Saturday, November 7, 2015

Stinky Saturday: Fussing Over the New York Times

RelatedFussing Over the Fed

"Strong growth in jobs may encourage Fed to raise rates" by Nelson D. Schwartz New York Times  November 07, 2015

Hiring at US companies shifted into higher gear in October, helping to lift wages and clearing the path for the Federal Reserve to raise interest rates next month.

A more $elf-fulfilling report I have never seen.

The 271,000 jump in payrolls reported by the Labor Department on Friday was much more robust than expected and suggested that the economy had enough strength to allow the central bank to begin its move away from the crisis-level interest rate policy it has been following for nearly eight years.

You have just been lied to.... AGAIN!

Fed officials were poised to raise short-term interest rates from near zero earlier this year, but they held off as economic conditions overseas worsened and domestic job growth slackened in August and September.

But now the underlying solidity evident in the October report is expected to strengthen the hand of monetary policy hawks who favor an increase in short-term rates, while reassuring Janet L. Yellen, the chairwoman of the Federal Reserve, and her centrist colleagues that the economy can handle modestly higher borrowing costs.

“It was pretty much everything you could ask for in a jobs report,” said Michelle Meyer, deputy head of US economics at Bank of America Merrill Lynch. “Not only was the headline number strong but there were upward revisions for prior months, the unemployment rate fell, and wage growth accelerated.

How interesting. 

"American businesses added a solid but unspectacular 182,000 jobs in October, according to a private survey. In a report Wednesday, payroll processor ADP also revised September job creation down to 190,000 from 200,000 reported earlier. American consumers are spending at healthy levels, encouraged by increased job security, low energy prices, and improved family finances. But manufacturers have been hurt by a strong dollar and economic weakness overseas. ADP reported that factories shed 2,000 jobs in October on top of a loss of 17,000 jobs in September."

Hey, what's two days ago anyway.

RelatedKraft Heinz two-year downsizing plan to cut 2,600 jobs

"Drugstore chain and pharmacy benefits manager CVS Health is laying off 150 people, a spokesman said Friday, a small fraction of the company’s more than 200,000 employees in the United States, 7,000 of whom are in Rhode Island. CVS Health said last month its forecast for 2016 earnings was well below what Wall Street expected. Still, its third-quarter revenue of $38.64 billion was up 10 percent from the same quarter in 2014. Operating profit of $2.33 billion was up nearly 4 percent."

Those are permanent layoffs.

Also related:

"CVS Health Corp. chief executive Larry J. Merlo’s total compensation increased by 3.3 percent to $32.3 million last year, the company reported Tuesday. Merlo, whose compensation included personal use of the retailer’s jets valued at $46,293, took over as the CVS chief executive in 2011. He has worked for the company for more than 30 years. The Woonsocket, R.I., pharmacy chain made headlines last year for dropping tobacco products as it expanded to offer more health services. Merlo’s total compensation included his base salary, time- and performance-driven stock awards and options, cash incentives, pension-related funds and other benefits, according to the most recent disclosure statement from CVS.""

I no longer shop at CVS. I go to Walgreens instead. Their stores are better, cleaner, and cheaper.

“Things could still go wrong between now and December, but the odds are better than even that the Fed will raise rates next month.”

The unemployment rate dipped to 5 percent, from 5.1 percent in September. Average hourly earnings also bounced back, rising 0.4 percent in October after showing no increase in September; that lifted the gain to 2.5 percent over the last 12 months, the healthiest rate since 2009.

Along with altering the landscape for policymakers in Washington and traders on Wall Street, if the strength in the labor market in October persists, it could also shift the political debate as the 2016 presidential campaign heats up.

A strong economy tends to favor the incumbent party in the White House, and it could blunt Republican attacks on President Obama’s economic record, which have been a mainstay of the GOP candidates’ message.

Are you buying the narrative?

Significant pockets of economic weakness remain.


Despite the increase in pay last month, most workers will need bigger raises for some time to come to make up for ground lost after a long period of wage stagnation. At the same time, many Americans remain on the sidelines of the job market, discouraged by years of lackluster hiring after the Great Recession.

They are not counted, and those the unemployment numbers look so good!

The proportion of Americans who are in the labor force, which fell to a 38-year low of 62.4 percent for September, was unchanged last month.

Okay, that is a LIE!

The "job market just demonstrated that it may be nearing full health, but the share of adults working has fallen to 59.3 percent, the lowest level in 31 years."

So not only is the TRUE UNEMPLOYMENT RATE OVER 40%, but it is likely worse when counting adolescents!

Still, at 5 percent, the unemployment rate is very close to what would normally be considered the threshold for full employment by the Fed and many private economists.

Used to be 3% unemployed was considered "full" employment.

How f***ing Orwellian is that, huh?

The slack that built up in the labor market after the recession, however, has changed traditional calculations of how far unemployment can fall before the job market tightens and the risk of inflation rises.

It means they are shoveling $hit at you, readers.

The Labor Department’s broadest measure of unemployment, which includes workers forced to take part-time jobs because full-time work is unavailable, fell to 9.8 percent in October from 10 percent in September.

Artificially low! 


Why is it when I see a New York Times byline I feel like I need to take a shower?

Also see:

"The typical US household saw its net worth actually decline 1.2 percent from 2010 to 2013....

Incomes for the highest-earning 1 percent of Americans soared 31 percent from 2009 through 2012....

And after 30 years of skyrocketing income inequality, the top 1 percent now control a bigger share of wealth than they have since FDR, [and] not only are the rich getting richer — they’re getting taxed less, too."

The legacy of Obama's economy!