bleeping strange.
The anti-Trump riots are strange. They're being staged by Democrat-funded groups--the obvious conclusion is that the Democrat leadership at least acquiesces to it. I've been trying to figure out exactly what their goal is there. Is it simply that their "activists" need to be kept active, boys will be boys, and they're counting on the media to hush up any excesses? Or are they really trying to send Trump supporters the message that they're outlaw, in the old sense of withdrawing the protection of the law?
I wonder if they understand what they're doing?
This bully-boy stuff has been successful on college campuses, so they might be working off that program. It is counter-productive, but DO THEY KNOW THAT?
Well, that's been the #1 question for the last eight years. Are they crazy, or do they know something that we don't know?
Or something like that.
I just don't know any more. The "chaos-ization" of our institutions seems nearly complete, and I don't believe anything anybody says any more.
The only thing I Know For Sure, is that -- since Hitlery! isn't behind bars yet -- we are WAAAY beyond Rule-of-Law in this country. No law = no predictability. No predictability = hunker down.
I've posted a similar comment before, but I'll say it again: Institutions are nothing but a false god. A pretty good Constitution was enacted in 1792, and we've spent the last 225+ years writing trillions of pages of exceptions to it. It would be sad if we were the first to do such a thing, but history is littered with societies that did the same. So it isn't sad, it's pathetically inevitable.
It's somewhat funny though that Sanders gets any traction at all seeing as he has zero ideas himself. The best he can come up with is "free college" which sounds fine to people with college loans, but it's a one-time thing that solves nothing else going forward. Free College sounds like I get to go to college for free, and come out 4 years later with STILL no job prospects. Which sounds eerily similar to "secondary school" transforming/devolving into "mandatory high school". All it did was drag out a person's skills mastery from 8 years to 12, it improved nothing.
Which is probably why the bully-boys stuff works: it's primarily effective with a 7th grade intellect which is what is enrolling in college these days. Even a trade school expects you to have mastered basic math and writing skills, which too many high school graduates do not have lest their self-esteem be hurt. In twenty years it would not surprise me if trade schools started requiring 4-year college degrees in order to enroll.
I just love the way that the Left wants to get rid of jobs. I hope they get called out on it a lot over the next few months. There's Hillary wanting to get rid of $24k a year coal mining jobs. We had an oil train deraillment out here, so look for calls to stop all oil trains through the Columbia River Gorge. They will certainly be able to prevent an oil terminal in this town. They have no concern at all about how people will support themselves. They really don't care, except when they bemoan the homeless community.
I am certain - and all available evidence suggests - that this is not the case. They WANT people who cannot support themselves - this makes them rely on government transfer payments, ano so support the party of big government.
Or at least the ORIGINAL party of big government. The GOPe has seemed to join them at the trough in recent years.
And yes, the GOPe is just as bad as the Dems.