WHOOPS! I Thought Obama Said To Expect A Strong Employment Report

Based on today's true picture of the economy and employment, what we can expect is a massive new stimulus Bill to make its way through Congress, to be followed by an even more massive Quantitative Easing (aka printing press/helicopter drop operation) to be announced by the Fed.  Obviously this will be hugely bullish for gold and silver and is probably why gold is currently up the day despite the bloodbath in the stock market.

Let's look at the facts and figures.  The headline number reported that U.S. payrolls rose by 431,000 in May.  BUT, 411,000 of that number was from the temporary employment of Census workers.  I know someone who took a Census job and his work is finished and he can't find a private sector job to save his life.

The Government is reporting that the private sector added 41,000 jobs.  Hmmm...By now everyone probably at least has heard about the nefarious Birth/Death model of jobs creation used by the BLS.  This fraudulent metric is used to calculate the number jobs they THINK has been created by new businesses formed during the month less businesses that closed during the month.  Interesting theory to say the least.  The Birth/Death model for the month of May estimates that 215,000 net new jobs were created by new business start-ups.  Anyone know of anyone who has started a new business and hired people?  I don't.

Here's a sampling of the business sectors which the Govt purports to have created the most jobs based on new business formation:   78k in Leisure and Hospitality (medical marijuana shops and liquor stores?), 27k in Business and Professional Services (prostitutes maybe?), and 41k in Construction (???).  Go figure.  For accounting purposes, it's not accurate just to subtract the 215k birth/death jobs from the headline number to figure out the real jobs picture.  But what we can say with 100% certainty is that, given the fantasy number of 215k birth/death jobs, the private sector absolutely did not create 41k payroll jobs.  In fact, we can generalize that if you subtract the 411k census jobs from 431k total jobs, the private sector payroll actually declined, probably by about 100k (I will assume some new jobs actually were created by existing and new businesses).  Here's a link to the Birth/Death data:  Govt Fantasy.

The unemployment rate is another matter altogether.  The Govt claims that the jobless rate fell to 9.7% from 9.9% the month before.  BUT, the overall labor force declined by 322k.  What that number represents is people who want jobs but have given up looking.  If you go by the Govt "U6" report, which shows the number of people who are working part-time but want to work full-time or who stopped looking but want to work, the unemployment rate is more like 17%.  If you use the method of unemployment calculation used when Clinton was President - a number that John Williams of shadowstats.com calculates, the jobless rate is more like 22%.

Two days ago Obama gave a speech at Carnegie Mellon in which he proudly proclaimed that we should expect a strong jobs report today:  HUH?  I didn't know Obama had any economics classes in college or grad school.  But does anyone consider today's jobs report to be strong?  We better HOPE and pray that Obama can CHANGE course and become the leader and reformer that he marketed himself to be during his campaign.  If he's no better as a President than he is as an economist, we're screwed.