Come On BLS Can’t You Give Us The Real Jobs Numbers?

A Pfennig For Your Thoughts

June 10, 2019

* Currencies and metals rally on Friday…
* But then get turned around on the Mexico Trade deal announcement…

Good Day… And a Marvelous Monday to you! Well, we had the opportunity last night to put the finishing touches on the Stanley Cup Finals… But it was not to be… I say it’s not the end of the world, as the Blues are a very good road team, and that’s where Game 7 will be played… On the road! Let’s Go Blues! Game 7’s are special, to people like me… The true Championship team rises to the hype and pressure of a Game 7… It’s the last game of the year, no matter what, so winter takes all… Let’s Go Blues! I’m sad that they didn’t put the series to bed last night, but what the heck, it’s not like the Bruins were going to roll over and give us the game! Ok, we’ve got a lot to talk about today, so…. Loggins and Messina greet me this morning with a live 20 minutes version of their song: Vahevala…

There are a few things to talk about today, so let’s get to them! First of all, the Jobs Jamboree on Friday was very disappointing… Second of all, The U.S. averted a Trade War with Mexico when negotiators agreed on a pact… And Third of all We need to talk about the European Central Bank (ECB ) meeting last Thursday.. Those and more will be our topics today, so go get that refill of coffee, and meet me back here in 5!

Well… The Jobs Jamboree was a real bummer for the flag bearers of a strong economy… Instead of gaining 185,000 jobs as forecast, the U.S. only added 75,000 jobs in May… And that was net of 204,000 jobs added by the BLS after the surveys… So, in Chuck’s eye… The economy lost jobs in May by 129,000 jobs… Stranger things have happened, as the Unemployment Rate remained at a record level of 3.6%… The currency traders weren’t buying it as just a one and done month, for disappointing job creation here in the U.S. And the dollar bugs were sent to the woodshed for the rest of the day.

And let it not be said that I forgot about the revisions… The Labor Department also revised down March’s gain from 189,000 to 153,000 jobs, and April’s from 263,000 to 224,000 jobs…

That’s a pretty big revision isn’t it from 263,000 down to 224,000? Well, it is my book! But I don’t think the currency traders were looking at the revisions, just the current numbers, which, like I said were disappointing!

So, before we go any further… The currencies and metals all rallied on Friday… The euro reached a 2 1/2 month high, and Gold was ready to take out the maginot line of $1,350… But then something happened to turn the dollar around…

Well, well, well… Finally, they listened to me! Negotiations worked when dealing with Mexico, and the Trade War that was about to begin was called off, and the negotiators were able to iron out what they wanted from Mexico… I’ve said all along that trade talks and negotiations are far better than Trade Wars… Now, if we can only get something ironed out with China before both economies are brought to their knees… And just the news that the Trade War with Mexico was averted, caused a lot of profit taking in Gold, and pushed the price back down in the overnight markets last night…

The euro is at 1.13, and has backed away from its 2 1/2 month high, as first it was the dollar moving higher on the Mexico deal, but then, even though the European Central Bank (ECB) last week, talked about keeping rates unchanged to mid-2020, two countries were out talking about how they knew that a rate cut was in the cards, and that pushed the euro down…

Last week I left you with the news that the European Central Bank (ECB) were meeting, and I expected dovish Draghi at the meeting… And that’s what we got… Here’s some news that should have sunk the euro’s battleship on Friday, but with the dollar getting taking to the woodshed, the euro benefitted, like I’ve always told you it would no matter if the economic data from the Eurozone isn’t up to snuff… OK, here’s the info of what’s going on in the Eurozone… German industrial production plunged the most in almost four years in April and that’s where Dovish Draghi stepped in with his assessment of the outlook, highlighting an ongoing slump in Europe’s largest economy.

While the Europeans aren’t in the Trade War club just yet… German factories are seeing a slowdown, as trade tensions, weaker car sales and cooling global demand weigh on exports.

