* It is the first Friday of the month, and that means that this morning we got the September Non-Farm Payroll number * Anyone who has listened to my podcasts and video blogs knows that for months I have criticized these so-called strong jobs reports * I think what's going on is a transformation of the economy from full-time jobs to part-time jobs and that necessitates creating more jobs that you destroy, but the real story is beneath the surface * The report we got today was one of the weakest reports relative to expectations than we've had in years * This may be the final missing piece to the economic puzzle that shows that the economy is not as strong as everybody, including the Fed pretends it to be * And that the rate hikes expected to be around the corner are a distant blur on the horizon * Soon more will join me in recognizing the more QE is coming * Of course QE is not medicine; it is toxic * Let's get down to the tale of the tape with the jobs numbers * First, the bigger number is the August number, which was expected to be revised up, was revised down to 136,000 jobs * July was also revised down * The September number was expected to be 203,000 and actually came in at 142,000 * This is an average of 163,000 jobs for the last 3 months * Six of the last 8 jobs numbers have been revised downward * The August labor force participation rate was 62.6, which was the lowest of the "recovery" * The September rate dropped another .2 to 62.4, which is the lowest since 1977 * Another 579,000 left the labor force in September - now there are 94.6 million Americans not working * Average hourly earnings, expected to rise .2, remained flat * In fact, the average work week declined from 34.6 to 34.5 * If you remember, what has Janet Yellen stated as a requirement for a Fed rate hike? - An improvement in the labor market. * The labor market was singled out as a reason why rates remained at zero in September * While others speculated that rates might hike in October or December, I said the labor market is not going to improve, so the Fed will not raise rates * Janet Yellen is looking at labor force participation, which has declined to a new low * Yellen is also looking for an improvement in wages - that is going the other way * If you also look at the details of this jobs report, you'll see that jobs created are low-paying jobs and jobs lost are higher-paying jobs * For example, we lost jobs in wholesale trade, manufacturing and logging - those are good-paying blue collar jobs * We gained jobs in leisure and hospitality, education and healthcare, retail trade - and a lot of these jobs are temporary or part time * This is why there is not real recovery, why people can't save or buy houses * This weak jobs number is another excuse for the Fed not to raise rates * Some are pointing to this jobs number as proof of the Fed's wisdom in not raising rates in September * However, Yellen stated that rates would go up if the economy continues to improve as the Fed expects - but the economy is getting worse * I've always said that the Fed does not want to raise rates because it does not want to look foolish if it has to back down from a rate hike * We got more economic data today: factory orders wer down 1.7% worse than the expected number of -1.3% * Also, last month's number was revised down, making this the tenth month in a row that factory orders have been down, year over year * This only happens in a recession * Maybe we are in a recession * We don't have Q3 GDP numbers yet, but yesterday the Atlanta Fed reduced its Q3 estimate to .9 * The consensus on Wall Street and at the Fed is still 2.5 * I think that given this jobs number,Our Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

Ask this episode

“What did the council decide on item 42?” — answered with the speaker and the moment.

Transcript

Related