Figures Don't Lie. But Then Again, Liars Will Figure.
So, I’m sitting here in front of my screen fooling around on Linkedin instead of paying the bills, when I see that Pulse has recommended a piece penned by some guy in the investment business, titled American’s Sour Mood on the Economy Doesn’t Square with the Fact.
I know this has been the chronic theme proffered by the professional shills appearing on your TV set morning, noon and night for some time now. I had been getting pretty good at ignoring them.
At first I was doing a pretty good job of ignoring this guy as well.
But finally ….. I succombed …..
So in order to rebut this guy, I start to pull together some updated versions of charts I have collected in the past, and in so doing, I stumble across a Quartz piece titled Seven Charts That Leave You No Choice But To Feel Optimistic About The US Economy, and just that quick …..
As almost always, clicking on the charts will link you up to the piece from which they were taken.
The Headline Unemployment Rate is hovering just above 6%.
The formula for calculating the rate of unemployment is as follows;
Unemployment Rate = Number of Unemployed / Total Labor Force.
Total Labor Force = Number of Employed People + Number of Unemployed People.
An unemployed person for purposes of the above calculation is defined by the Bureau of Labor Statisics as follows: a person who had no employment during the reference week, was available for work, except for temporary illness, and had made specific efforts to find employment some time during the 4 week-period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.
So, people are counted as unemployed for purposes of calculating the rate of unemployment only if they are in the labor force. And as such, unemployed workers who have quit seeking work are no longer counted for purposes of calculating the unemployment rate.
As you can see below, labor force participation is in decline, if not freefall.
"What do it mean?"
If you have quit looking for work in favor of going on disability, you no longer count in the calculation.
And the total number of them that have gone on disability is going nowhere but up.
People who have gone on disability are for the most part not looking for work and thus counted as part of the labor force.
Fewer people in the labor force means ..... lower unemployment for purposes of calculating the headline number.
A significant percentage of the improvement in the rate of unemployment is directly attributable to the increase in "disabled" Americans.
Maybe there are more people on disability because we now provide help to people with honest disabilities that we have overlooked or ignored before.
But it strikes me that there might be more to it than just that.
In case you were wondering how the unemployed are able to afford eating?
Nope, that's old news.
Food lines are passe' as they are very bad for the fiction that all is well with the economy.
Our modern food lines are much improved as they are far less obvious to the naked eye.
But wait a minute. What about all those jobs the Obama Administration has created?
I'm not impressed yet.
Mostly because ...
But why so few full time jobs and so many part time jobs?
To be crude about it, it's mostly because part time workers are cheaper, and sales suck.
But, there is some good news, car sales are back.
Car sales as reported in the press tend to be wholesale numbers.
Dealer inventories are also up dramatically.
GM isn’t alone when it comes to this issue, as unsold inventory abounds all over the world regardless of manufacturer.
Definitely click on the photo below for a pretty quick, little piece on automobile manufacturers channel stuffing their supply system.
Oh well, that’s good news for me as I have to buy a car for a boy soon.
I’m thinking there should be some good deals on cars this fall.
Anyway, stocks are on fire, business must be good.
Except, the balance sheet of the Federal Reserve Bank has expanded nearly dollar for dollar with the increased value of the S&P 500.
As has margin debt for NYSE member firms.
Well, it doesn’t take a rocket surgeon to figure this one out.
Corporate management is adding debt in order to buyback shares and in so doing are driving the surge in the stock market.
“But why would they do that?” You might well ask.
Management is compensated for increasing market cap rather than for running a profitable entity.
All you need to know about “Corporate America” in one chart.
Oh, and by the way, CEOs now earn on average, from 273 to 331 times the average worker’s pay depending on how you calculate stuff.
Form your own opinion.
I got mine.
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