Disastrous May Employment Report Sends Stock Futures Plunging

http://www.bls.gov/news.release/empsit.nr0.htm

Though an increase of 431,000 jobs in May might seem like good news on the surface, May’s employment report was disastrous and sent stock futures plunging, S&P futures almost instantaneously falling from down about 2 points to over 20 points down.  Why?  The consensus among forecasters was that 540,000 jobs would be added, with about 425,000 being temporary census workers, leaving a growth in private sector employment of over 100,000.

That’s not what happened.  Almost all of the job growth was census workers.  Private sector employment grew only 41,000.  And if you look into the details, the news is even worse.  The total employment level actually fell by 35,000 workers.  (See column “E” in the following spreadsheet.)  The administration had to fall back on the excuse that people dropped out of the labor force in order to show a decline in unemployment.  Here’s the calculation, followed by charts:

Unemployment Calculation     Unemployment Chart     Labor Force & Employment Level     Unemployed Americans

What’s disastrous about this report is that, following some job growth in the early part of the year, all indications are that growth has stalled and may actually be headed back into decline.  Weekly jobless claims have held steady at unacceptably high levels.  Other private measures of employment, job growth and layoffs show that the labor market is stalled.  Continued economic recovery hinges on job growth, and now a double-dip recession looks more likely.

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23 Responses to Disastrous May Employment Report Sends Stock Futures Plunging

  1. Mark Hall says:

    If our administration and government NEEDED a wake up call, THIS IS IT!!!!!!

    As evidenced here, we might still be on track to become the “Undisputed World Champion” for the country with the highest unemployment.

    I’m getting confused. IS THAT OUR GOAL?

  2. Mark Hall says:

    There is one word to describe what is happening.

    CLUELESS!!!!!!

  3. hungry4food says:

    Here is the Way to ” FIX ” the Economy … with Tax Cuts And put a 10 year Cap on all Price Increases on all goods and services , and any Imports coming into the USA that have price increases will be countered with tariff duty that will revalue the cost down to the 10 Year price freeze on all goods and services until we can pay down the deficits .

    here is a product of to much Government …

    Six Reasons Why the Capital Gains Tax Should Be Abolished …

    The Flat Tax: How it Works and Why it is Good for America …

    • Pete Murphy says:

      Hungry, all of these videos come from the Cato Institute, a “think tank” that thinks exactly what its multi-national corporate sponsors pays it to think. The whole purpose of the Cato Institute is to divert as much money as possible from the economy into the corporate coffers.

      With that said, regarding the first link, part of their strategy has always been class warfare. They want smaller government with poorly paid employees because it frees up more money to be spent on their products. They’ll get nowhere telling us that directly, so the strategy is to make everyone jealous of government employees. The fact is that, as long as our population continues to grow, we need an ever-larger government to maintain an orderly society. And the problem is not that any average American (like government employees) makes too much money, but that some of us make too little. Average pay and benefits of government employees compared to the private sector is rising because the private sector has been ravished by outsourcing and trade policy that has ruined our manufacturing base. The Cato Institute wants to divert our attention away from that and toward blaming each other – whether its private sector employees vs. government employees or the poor vs. the rich. They want us to forget that their corporate sponsors are making a killing on all of us through the trade policy that they’ve bought and paid for.

      The flat tax is another example. The federal government needs a certain amount of revenue to operate, and tinkering with the collection mechanism isn’t going to change the amount they have to skim off the economy to function. They want us to forget that and believe that the wealthy and corporations pay lower taxes than middle class and poor Americans. The fact is that the vast majority of federal income tax revenue comes from the top few percent of wage earners and corporations, while most people enjoy lower taxes as a result. I noticed that the tax form presented in the video had a flat tax rate of 17%. That rate would represent a sizable increase in taxes for me and an enormous reduction in taxes for the wealthy. The fact is that a flat tax would shift a lot of the tax burden away from the wealthy (but especially away from corporations) onto the middle class and the poor.

