New data for inflation for the U.K. and U.S. was released this morning. As has been the case since the beginning of the financial crunch, reported data for the U.S. continues to suggest that inflation is tame. This, of course, is at odds with real life experience, which suggests the opposite.
The Producer Price Index (PPI) edged lower 0.1% last month, the second decline in the past 3 months, the Labor Department said Tuesday. Core inflation, which excludes energy and food rose 0.2%, slightly faster than expected. But over the past year, core prices are up just 1%. Core prices, an invention of the government, are hardly representative of anecdotal experience since they assume that no one eats or drives.
For April, food costs dipped by 0.2%. It was the first decline in 9 months and came after a 2.4% surge during the previous month - the largest gain in 26 years. The March increase reflected the impact of a winter freeze in Florida that heavily damaged citrus and vegetable crops. Energy prices fell 0.8% in April with gasoline prices down 2.7%.
In the U.K., the reported numbers were far less sanguine.
Inflation leapt to 3.7% in April, significantly higher than expected, prompting a letter of explanation from the governor of the Bank of England to the new Chancellor George Osborne.
The annual inflation rate of the British Consumer Price Index (CPI) was up from 3.4% in March and well above the Bank’s 2% target. Economists had projected inflation to hit 3.5% this month.
The retail price index measure of inflation jumped even higher to 5.3% in April from 4.4% in March and reached its highest since 1991. The retail price index is used as a benchmark for many public sector contracts, benefits payments and wage settlements.
The further rise in inflation will prove sticky for the Bank of England. Interest rates are still at 0.5% and the Bank pumped £200 billion in newly created cash into the economy to fight the recession.
This news comes after many Asian countries are also experiencing various aspects of inflation - especially in the form of what appears to be housing bubbles. The housing price escalation is particularly prevalent in China and Australia. We have written two very recent blogs on the issues which can be reviewed by clicking http://markostake.blogspot.com/2010/05/asian-inflation-contagion.html and http://markostake.blogspot.com/2010/05/rising-chinese-inflation-augurs-well.html.
One has to remain vigilant as to the accuracy of inflation data as reported by the Labor Department. As we've also pointed out in various pieces, the methodology for computing the CPI has been altered several times since the beginning of the Clinton Administration. The effect of these alterations has been to substantially reduce the reported number. According to Shadow Stats (http://www.shadowstats.com/), the CPI would be reported at closer to 6% if the pre-Clinton methodology was still employed today.
The important thing to keep in mind is that the PPI and CPI are not necessarily indicative of what any individual will actually experience. A better measure is to review your outflows and compare them to the past. If your expenses are rising at 10%, then a tame CPI or PPI is completely irrelevant.
It's inevitable that even the reported numbers will start to creep higher and this should occur in the very near future. The most objective measure of inflation expectations is the GOLD market, which continues to surge to new all-time highs. If that market screams INFLATION, why isn't Uncle Sam listening?
Marko's Take
Some websites we like and urge you to check out are the following: LeMetropole Cafe (http://www.lemetropolecafe.com/) and Shadow Stats (http://www.shadowstats.com/). Both of these sites, like us, only deliver the unvarnished truth - a rare commodity these days.
Showing posts with label Department of Labor. Show all posts
Showing posts with label Department of Labor. Show all posts
Tuesday, May 18, 2010
Sunday, April 4, 2010
More Problematic Details Surface For March Non-Farm Payrolls Report
Yesterday, we took on the much fawned-over payroll report and pointed out, that despite the collective cheer from Wall St. and the Obama Administration, when properly analyzed, it STUNK!(http://markostake.blogspot.com/2010/04/jobs-report-received-well-but-below.html)
More details are coming in and they confirm exactly what we said. The recovery in jobs is nothing more than a phantom and is highly likely to be just a temporary blip.
Unemployment can be measured several ways. The headline number, also known as "U-3", is a very narrowly defined measure which conveniently excludes key segments of the labor market.
The Labor Department's more comprehensive gauge of workforce under-utilization, known as "U-6″, accounts for people who have stopped looking for work or who can’t find full-time jobs. Though the rate is still 0.5% below its high of 17.4% in October, its continuing de-coupling from U-3 indicates the job market has a long way to go before growth in the economy translates into relief for workers.
In March, U-6 ROSE 0.1% to 16.9%, despite the supposed creation of hundreds of thousands of jobs.
The official 9.7% unemployment rate is arrived at by including people who are without jobs or, who are able to work and have actively sought employment in the prior four weeks. The “actively looking for work” definition is fairly broad - including people who either contacted an employer, employment agency, job center, friends or sent out resumes.
The U-6 figure includes everyone in the official rate plus so-called “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently. It also includes people who are part-time because they can't find full-time work.
