Wednesday, October 12, 2011

Jobs report stinks just a little

The markets are up a little on the news that there was a fairly good monthly jobs report from the Department of Labor last Friday. But on closer examination, I think it just stinks a little. While the private sector did create 137,000 new jobs, which is almost good (remember, we need 200,000 per month to recover), manufacturing lost 13,000. While we did make some headway last spring, overall these past 12 months, the progress has not been goodLink at all. Recovery in total private sector jobs has been less than half of what is needed, and manufacturing is in about the same boat. So, while we are not being dragged into a second recession, we are not pulling out of this one either.

In addition, average hourly earnings has remained pretty stagnant also. While food and energy prices have gone up about 10% (very rough estimate) over the past 3 years (the reason they tell you there is no inflation is they measure your pay, not prices), wages have remained nearly the same. This means that even if you do have a job, things are not getting better.

As if all that is not enough, President Obama has proposed a half billion dollar "stimulus" plan that will likely act like throwing an anchor off the back of a boat. Sure the boat will move forwards from the stimulus caused by throwing the anchor, but then the anchor will be a drag for years to come.

The only good news about all this stagnant economic stuff (that is, if you have a steady job) is that gas prices won't be rising much in the next few months.

Meanwhile, copper, which I use as a forecaster of where manufacturing is going, has lost about 20% of its value. This is a bad thing. Since manufacturing is a large user of copper, it means manufacturing is slowing down. No matter what the ISM index says, if copper use is down, manufacturing is, or will be, slowing down. At least that is what happened in the past. It isn't that I have a crystal ball, but I have seen this before.

Some people have been saying the price of silver crashed but really all it did was lose some gains it made this past couple of years that were completely out of line with how much silver should cost. It is still over priced, if you ask me, but then again, I have said gold was over priced for five out of the last five years.

A predicted shortage of cotton has failed to materialize at this time, so goods made with cotton will remain economical for the next several months.

Other good news is, as I mentioned a couple of weeks ago, the anticipated worldwide famine will not develop. Not because food production is all that much better, but because it turns out that the quantity of food wasted in more affluent countries is just simply colossal, and that can absorb the losses, with just a 10% to 20% rise in prices. I will likely be writing more on famines, epidemics and other disasters soon, though, as they are not going to go away.

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