Hello traders everywhere! Jeremy Lutz here with your mid-day market update for Friday, the 7th of December.
The U.S. added more jobs in November, sending stock index futures up in pre-market trading immediately after the report was released. The main numbers from the jobs report were encouraging, but the underlying report was mixed. The Labor Department said the U.S. added 146,000 jobs last month. The unemployment rate fell to 7.7 percent from 7.9 percent, the lowest since December 2008.
The unemployment rate fell largely because discouraged unemployed workers stopped looking for work, and weren't counted among the unemployed. Also, the Labor Department revised previously released jobs numbers downward, saying that employers added 49,000 fewer jobs in October and September than initially estimated. However, missing from the report is the effect that Hurricane Sandy has had on the job market in the northeast. We likely won't see that included in the report until February.
The market is also under the cloud of other challenges, notably the "fiscal cliff" drama in Washington. Congress and the White House are trying to hammer out an agreement on government spending and tax rates before Jan. 1. If they don't, government spending cuts and higher taxes will kick in. It doesn't help that House Speaker, John Boehner, said Friday that there has been no progress in negotiations to avert the "fiscal cliff" and called on President Barack Obama to produce a new offer.
Let's see what the Trade Triangles say about the markets today.
Have a great weekend,
Jeremy Lutz
73% of New Jobs Created in Last 5 Months Are in Government
By Terence P. Jeffrey
December 7, 2012
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Labor Secretary Hilda Solis (Dept. of Labor photo)
(CNSNews.com) - Seventy-three percent of the new civilian jobs created in the United States over the last five months are in government, according to official data published by the Bureau of Labor Statistics.
In June, a total of 142,415,000 people were employed in the U.S, according to the BLS, including 19,938,000 who were employed by federal, state and local governments.
By November, according to data BLS released today, the total number of people employed had climbed to143,262,000, an overall increase of 847,000 in the six months since June.
In the same five-month period since June, the number of people employed by government increased by 621,000 to 20,559,000. These 621,000 new government jobs created in the last five months equal 73.3 percent of the 847,000 new jobs created overall.
The unemployment number? It's not a real number. Think about it. Why not the employed versus the population as an indicator? The math really doesn't seem that hard or doesn't anybody remit payroll taxes or collect deductions anymore? (Even illegals are estimated regularly.) Gee I wonder who brought us here? But hey - what a great source of volatility.
Interesting how thing are getting more difficult to ferret out. I use the US national debt clock-real time, to track the numbers because there is so much disinformation out there. The U-3 and U-6 employment numbers are there. Use your search engine to access the info and mouse over the numbers to see more details. My point however is that with our mandated national health care, employers (especially retail) are cutting back big time on weekly work hours per employee to avoid paying mandatory health care for each person. I forget whether the break point is 29 or 39 hours per week. I suspect there will be many U-3 category employees falling into the U-6 (unemployed or partially employed) category unless the Congressional Budget Office gets mandated to recharacterize this information.
This is getting really sacry especially with the derivatives time bomb numbers out there.
The President continues to tell us that the majority of people who voted for him voted for a federal income tax increase on the wealthy. That is correct but 60% to 70% of his votes came from people who do not pay any federal tax so why wouldn't they vote that way.
Kevin, You ask good questions.
Im not too swift on any of this stuff but I do understand that at 222 Trill (including off budget) in debt is already a bottomless pit. Logic therefore negates a fiscal cliff. I have this strange feeling that cut 250K as law and into the IRS tables and it becomes quite easy to justify a step down in the tables to 200K then 150K and down to 100K and down to 5K and then listen to all the lobsters squeal (including you and me) when they boil along the way. They wouldn't do that would they? An old saying comes into play. Fool me once shame on you; fool me twice shame on me.
MSM needs to stop dignifying "fiscal cliff" hooey. The phrase contains reverse alliteration making it catchier than it should be.
Sequestration's tax and spending changes would cut the federal deficit by $503 billion through next September and the economy by 0.5 percent next year, said a CBO report. Whatever economic fallout would occur from this comes over time, long enough to implement a better plan, or vote out those blocking it.
Economics Nobel Laureate Paul Krugman has already told us "How to End This Depression", http://bit.ly/IZ3rhb - in the same manner Truman and Ike dug us out after WWII. Tax the rich and invest in national infrastructure, creating many new jobs along the way.
Tax rates need not even be increased. Just remove the Social Security income cap, and require those with income over $250k to file twice: normally up to $250k, then again for everything over $250k with no deductions, exemptions, or special treatment for investment income.
I knew you were going off of the deep end when you quoted Paul Krugman as a reference. Is he not the same person who wanted the U.S. to spend Trillions more to move the economy? With 16 Trillion in debt and counting I have a solution! Lets just dig a bigger, deeper hole so we can bury the 16 trillion in it and counting and it won't look like much. That's the game that is being played. Most American people are too stupid to realize what is happening and when they do its going to be pure panic when the dupes wake up and find out whats been going on.
Truman dug us out with a 92% tax on income>$350k (recent $$) and deficit spending >100% of GDP(!) Key is what he spent it on: roads, dams, power, health, education, science, infrastructure... Ike scaled back some but essentially continued the same policies; the rest is history. Contrary to current GOP cant, good and active governance exists. What's stupid is believing the cant it doesn't. Here's some enlightenment, if it doesn't go too fast for you: UNDERSTANDING THE FISCAL CLIFF (in 2m 30s)
http://www.youtube.com/watch?v=gMuA8I2M5l0
Excellent points, but actually other than a slight bump under Jimmy Carter, the last Democrat to increase the national deficit as a percentage of GDP was FDR during WWII, and if you ignore 1942-1945, FDR was on track for a small decrease in Debt/GDP from the Hoover years. Deficit went down, albeit from a very large peak under Truman and then went back up again under Ike.
This is debt, not deficit, but you can see the effects here:
http://zfacts.com/p/318.html