During the Clinton Administration, "discouraged workers" — those who had given up looking for a job, were re-classified so as to be counted only if they had been "discouraged" for LESS than a year. This time criteria defined away the long-term discouraged workers. The remaining short-term discouraged workers (less than one year) are included in U-6.
The always erudite Dr. Williams of ShadowStats, (http://www.shadowstats.com/) has created an unemployment aggregate which removes the extensive government massaging to provide a more realistic gauge of unemployment.
Known as the "SGS-Alternative Unemployment Measure", Williams adds the excluded long-term discouraged workers back into the total unemployed, resulting in a measure more consistent with real personal experience. The resultant SGS-Alternate Unemployment Measure rose to about 21.7% in March from 21.6% in February.
The 21.7% unemployment rate is not as high as the purported peak unemployment in the Great Depression (1933) of 25%, but the SGS level is probably about as bad as the peak unemployment seen in the 1973 to 1975 recession.
The Great Depression unemployment rate was estimated well after the fact, and with 27% of those employed working on farms, true comparisons are difficult to make. Today, less than 2% of the labor pool works on farms. Thus, for purposes of a Great Depression comparison, Dr. Williams believes it is more appropriate to consider the estimated peak non-farm unemployment rate in 1933 of 34% to 35%.
They keep spinning and we keep cutting through the BS. Marko's Take is on the job, so you don't need a PHD or a lie detector!
We want to wish everyone a Happy Easter.
Marko's Take
Please visit us on YouTube at http://www.youtube.com/markostaketv.
More details are coming in and they confirm exactly what we said. The recovery in jobs is nothing more than a phantom and is highly likely to be just a temporary blip.
Unemployment can be measured several ways. The headline number, also known as "U-3", is a very narrowly defined measure which conveniently excludes key segments of the labor market.
The Labor Department's more comprehensive gauge of workforce under-utilization, known as "U-6″, accounts for people who have stopped looking for work or who can’t find full-time jobs. Though the rate is still 0.5% below its high of 17.4% in October, its continuing de-coupling from U-3 indicates the job market has a long way to go before growth in the economy translates into relief for workers.
In March, U-6 ROSE 0.1% to 16.9%, despite the supposed creation of hundreds of thousands of jobs.
The official 9.7% unemployment rate is arrived at by including people who are without jobs or, who are able to work and have actively sought employment in the prior four weeks. The “actively looking for work” definition is fairly broad - including people who either contacted an employer, employment agency, job center, friends or sent out resumes.
The U-6 figure includes everyone in the official rate plus so-called “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently. It also includes people who are part-time because they can't find full-time work.
During the Clinton Administration, "discouraged workers" — those who had given up looking for a job, were re-classified so as to be counted only if they had been "discouraged" for LESS than a year. This time criteria defined away the long-term discouraged workers. The remaining short-term discouraged workers (less than one year) are included in U-6.
The always erudite Dr. Williams of ShadowStats, (http://www.shadowstats.com/) has created an unemployment aggregate which removes the extensive government massaging to provide a more realistic gauge of unemployment.
Known as the "SGS-Alternative Unemployment Measure", Williams adds the excluded long-term discouraged workers back into the total unemployed, resulting in a measure more consistent with real personal experience. The resultant SGS-Alternate Unemployment Measure rose to about 21.7% in March from 21.6% in February.
The 21.7% unemployment rate is not as high as the purported peak unemployment in the Great Depression (1933) of 25%, but the SGS level is probably about as bad as the peak unemployment seen in the 1973 to 1975 recession.
The Great Depression unemployment rate was estimated well after the fact, and with 27% of those employed working on farms, true comparisons are difficult to make. Today, less than 2% of the labor pool works on farms. Thus, for purposes of a Great Depression comparison, Dr. Williams believes it is more appropriate to consider the estimated peak non-farm unemployment rate in 1933 of 34% to 35%.
They keep spinning and we keep cutting through the BS. Marko's Take is on the job, so you don't need a PHD or a lie detector!
We want to wish everyone a Happy Easter.
Marko's Take
Please visit us on YouTube at http://www.youtube.com/markostaketv.
Friday, March 5, 2010
Great News!... More Jobs Lost!
The audacity of the Obama Administration to spin a systemic unemployment problem is nothing short of Orwellian. "Good news is good news". "Bad news is good news"! Is this the Audacity of Hope?
This morning, the closely watched jobs report came out. The Labor Department, which carried out its surveys at the same time that the snowstorms battered the East Coast, said in a report today that non-farm payrolls fell by 36,000 compared with a revised 26,000 drop in January.
While to most people, including all of us at Marko's Take, losing jobs AGAIN would seem like bad news.
But we don't live in Washington, D.C. where it's more important to "beat the spread" than to win.
Economists polled by Dow Jones Newswires were expecting payrolls to fall by 75,000, mainly because of the severe weather. So, the loss of "only" 36,000 jobs was a WIN! The January figure was revised from an originally reported 20,000 decline.
