| Pentonomics - Non-farm Payroll Report was Bad but Better than Expected |
September 3, 2010 - 8:59am — mpento
Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Please feel free to repost with proper attribution and all links included.
Friday, September 3, 2010
By:
Michael Pento The BLS reported today that private sector employment increased by 67,000, while overall employment fell by 54,000. The unemployment rate ticked up to 9.6% from 9.5%. Far be it from me to highlight the negative side of this report but it is vitally important to know that manufacturing payrolls decreased by 27,000and the Goods Producing sector of the economy produced ZERO jobs in August.
The U-6 or underemployment rate--which includes part time workers who’d prefer a full-time position and people who are marginally attached to the workforce--increased to 16.7 percent from 16.5 percent.
Average hourly earnings rose 0.3 percent, while the average work week for all workers held steady at 34.2 hours.
So this report was weak but not abysmal and better than what the Street had expected. This sets up the market for a short covering rally—at least during the start of the trading day. But the facts are that we are still not creating goods producing jobs in this country.
In fact, we lost over 200k goods producing jobs just in the last 12 months. Manufacturing, mining, construction and agricultural jobs create goods that can be traded and stored and provide the basis for developing real wealth. That is why they are so important and without them a country is doomed to chronically increase its trade and current account deficits. That leads to a constant erosion in the value of the currency and causes an inexorable selling of domestic assets into foreign ownership.
A not so great but better than expected increase in service sector jobs doesn’t mean our structural problem with unemployment has been solved.
Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. Please feel free to repost with proper attribution and all links included.
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