- Once again, a week of worse than expected economic data punctuated by another better than expected non-farm payroll report from the government
- ADP private sector payroll report was slightly below estimates
- 5,000 manufacturing jobs lost – 3rd consecutive monthly decline
- Unemployment rate dropped
- Labor participation rate up to 62.9 – .2% above lowest point
- Large sector of labor force still comprised of older workers
- Teens, twenties and thirties are at all-time lows
- Older Americans want part-time jobs, so increase of part-time jobs contribute to increase in all jobs
- Given the strong government jobs number, the media is discounting all the weak data, including GDP, productivity, consumer spending and industrial production
- The jobs we’re creating do not reflect economic strength
- The weekly unemployment numbers are hovering at 42-year lows
- Does anyone believe that this is the strongest economy in 42 years?
- The hiring numbers are suspect to begin with because of the government’s assumptions
- The Trade Deficit dropped not because our exports surged, but because out imports plunged
- Our economy is too weak to support a greater number of imports
- A closer look at the data behind the government jobs number actually supports the rest of the weak economic data
- Personal Income and Spending on the month missed estimates
- May Manufacturing PMI dropped slightly
- April Factory Orders fell by more than expected
- Year over year, orders are down 6.4%
- 6th consecutive month that factory orders have been down year over year
- This has only happened in America during a recession
- Mortgage applications fell sharply on the week – 7.6% decline, led by a 12% decline in re-fi’s
- May Services PMI fell to 56.2 – lowest level since January
- ISM Non-Manufacturing Index dropped to 55.7 – the lowest level of the year
- The revision to Q1 Productivity – 3.1% decline
- We also had a decline in 2014 Q4
- Corporate profits plunged 5.9% in Q1
- Unit Labor Costs surged by 6.7% – this does not represent wages
- All this data predicts future layoffs
- The Fed knows this, so they are reluctant to raise rates
- The Bloomberg Weekly Consumer Comfort Index fell to 42.5 the 8th consecutive decline – the first time in its 30 – year history
- The Dow continued to decline on the jobs report
- NASDAQ still hanging in
- Margin debt is at a record high
- The dollar was stronger on the week
- The euro finished positive
- By next year European inflation will force the Bundesbank to retreat from QE
- Gold was down on the week, as euro strength signals QE less likely in Europe
- Expectations of rising interest rates have been suppressing gold, but when reality rears its ugly head, the sellers will be gone and the buyers will be out in full force
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