The headline from Bloomberg states, "U.S. Loses 539,000 Jobs, Fewer Than Forecast, in Sign Economy Stabilizing." After looking through the release, I have just a couple of comments.
First, expectations were for a loss of 600,000 jobs. The better-than-expected result can be attributed to the addition of 72,000 government jobs, with most of those jobs being added at the federal level. This is hardly surprising given the record spending coming out of Washington. It probably took 72,000 people just to spell check the budget. Our ever-expanding federal government is hardly a source of strong future economic growth.
More significantly, the Birth/Death model registered its largest monthly gain of the past 12 months. In the midst of the worst recession since the Great Depression, the government birth/death model has projected that 226,000 jobs were created in April. 76,000 jobs were apparently "born" in the leisure and hospitality sector, despite hotel occupancy rates plummeting. I suppose if we count all of the Craigslist ads for "personal massages" that might make sense. Back all of these assumed jobs out of the total and we're left with a loss of 765,000 jobs in April.
But you won't read about this 765,000 loss because all is right with the world again. The banks are stress-free, consumer confidence is rising, housing is bottoming, we're in a new bull market, and debt and non-performing assets are oh so yesterday.
Disclaimer: The Rubbernecker is once again shorting select U.S. equities.
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