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Brett Arends' ROI
June 8, 2010, 12:01 a.m. EDT · Recommend (17) · Post:
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"¹ Previous Column
Apple's Jobs blunders on options swap
First Take "º
Emotional breakdown ahead for economy
By Brett Arends, WSJ.com and MarketWatch
BOSTON (MarketWatch) -- The news on jobs isn't as bad as it seemed on Friday.
It's worse.
President Obama and Treasury Secretary Geithner were trying to putting on a happy face, but the markets weren't buying. They have tumbled worldwide since the latest payroll data.
But instead of overreacting, the markets may only just be waking up to the real bad news.
We already know that when you strip out the short-term Census jobs, May's jobs growth was a pitiful 41,000. But what people haven't realized is that the leading indicators for June are even worse. TrimTabs Investment Research Inc. tracks the real-time jobs picture by monitoring income tax deposits at the Treasury. And these have suddenly started falling. Based on the latest data, the firm predicts the economy will actually lose up to 200,000 jobs, net, in June. "The big news is that we have a job loss of about 200,000 coming in June," says Trim Tabs' Madeline Schnapp, "and the market isn't ready for it."
Tendai Musikavanhu, CEO of South Africa-founded Old Mutual Global Index Trackers, talks with Kristina Peterson of Dow Jones Newswires about the World Cup's economic impact and how to take advantage of the contest in the stock market.
It's not just the stock market. You can bet that the administration -- and the country -- isn't ready either. Remember, we need to create about 100,000 just to keep up with population growth.
The government says the unemployment rate "edged down" to 9.7% -- keeping it below the politically sensitive 10% level. Read more jobs coverage.
But that's only because about one and a half million people have just, miraculously "disappeared" from the official labor force.
A million and a half people disappearing? It sounds like a crazy conspiracy theory. But there it is, buried in the fine print of the government's own data.
From May 2009 to May 2010, the U.S. "civilian non-institutional population" of prime working age -- 20 to 64 -- expanded by one and a half million, 180.5 million to 182 million.
Yet over the same period the official tally of the labor force over age 20 held steady at just 148 million.
What happened to those extra people?
The Bureau of Labor Statistics doesn't have a full explanation. "We don't have direct questions (in the survey) addressing that fact," said a spokeswoman. But many of the disappeared are "unemployed who have decided not to look for work any more," or who haven't looked for work recently. Anyone who hasn't actively sought a job in the last four weeks vanishes from the rolls.
Brett Arends is an award-winning financial columnist with many years experience writing about markets, economics and personal finance in Europe and the U.S. He has received an individual award from the Society of American Business Editors and Writers for his financial writing, and was part of the Boston Herald team that won two others. He was educated at Cambridge and Oxford Universities, and has worked as an analyst at McKinsey & Co. He is a Chartered Financial Consultant (ChFC) and Accredited Asset Management Specialist (AAMS). His latest book, "Storm Proof Your Money," has just been published by John Wiley & Co.
This economy is dangerously close to a widespread depression, writes Chuck Jaffe.
28 min ago2:52 p.m. June 8, 2010 | Comments: 17
- OldYeller | 12:47 a.m. Today12:47 a.m. June 8, 2010
"Five ways the jobs numbers are worse than bad http://on.mktw.net/cBH25x" 11:50 p.m. EDT, June 7, 2010 from MKTWArends
"Apple's Jobs blunders on options swap http://on.mktw.net/a9GaGS" 11:28 p.m. EDT, May 17, 2010 from MKTWArends
"Little guy pays the price for BP disaster http://on.mktw.net/94aYvp" 12:04 a.m. EDT, May 11, 2010 from MKTWArends
"Why everyone's afraid of Apple http://on.mktw.net/aZzxNQ" 11:46 p.m. EDT, May 3, 2010 from MKTWArends
"Never put too much faith in a Wall Street bank http://on.mktw.net/aBc1Zb" 1:18 p.m. EDT, May 3, 2010 from MKTWArends
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