Gold is getting whacked in the overnight and early trading today, and is down $15 from Friday at this point… I thought some words from the Gold man, Egon Von Greyerz would be calming right now, so let’s listen to what Egon has to say… “Gold, already has broken out in many currencies and its breakout in U.S. dollar terms is coming.” (I got that from the GATA folks)

The U.S. Data Cupboard last Friday, had another print other than the Jobs Jamboree, and it was Consumer Credit (read debt), which showed that in April the deficit spending by Consumers jumped to $17.5 Billion, after March’s number had slid to $11 Billion… So, a HUGE increase of Consumer Debt in April… This is how it’s got to go for most consumers… They don’t have the disposable income to spend so they go further into debt…

I really cringe when I read stuff like I did this weekend, that 80% of Americans live on paycheck to paycheck… The writer went on to point out that it’s not the money they spend on iPhones, or whatever, it’s big ticket items, that have piled up and backed up and now are a HUGE monster that stares at the Consumer each month when the bills come in…

This can’t be good for an economy, because… eventually the credit agencies will say “No mas”, and then what happens? No more buying and the economy goes to hell in a handbasket… I’m just saying folks…

To Recap… the Jobs Jamboree last Friday was a disaster, and sent the dollar to the woodshed, only to see it escape, later in the day after it was announced that a deal had been done with Mexico to avert the Tariffs… And at that point, the boys and girls in the markets had just about closed shop for the week, but handed things over to their Asian and European desks, who saw to it that the dollar rebounded… Gold has lost $15 since Friday, and so on… The Blues lost game 6, and now have to play a Game 7 in Boston. UGH!

Before we head to the Big Finish… I have a link to share with you, if you care to click on it, you’ll find an 11-year old young girl singing the national anthem at a minor league ballpark… The young girl is my darling granddaughter, Delaney Grace… I only do this because there were some readers that requested I do this… So, here’s the link: https://youtu.be/yZIX0PEX58Q

I can’t explain to you just how proud I am of her… Oh, and that cute baseball/ stars dress was made for her by her grandmother…

For What It’s worth… Ok, since last Friday the Jobs Jamboree was so disappointing, I thought this article was a good fit for our FWIW section today, as I pointed out how the BLS had adjusted the number of jobs in May, this report shows the BLS hedonic adjustments each month and it can be found here: https://www.zerohedge.com/news/2019-06-06/examining-discrepancy-between-jobs-and-employment

Or, here’s your snippet: “In the past year, the BLS says the number of jobs rose by 2.62 million. Employment rose by 1.429 million.

The discrepancy between the increase in jobs and the increase in employment is 1,191,000. On average, over the past year, that’s a discrepancy of 99,250 every month, in favor of jobs.
Numbers in Perspective

In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.

If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force. Searching want-ads or looking online for jobs does not count. You need to submit a resume or talk to a prospective employer or agency.

In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.

In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.

These distortions and discrepancies artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.”

Chuck Again… Like I sing all the time, the words of the Joe South song… The games people play , every night and every day , never meaning what they say, never saying what they mean…

Currencies today 6/10/19 American Style: A$.6961, kiwi .6615, C$ .7533, euro 1.1300, Sterling 1.3660, Swiss $.9913, European Style: rand 14.8723, krone 8.6527, SEK 9.4193, forint 283.24, zloty 3.7724, koruna 22.6705, RUB 64.78, yen 108.67, sing 1.3673, HKD 7.8428, INR 69.53, China 6.9088, peso 19.26, BRL 3.8788, Dollar Index 96.90, Oil $54.24, 10-year 2.14%, Silver $14.73, Platinum $798.37, Palladium $1354.29, and Gold… $1,325.93

That’s it for today… A crazy weekend here for sure, and a lot of deeply disappointed hockey fans for sure! The Cardinals played a game last night that no one in St. louis watched! HA! They got swept this weekend by the Cubs. UGH! Strange team this year for sure… I got to go to the day game last Thursday and brought home a winner… Fun day! It looks like it will be a beautiful day here, so I’ve got to get outside and enjoy it! I ask that you all add my good friend, Dennis Miller, to your prayer list, as he’s having a difficult time with his cancer treatment… The band Spirit takes us to the finish line today with their song: Nature’s Way… I always get the chills when this song plays, as it was Nature’s Way of telling me something was wrong back in 2007… I hope you have a Marvelous Monday, and will Be Good To Yourself!

Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts