NF Payrolls Disappointment

Friday, June 03, 2005 | 09:36 AM

I have to disagree with the assessment of job growth as "steady."  Its not -- its been erratic, weak and disappointing. NFP rose by a mere 78,000 in May (April's outlier 274k was unrevised ). March was revised down by 44,000 to 122K.  Weakness in May was across the board, but notable was the poor service sector growth (+64K versus an imaginary +232K in April).

How bad was this report? April's +274k outlier included (w/o seasonal adjustments) a birth/death improvement of 257k. May's birth/death adjustment contributed +207k; the bottomline was, even with this fat b/d number, we only got +78k new jobs. Despite the spinning you heard on TV, there's no way to avoid reality:  This Nonfarm payrolls report stunk the joint up.

Look:  The consumer has held up their part -- they've spent steadily, despite weak personal income improvement, and even weaker real income after inflation. But they are not the problem -- Corporate Business hiring and spending is. This recovery has been unable to generate anything other than stimulus based momentum. There's been little in the way of   organic (read non-stimulus based) growth.

Unless and until business starts hiring and spending aggressively, the best we can hope for is an anemic, real estate fueled economy.

Friday, June 03, 2005 | 09:36 AM | Permalink | Comments (4) | TrackBack (2) add to | digg digg this! | technorati add to technorati | email email this post



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But the real estate fueled economy is driven by consumer debt, now about $11 trillion. Consumer debt is growing at 10-11% per year, far outpacing GDP. On top of this, they owe future taxes to pay off $8 trillion in national debt. Their future has been mortgaged away. In the near future, foreigners will finally realize that US consumers are destitute and terminate their line of credit with higher interest rates. These higher rates will cause the debt burden to mushroom. For anyone who hasn't figured this out yet, sorry about the bad news.

Posted by: grim reaper | Jun 3, 2005 10:56:22 AM

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