The August 8, 2016 Equity Management Academy Economic Report paints a bleak picture of an US economy, despite rosy employment figures, “accelerating to the downside.”
The Report argued that the job numbers out last week are “a propaganda piece to bring the unemployment numbers down right before the election.” The Report said, “They’re using this time period to make it appear that the economy is improving using these manipulated numbers.”
The rosy jobs picture, however, is false. The Report said that when we look at other countries, “they are struggling.” Canada lost 31,200 jobs in July and the number of full-time jobs fell dramatically. Economists in Canada thought they would create 10,000 jobs in July, but they didn’t. Full-time workers fell by 74,800, which was offset by 40,000 part-time jobs created among the prime working age group of 15 to 24. It is, the Report said, “Very difficult for these individuals to get good, full-time jobs.” The Report said similar trends are occurring throughout Europe, even as in the United States there is the “illusion that everything is fine.”
The jobs numbers stated that US payrolls increased 255,000 in July, which was above even the highest Wall Street forecast of about 158,000. The unemployment rate, however, didn’t change, nor did the participation rate. If you add it all together, the Report said, “We have over 100 million people who are looking for work who can’t find work. This is a problem.”
Even as the media trumpets the “good” jobs news, payroll data and other information is showing “anomalies in the job numbers.” Private payrolls only increased 85,000 in July compared with the 217,000 jobs the government said were added. The Report said, The government “massaged the numbers to bring it up to 217,000” by adding a seasonal adjustment factor “to make it look a lot better than it really is.” Unadjusted payrolls are showing something completely different from the government figures. A lot of jobs have been lost. In the energy industry, 195,000 good-paying jobs have been lost since 2014.
The jobs that were created are largely due to Obamacare, which has increased jobs in healthcare to offset weak industrial, construction, mining, and retail payrolls. Obamacare added 49,000 jobs, but more than half of the exchanges have collapsed and defaulted, which does not bode well for long-term growth.
Besides Obamacare, what sorts of jobs is the economy creating? Some 500,000 waiter and bartender jobs have been added since 2014, but no manufacturing jobs. “This data,” the Report argued, “underscores how the job recovery has been spearheaded by cheap labor,” and the “lowest educated, lowest paid” workers.
The economy shows how it is doing in many ways. Corporate tax receipts are down 11% year to date. Non-withheld tax receipts are down 6.5%. Many retail stores have closed, factory orders are down, and rail and trucking are declining. The Report said, the “housing bubble is losing air. It’s about to pop.”
The Report suggested we are going through a similar period as before the 2008 collapse before concluding, “We’re in big trouble here.”
Patrick MontesDeOca is a widely published technical analyst, author, commodity trader, trading coach and systems developer with expertise in algorithmic intelligence and the computer modeling of processes
