Reports Blur The Employment Picture In US Economy

Economic Pictured Blurred

Another jobs report and yet another bit of data in which to put a positive spin on. Whether the number is higher or lower than estimates reporters by the droves like to point out how positive the data. At least they make sure to add a positive spin in the title of their articles. But even they are forced in the body or end of the articles to point out the obvious, the data isn't as good as it seems.

Regardless of how many times predictions have been made that the sustained 200K per month job creation is right around the corner, five years in we still do not have it. While the criticisms of the supposed "doomsayers" are dismissed by saying that even a broken clock is right once a day, they can't see themselves in the same light. Even the latest report was only greater than expectations because the expectation had been revised down from 220,000. So when the data comes out at 195,000 and that exceeds the lowered 156,00 data did it really beat the forecast? I would say not, but very few pointed out that the original expectation was the 220,000. The revisions down from previous months are rarely reported but the revisions up are used to support their notion that things are getting better. 

Deep in the data is where the real gloom of the reports lie. There are two reoccurring points in the data that are usually glossed over that symbolize this recovery. They also underpin the argument that this recovery if far from over and the longer this goes on, the worse we fall behind. The first is that 1.6 million of the 3 million of the jobs created since the recession ended (2009) have been in part time workers. We are also creating temporary workers at a rate that exceeds more permanent jobs at many multiples. Not exactly the sign of a jobs resurgence. The vast majority of all these jobs are being created in the service sector, which as many know doesn't even meet the medium household income of the US.

The second and equally important part that is overlooked is that the biggest attributable portion in the drop of the unemployment rate. Millions of people have left the workforce completely, either through retirement or disability causing other financial stresses on the system. Leaving the total workforce participation rate at its lowest levels since the 1970's. The consequences of this should not be overlooked, we have many less people working and paying taxes to pay for the ever growing number of people receiving benefits. The burden that falls to the remaining people to make up the deficit is astounding. Which is why we should expect large budget deficits into the 2020's if not as far as the eye can see.

The endless parade of people willing to overlook these very important pieces will go one for a while. My guess will be at least till a republican becomes president. Then we will be treated to a negative spin on all the data like when the younger George Bush was in the white house and the early 2000's recovery was called a jobless recovery. Wouldn't we like to get those jobless results today, where total employment went up and full time workers made up the greatest part of the work found.

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China Bashing Continues, Mirrors Missing In the West

Is China A Threat?

I have been listening to podcast almost everyday for six to seven years, much of it on Bloomberg since they put out a huge volume. Like others who are interested in world affairs i follow blogs and read news articles on major site. Over the years this trumpet keeps sounding "China is a threat in...." There have been many different fill in the blank topics to be sure and just about all are hypocritical  from a geopolitical stand point. Now I will agree that if you want to create fear, anger, and embed a stereotype of the Chinese government than it serves this purpose very well. Though I believe it is a horrible message to send to the average American let alone the Chinese whom we work with on many levels and need to cooperate with to bring stability in the world.

When talking about the military I understand the angst but we still spend more than double the percentage of our GDP than they do 4.4% to 2%. In all these years of talk of the threat of China they haven't waged war on anyone, but yet we have. What leads us to believe they will? Is the mere fact that they are spending more mean they will? Than we too are guilty of that in spades, and have more of a history of entering into wars with little justification other than it's in our national interest to do so. The better answer, and one we espouse ourselves is self defense. Not just from invaders coming in but also from a self reliance standpoint. Each country would like to maintain a certain level of their military needs being provided by domestic suppliers. To use a crazy example, if we relied on the North Korean's for one of most used missiles what would happen when we entered a war they didn't agree with? They could simply cut us off, that is the primary driving factor of the Chinese build up of their defense infrastructure. As a developing economy they have relied on the technology and manufacturing of others to provide for their defense. Many countries operate in this way and we are the exact same.

In the economic sphere China has become a frequent topic of discussion. Almost never does a day go by that at least one guest is brought on to discuss the threat of china in A,B, or C. realm. I have been hearing this for years. It seems to me that if a country does to well we want to bash them, as if we are the royalty of old deemed by god to be the leader of everything. A funny criticism I heard today on Bloomberg to a guest was that the government was in everything and it doesn't seem like there is a level playing field. Are you kidding me? What government in the world interferes more than the US? Answer is none. The sheer size and position we have dictates that we can more than anyone, and by god we do. The industries the government and the federal reserve subsidize is too numerous to mention. It is done directly and indirectly. They use influence and law to shape a large percentage of the economy as well. How can that be a negative against China but not ourselves? A large portion of our economic recovery is based simply on the federal reserve money printing, but if Chinese central bank does the same it somehow interferes with world commerce?

I remember a number of years ago during the Clinton era for a period of time a much used term to describe how we could maintain our influence was to be "An Honest Broker". To have our actions align with our talk. That in order to have some standing in negotiations you should be speaking on principles you actually follow to be credible. It seems to me we have abandoned that principle and taken the stance do as I say not as I do. The funny thing is in some cases I agree with the talking points. The Chinese should be doing some of the things we urge them to do, they would be better off for it. But then again so should we. We may have shipped off the production of mirrors to China but no one in the government seems to see the flaws that would be glaring back at them if they did.

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