While jobs were LOST, the unemployment rate went DOWN! The unemployment rate, which is calculated using a different household survey, remained at 9.7% last month. Economists had forecast the jobless rate would edge higher to 9.8%.
A major factor in the "great" jobs number was care of Uncle Sam. Employment fell in construction and information, while temporary help services added jobs. Total government employment fell by 18,000, but that is mostly due to a decline in state and local jobs. The FEDERAL work force grew by 7,000, helped by an influx of Census workers along with the addition of 15,000 temporary workers!
Since December 2007, the start of the worst U.S. recession in decades, payroll employment has fallen by 8.4 million. So, what's another 36,000 jobs lost, unless, of course, you're one of those folks that are now jobless!
The White House continues to BLAME THE WEATHER!
Dr. Williams of ShadowStats (http://www.shadowstats.com/) has a far less sanguine view of the jobs situation than da boyz in D.C. According to Dr. Williams, "the weekly new claims for unemployment insurance numbers appears to have stabilized well off its peak at around an average of 470,000 per week, a level last seen as the current economic downturn was formally underway in early 2008."
Dr. Williams goes further on to say that "there has been some flattening out in activity, where a certain layer of layoffs has tended to run its course. Layoffs should start to rise again in the next couple of months. On the offsetting hiring side, the Conference Board’s seasonally-adjusted January help-wanted advertising (newspapers) was unchanged month-to-month at 10, while the seasonally-adjusted help-wanted advertising (online) declined".
So, this "great" jobs report (sarcasm intentional!) is likely to prove to be temporary, and as the second Dip of the Double-Dip-Depression takes its grip on the economy, the unemployment rate is likely to resume its rise. We hate to be the bearers of bad news, but we just tell it like it is!
Think we're in a recovery? Think the jobs news was really good news? TAKE ME ON!
Marko's Take
Episode 4 of our new YouTube series will be posted shortly. You can access it here: http://www.youtube.com/markostaketv. We are planning 5 more episodes in the near future and will publish a schedule of upcoming segments all based on Marko's Take. I hope you've had a chance to tune in and leave comments!
This morning, the closely watched jobs report came out. The Labor Department, which carried out its surveys at the same time that the snowstorms battered the East Coast, said in a report today that non-farm payrolls fell by 36,000 compared with a revised 26,000 drop in January.
While to most people, including all of us at Marko's Take, losing jobs AGAIN would seem like bad news.
But we don't live in Washington, D.C. where it's more important to "beat the spread" than to win.
Economists polled by Dow Jones Newswires were expecting payrolls to fall by 75,000, mainly because of the severe weather. So, the loss of "only" 36,000 jobs was a WIN! The January figure was revised from an originally reported 20,000 decline.
While jobs were LOST, the unemployment rate went DOWN! The unemployment rate, which is calculated using a different household survey, remained at 9.7% last month. Economists had forecast the jobless rate would edge higher to 9.8%.
A major factor in the "great" jobs number was care of Uncle Sam. Employment fell in construction and information, while temporary help services added jobs. Total government employment fell by 18,000, but that is mostly due to a decline in state and local jobs. The FEDERAL work force grew by 7,000, helped by an influx of Census workers along with the addition of 15,000 temporary workers!
Since December 2007, the start of the worst U.S. recession in decades, payroll employment has fallen by 8.4 million. So, what's another 36,000 jobs lost, unless, of course, you're one of those folks that are now jobless!
The White House continues to BLAME THE WEATHER!
Dr. Williams of ShadowStats (http://www.shadowstats.com/) has a far less sanguine view of the jobs situation than da boyz in D.C. According to Dr. Williams, "the weekly new claims for unemployment insurance numbers appears to have stabilized well off its peak at around an average of 470,000 per week, a level last seen as the current economic downturn was formally underway in early 2008."
Dr. Williams goes further on to say that "there has been some flattening out in activity, where a certain layer of layoffs has tended to run its course. Layoffs should start to rise again in the next couple of months. On the offsetting hiring side, the Conference Board’s seasonally-adjusted January help-wanted advertising (newspapers) was unchanged month-to-month at 10, while the seasonally-adjusted help-wanted advertising (online) declined".
So, this "great" jobs report (sarcasm intentional!) is likely to prove to be temporary, and as the second Dip of the Double-Dip-Depression takes its grip on the economy, the unemployment rate is likely to resume its rise. We hate to be the bearers of bad news, but we just tell it like it is!
Think we're in a recovery? Think the jobs news was really good news? TAKE ME ON!
Marko's Take
Episode 4 of our new YouTube series will be posted shortly. You can access it here: http://www.youtube.com/markostaketv. We are planning 5 more episodes in the near future and will publish a schedule of upcoming segments all based on Marko's Take. I hope you've had a chance to tune in and leave comments!
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