Courtesy of Daniel Sckolnik, ETF Periscope
ETF Periscope: Will Good Earnings Trump the Sour Economy?
by Daniel Sckolnik of ETF Persicope
“It is a kind of spiritual snobbery that makes people think they can be happy without money.” – Albert Camus
The equity markets have been blustery for the last two weeks. That changed quickly on Friday, when the Bulls slowed their pace and shot a collective, quizzical look at the hard data that came out even before the market rang its opening bell.
Over the course of the last two weeks, the Dow Jones Industrial Average (DJIA) shot up over 700 points. The Dow seemed well on course to end the week even higher, potentially topping its 2011 high of 12,810. That would have required less than a 1% rise above Thursday’s close, not an uncommon move, particularly in light of today’s low volume, high volatility market. And, if the government’s Labor Department Report had been different, that high most certainly was in danger of being taken out.
If the Labor Department Report had been different.
That’s akin to saying “If Congress was functional, they’d actually get things done.” In other words, an extremely large and unruly “if.”
So, as is frequently the case, the economists once again got it wrong. The forecasts of numerous economists, who are, as a matter of course, polled prior to these sorts of data releases, indicated expectations of a rise of nonfarm payrolls in the range of 90,000 all the way up to 175,000. Instead, what we got was an anemic increase of only 18,000 jobs. You’d have to go all the way back to September to find a weaker reading than that.
As John Kenneth Galbraith famously said, “Economics is extremely useful as a form of employment for economists.” The problem is, there are not actually enough openings for economists to help offset the dwindling job prospects for the current 9.2% of the unemployed here in the U.S.
If that “official” number of 9.2% wasn’t bad enough, the government announced that there were actually 44,000 fewer jobs created over the course of April and May than previously stated.
Whoops.
These numbers are simply not indicative of a healthy national economy, especially when you take a closer look at some of the other data contained in the report. This included the fact that those classified as “underemployed” went up…