      The problem with our economy is not how we’re taxed, although I personally advocate the use of tax policy to influence our birth rate. Although I admit I don’t know what the tax policy in China is, since they are a communist country I suspect that the Chinese pay a lot more in taxes than we do, and they currently have the most vibrant economy in the world. The reason is trade policy. They, like other densely populated nations, use it to their advantage and to our disadvantage. We have a problem with unemployment not because of the way our taxes are collected but because our trade policy has allowed China, Japan, Germany and a host of others to siphon jobs away from the U.S.

      I encourage you to investigate the source of funding of any of these “think tanks.” It’ll tell you a lot about why they think the way they do and who stands to benefit from the policies they promote.

  4. hungry4food says:

    This is Interesting reading ….

    http://www.losthorizons.com/Newsletter/TakeTheRedPill.htm

    http://www.losthorizons.com/NewsletterFeaturePage.htm

    [video src="http://www.losthorizons.com/Newsletter/IRSMonstersMeetCtCSunlight.wmv" /]

  5. MikeF says:

    Hungry,

    While your intentions may be good, you fail to understand the the interworkings of a debt based growth capitalism society. Price caps have always failed to achieve their intended results as they are in direct mathematical conflict with our compounding interest based monetary system.

    The U.S. entered a negative feedback condition in relationship to employment nearly three years ago. Negative feedbacks are extremely difficult to reverse. The stimulus was designed to halt the negative cycle, but failed to work. That is why such economists as Paul Krugman suggest another round of stimulus is necessary to stop this destructive cycle. My personal opinion is that this cycle will run all the way to the ground as only NEW and MASSIVE jobs can turn it around.

    • Andy says:

      http://en.wikipedia.org/wiki/German_model

      “Rather than simply issuing loans, most German banks have large interests in the commercial sector. As such, many corporate boards offer seats to high-ranking German banking officials, whose banks are often investors in the corporation. As a result, they seek to promote long-term investment in the overall health of the companies they are working with.”

      And yet Germany keeps losing manufacturing jobs too. Is manufacturing a dry well?

      • hungry4food says:

        as long as the WTO does not hold China accountable for not allowing their currency to float freely like they should have done over the past 15 years of the Free Trade agreement we have been locked into thats lead us to lose all our jobs because as China kept their currency values at 10-15 cents to the dollar it created the giant sucking sound that Ross Perot said would happen if we did the trade agreement the way it was designed in 1994 .
        Independent studies said this would happen .

        With all the manufacturing that has relocated to China from Europe and the USA Chinas currency should have floated freely upwards to par the dollar by now . When Tariff Trade is not part of the negotiating process of trade with different valued currencies trading in the same markets , and these currencies not valued off any durable substance of value like raw materials and whose currency values are based off raw material world markets values that would supply the means to manufacture needs then Greshams law is the result , the lower currency drives the higher down in value , and if nothing is done to alter this progression that currency eventually winds up deficit pour and goes into default .

        Its all explained here ; The High Cost of the China-WTO Deal: Administration’s own analysis suggests spiraling deficits, job losses
        By Robert E. Scott,
        February 1, 2000
        http://www.epi.org/publications/entry/issuebriefs_ib137/

      • Pete Murphy says:

        No, it’s not a dry well. The problem is that “free” trade, promoted by the WTO as a means for lifting undeveloped nations out of poverty, is spreading the work of manufacturing to more and more overpopulated nations where per capita consumption is emaciated by over-crowding, thus adding laborers to the manufacturing work force without adding proportional consumption. The result is rising unemployment everywhere.

  6. hungry4food says:

  7. ClydeB says:

    Hungry,

    You should really read Pete’s book,
    Five Short Blasts.

    In it, Pete explains the REAL situation with facts, charts and valid resesrch.

    This claimed currency valution problem is nothing but a smokescreen.

  8. MikeF says:

    Hungry,

    Your contention that all currency bases are equal and that China could suddenly be on par with the dollar has no substantive foundation whatsoever. If it were possible (which it isn’t) we would experience hyper-inflation over night. Be very careful what you wish for.

