The King Report
M. Ramsey King Securities, Inc.
Monday October 8, 2007 – Issue 3727 "Independent View of the News"
Bush proclaimed that the US economy is vibrant – because the BLS manufactured an inordinate amountof teaching and government jobs for September and in revisions of July and August.
In other words, the US is a vibrant economy with low inflation because of government edict.
The September Employment Report should remove any doubt that US government economic statistics, notably PPI, CPI and employment, are worthless, politically-inspired propaganda. They serve to advance political, Fed and Street agendas and provide ‘bread & circuses’ for traders, AKA the new economy.
Last month, the Fed and solons needed a soft Employment Report to justify the Fed dual rate cuts. If the economy didn’t appear to be in dire straights, the Fed’s actions looked like a blatant Street bailout. We postulated in our Friday report that a better-than-expected employment report was likely because over the past few months, important economic data suspiciously has been market friendly.
Last month, not only was the August Employment Report negative, there were downward revisions.
This month, with the dollar in the toilet, gold and food commodities soaring and fear of recession increasing, the powers that be needed a ‘good’ Employment Report. So 110,000 NFP appeared in September and the August Employment Report was revised from -4,000 NFP to +89,000.
This month, the September Employment Report is not only better than consensus – and much stronger than traders expected – there is a big upward revision for August. Somehow the BLS discovered that it missed 70,000 government jobs in August. What are the odds of that?
The BLS calculates that ‘government’ created 107,000 jobs for August to September. Riiiiight!
July was revised 25,000 jobs higher to 93,000 because the BLS ‘found’ an additional 28,000 government jobs. ‘Government’ job growth accounts for most of the upward July & August NFP revisions.
You know how that collapse in the dollar is helping US manufacturers? In September the US lost 33,000 ‘goods producing’ jobs but added 143,000 service jobs. Education & healthcare increased by 44,000.
Leisure & Hospitality increased 35,000 and government created 37,000 jobs. Retail jobs fell 5,200.
The US has lost 233,000 ‘goods producing’ jobs this year. When will the dollar collapse start helping? 20,000 temporary workers lost their jobs. ‘Temp’ employment is usually the best indicator of economic and employment strength. Companies like ‘temps’ because they don’t receive healthcare and pensions.
The WSJ: One wild card is the way the government counts teacher jobs. The August report registered a loss of 32,000 public-school teaching jobs, which came on top of 50,000 lost teaching jobs in July.
online.wsj.com
1.html?mod=todays_us_money_and_investing
The BLS: Over the year, health care added 396,000 jobs. Employment in social assistance increased by 12,000 in September and by 98,000 over the year… Employment in food services and drinking places increased by 25,000 in September. This industry has added 355,000 jobs over the year...
Manufacturing employment decreased by 18,000 in September. Over the year, manufacturing lost 223,000 jobs. In construction, residential specialty trade contractors shed 15,000 jobs over the month and 160,000 since February 2006.
bls.gov
Average hourly earnings were up 0.4%, lifting the year-on-year change from 3.9% to 4.1%. The average workweek was unchanged at 33.8.
Unfathomably, with the upward revision of July & August the BLS announced that the next benchmark revision will show that March 2007 payrolls were overstated by roughly 297,000 jobs.
Please take a minute and think about the absurdity of suddenly producing better than expected NFP growth with upward revisions of the past few months and at the same time admitting that prior NFP growth was overstated by 297,000!!!!
John Williams: "These data from the BLS are nearly worthless as economic indicators and are highly suspect, given the global financial markets in ongoing crisis and given the positive ratings of U.S.
President and Congress hitting historic nadirs. The reported numbers continue to run counter to betterquality employment indicators such as new claims for unemployment and the collapsing help-wanted advertising index."
Pundits and the media say there will be no recession because of the employment report. The BLS manufactures job growth now and in past months, and people that are supposed to be educated and critical thinkers swallow the crap that the economy is okay because of government edict.
The DJTA rallied to the moon on Friday on government edict that the economy is fine, even though transport companies keep reporting declining business and issue dire forecasts. It’s 1984!!!!
As the conditions and times worsen solons get more desperate, so the mendacity increases.
An insightful money manager tells us: "S&P earnings growth estimates for Q307 are somewhere between 2-4%, the lowest in 5 yrs. Wonder how they look ex energy and agriculture and base commodities (INFLATION beneficiaries)? Remember last year EPS was growing in the 15%+ range at times. Now it’s really decelerating and barely growing - that is because companies are at peak margins, and there is less growth and more inflation, regardless of what the bad gov’t data indicate. And that should not be a recipe for multiple expansion."
Reasonable people and non-Street shills knew the unholy mix of derivatives, subprime and crappy paper was a scam that created phony profits and was a toxic bomb waiting to explode on the greedy and unsuspecting. Now, the Fed’s latest bailout is creating more bubbles that will burst and discharge toxicity. Like the derivative and crappy paper mess, it’s inevitable and is only a question of timing…
-END-
Bill King is dead-on. The manipulation of US market statistics and blatant market management is completely out of control. What continues to be remarkable is the lack of scrutiny of all of this. It’s one big see, hear and speak NO EVIL when it comes to the new Orwellian way the US operates. Downright scary if you ask me. Free US financial markets, along with our press, are quietly going the way of the Dodo bird. What’s next? |
