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Friday, March 4, 2011

Breaking down the jobs report honestly

In yesterday's 'episode' of the stock market soap opera, "The Greedy & the Soulless", Wall St. spiked up dramatically by almost 200pts based on nothing real - just illusions and hope that today's jobs report from the Bureau of Labor Statistics was going to show strong indications that unemployment dropped way down and good times for all were ahead.  Then the rest of the global markets followed with spikes of their own like good little puppy dogs.

Ok..  so let's look into the jobs' report (www.bls.gov) .. Hmmm..

"Nonfarm payroll employment increased by 192,000 in February, and the unemployment rate was little changed at 8.9 percent"

~  Hmm.. the previous month unemployment dropped from 9.4% to 9% based on 200k more unemployed people giving up looking for a job and statistically not counting anymore as 'unemployed'. So more people giving up this month has to be taken into consideration for the drop to 8.9%.  Also ,the government must create 150k new jobs simply to keep up with the rise in population.  So really, 42k new jobs were created based on that criteria.

Continuing... Let's count how many times the words 'unchanged', 'changed little' or words to that affect are used for this next section...  I will highlight in bold...

"The number of unemployed persons (13.7 million) and the unemployment rate (8.9 percent) changed little in February. The labor force was about unchanged over the month. The jobless rate was down by 0.9 percentage point since November 2010.

Among the major worker groups, the unemployment rates for adult men (8.7 percent), adult women (8.0 percent), teenagers (23.9 percent), whites (8.0 percent), blacks (15.3 percent), and Hispanics (11.6 percent) showed little or no change in February.

Both the civilian labor force participation rate, at 64.2 percent, and the employment to population ratio, at 58.4 percent, were unchanged in February."

~ The words were used four times but that's because they bunched many statistical categories together. If taken individually, you'd have eleven groupings unchanged or little changed since last month.

"The number of long-term unemployed (those jobless for 27 weeks or more) was 6.0 million and accounted for 43.9 percent of the unemployed."

~  More than 2 out of 5 unemployed have been jobless for more than six months.   If 6 million represent 43.9% of unemployed, then the official total out of work is 13,667,425 people. And since people who have given up looking for work aren't counted as 'unemployed' along with 5 other categories of worker not in full time employment, the unofficial Real number of unemployed is even higher.

So ultimately this month's jobs report was nothing special.  And "The Greedy & the Soulless" on Wall St made the Dow go up by close to 200 points based on anticipation of it.

And the market as of 1:30p today --  12,100 (-157pts)

The 'official' reason will be an oil spike but oil's been rising for over 2 weeks

Today's sell off is really a bunch of cowardly baa-baa sheep investors wiping egg off their faces at the realization they made a mistake to jump into the market yesterday based on finance news media telling them today's jobs report would be Strong.

~*~ This is the Real question no one has the courage to ask--  How can jobs be created when neither government nor corporations have incentive to create them?  If corporations increase hiring, they lose the free hundreds of billions in Quantitative Easing ($75 billion a month) given without strings by the Fed.  And there is not any job creation measures in the current budget, nor any job creation bills being presented to Congress by the President.   So- once again, how are jobs created when no one with the means to create them wishes to do so?

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