  9. hungry4food says:

    I really don’t think we all see what is really going on in the world of finite resources and the policy makers that are changing the way we are going to use them in the future .
    http://www.marketskeptics.com/2010/04/time-water-running-out-for-americas.html
    http://ngm.nationalgeographic.com/2010/04/table-of-contents

    http://www.notcot.com/archives/2010/03/water_our_thirsty_world.php

    http://news.nationalgeographic.com/news/2010/05/100505-fossil-water-radioactive-science-environment/

    http://www.aolnews.com/earth-day/article/time-water-running-out-for-ogallala-americas-biggest-aquifer/19446923

    This changes everything in the very near future , and with it how we are going to be allowed to economically function as societies . Hang on its going to get interesting …..

  10. hungry4food says:

    President Obama’s Advisory Czars are Leading policies that want Government controlled Resource Usage for the idea of Sustainable eco and population foot print reasons that do not make sense as to why Government should be in control over how a economy expands and creates wealth for societies in the world . Capitalism is Showing a Great effect on Sustainable World and Population Development , so Capitalism and Tax Cuts should be a part of the Road to Economic Recovery .

    http://www.google.com/publicdata?ds=wb-wdi&met=sp_dyn_tfrt_in&tdim=true&dl=en&hl=en&q=world+total+fertility+rate#met=sp_dyn_tfrt_in&idim=country:RUS:ZWE&tdim=true

    https://www.cia.gov/library/publications/the-world-factbook/rankorder/2127rank.html

    The Liberals do not have the will to drive economic growth with capital expansion tax policies that expand Resource Supply because of their fear of the carrying capacity of earth’s ability to sustain population growth into the future . This needs to be brought out into the Light and Debated before the world , because this is what President Obama means when he criticizes the Republicans tax cut concepts as ” Old Tired Ideas ” . But they are wrong , because Government stimulus is not capital Formation that can lead to a Tax Revenue stream , only more Government Debt , like a cancer it just spreads taking from some and giving it to others defeating incentive and therefore any capital formation . The way Capital is passed through society can be by way of a collective means or one that promotes a process of desire to innovate for the sake of a chance to prosper , both can suffer from Greed throughout the trickle down system whether it be from Government or the private sector , and this is where we get distracted through political process the very fact that all we need to do is make sure to Regulate the Trickle down process . If this would have been done , and it still isn’t today , we would have not had such a build up of debts in the private sector thats now spilling over into the public .
    But at a time of such weak economic function the last thing we need to do is perform a vasectomy on the little bit of economic profitability that will only put more money into the hands of those in Washington that are continuing to spread wealth only to their voting blocks of very special interests , so the less they have the better !!!

    Today’s corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market.
    http://online.wsj.com/article/SB10001424052748704113504575264513748386610.html

  11. ClydeB says:

    Hungry,

    MikeF has long contended that oil depletion will be at the center of our economic downfall. Most if not all our natural resources are being depleted at an alarming rate. I agree that the lack of clean water may actually be of greater concern for humanity as a whole than is oil. Both of these concerns are directly linked to the excess population that Pete repeatedly cites in his research.

  12. MikeF says:

    For a sobering read on our water crises, read Robert Glennon’s book, “Unquenchable.” Glennon is an excellent writer who presents the technical issues of a nation running out of water in a very readable format.

    I always pays to remember that a human can only live three days without water.

  13. ClydeB says:

    Hungry,

    Borlaug has actually compounded the problem, not provided a solution. His efforts have led to the assumption that the growing world population is actually sustainable which encourages additional growth. Making an incrimental increase in the available food supply improves the situation for the current recipients, but snce it is not an exponential growth of food it falls far short of the growing demand made by an exponentially growing population.
    The sooner we acknowledge the problem and take drastic measures, the better we will be able to deal with it.

    • Pete Murphy says:

      And, let’s not forget that, even if resource supplies could be grown (or stretched) exponentially, there’s still the matter of over-crowding driving down per capita consumption and thus driving up unemployment and poverty. Regardless of whether you’re looking at the finiteness of resources or the economic effects upon per capita consumption and unemployment, it only makes sense to begin reining in population growth, stabilizing it at a sustainable level.

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