Jobs picture: Stagnant, stubborn (No hope nor change for the rest of this year)

Looking ahead to Friday's government jobs report, the outlook doesn't look rosy. Two separate reports issued Wednesday paint a grim picture of the job market.

Private sector employers cut 39,000 jobs in September -- a turn toward the negative after the private sector added jobs for seven straight months before, according to a report by payroll processing firm Automatic Data Processing.

Those cuts surprised economists polled by Briefing.com who had expected the report to show 18,000 jobs added during the month.

A separate report showed employers planned more job cuts in September, up from a 10-year low reported in August.

Employers said they would cut 37,151 jobs in September, a 7% increase from the 34,768 job cuts reported in August, according to outplacement firm Challenger, Gray & Christmas, Inc.

ADP and Challenger's reports use different metrics, with ADP measuring only private sector job growth and Challenger compiling planned job cuts in the government and non-profit sectors as well as private industry.

The two reports set the stage for the government's closely watched jobs number due Friday, which economists also expect to bring gloomy news.

Consensus estimates from Briefing.com forecast the report to show the economy added no jobs in September, and that the unemployment rate ticked up to 9.7% from 9.6% in August.

Even though job statistics are often a volatile measure, the latest data is worrying and make a bigger case for a 10% unemployment rate, Paul Ashworth, senior U.S. economist with Capital Economics, said in a research note.

MORE BAD NEWS ( Sorry, nothing to cheer you up ):

1) http://www.bloomberg.com/news/2010-10-06/oldman-sachs-says-u-s-economy-to-be-fairly-bad-recession-is-possible.html

Goldman Sachs Says U.S. Economy May Be `Fairly Bad’

“Goldman Sachs Group Inc. said the U.S. economy is likely to be “fairly bad” or “very bad” over the next six to nine months.”

2) http://www.cnbc.com/id/39532389

Private-Sector Hiring Falters; Planned Layoffs Up 7%

“Private-sector job growth tumbled by 39,000 from August to September, a considerably worse number than analysts had expected and indicative that the employment market is far from recovery, according to ADP.

The ADP National Employment report, compiled with Marcoeconomic Advisors, was projected to show a gain of 20,000 for the month.

“It’s a disappointing number but it’s not unexpected,” Joel Prakken, chairman of Macroeconomic Advisors, told CNBC. “GDP growth has slowed to below the growth rate of productivity and it’s inevitable that you’d have this deceleration in jobs.”

RE: And the DOW is currently slightly up - so much for predictability.

A lot of companies ARE MAKING MONEY. The problem is this — there is so much uncertainty that they DO NOT KNOW how long this will last....

Remember, when they HIRE, it becomes an additional expense to them ( especially young kids just out of college who need to be trained).

With Obamacare, the looming sunsetting of the Bush tax cuts, cap and trade and so much regulations going on, why would anyone do any mass hiring or expansion when they do not know how the above bills will affect the bottom line?

So, they hold on to their cash and adopt a wait-and-see posture. They squeeze every inch of productivity out of existing employees.

So, high unemployment is NOT at odds with profitability and a rising stock market.

Gold is working on $1350 an ounce and is up well over 22% year to date. It is never a good thing when the Dow and Gold go through the roof at the same time.

When the DOL September job report hits Friday, there is going to be a fire sale on Wall Street. In addition, Nazi Peloski is out talking up a National moratorium on foreclosures, perhaps for as long as a year, and if that rumor starts shaping up bank stocks will start taking a massive hit and the bank bubble the Government deliberately inflated starting with TARP will finally burst and really take the banking industry down once and for all.

The 800 pound gorilla in the room is the report from the Presidential Commission that is looking at the economy. When Alan Simpson and Paul Volker (et al) report right after the elections, I fear it will be used to set the stage for some sort of “National Emergency” that the Regime will use to inflict any number of “solutions” on the American people; such as a VAT (Value Added Tax), seizure of IRA and 401K retirement accounts, another increase in the Federal borrowing cap to well over $15 Trillion (the sky is the limit), along with a new program via Fannie/Freddie to start buying up any mortgage that is in default, foreclosure, or just upside down in value.

I see absolutely nothing on the horizon that promises to create the massive numbers of jobs we need. It takes 100,000 new jobs a month just to keep up with population growth.

RE: It is never a good thing when the Dow and Gold go through the roof at the same time.

COMPETITIVE DEVALUATION is occuring. The USA is debasing its currency (even now the fed is considering Quantititaive Easing part II — which is another way of saying — PRINTING MONEY).

Of course this is being done under the guise of trying to help our exporters so that they may hire again.

Well guess what ? Countries that export to the USA are not taking this lying down. Japan is intervening to weaken the Yen, so is China, so is Brazil, and on and on the Daisy Chain goes.

If no one trusts the value of currencies anymore, where else do they turn to? Naturally a STORE OF VALUE, one that has been used for thousands of years -— THE YELLOW METAL.

You folks notice the Democrat talking point that’s showing up in lots of newspapers-—comparing the Clinton record for jobs to the W Bush record for jobs????

Let’s talk about Clinton and not Obama!!!!

For the record, here’s the answer:

When Clinton became president, he inherited a booming economy and lowered interest rates by the Federal Reserve.

In 1992, after HW Bush cleaned up the Savings and Loan mess-—the economy grew at about 3.5% GDP and the deficit was shrinking.......and GDP growth accelerated to over 4% in 1993 before the Clinton increases.

But jobs and unemployment are a lagging indicator and Greenspan (who helped caused the crisis and recession) was slow to lower interest rates and the Bush tax increase extended the recession a little (which he was willing to do because he was told that Greenspan would slash interest rates in response)———so Clinton inherited an economy that was accelerating to fast growth, but the unemployment rate was topped at 7.8%.

The Federal Reserve considers 5% unemployment to be “full employment”—striking a balance between the purported inverse relationship between jobs and inflation.

So Clinton inherited a growing economy and raised taxes on income and profits and Medicare———

and by election 1994—the economy almost was in recession—which is why Republicans won Congress for the first time in 40 years....(ie it wasn’t any “Contract on America”)

After that, Clinton moved to the RIGHT and gridlock, lower inflation, and the peace dividend from the fall of the Berlin Wall allowed Washington, DC to hold down spending as the unemployment rate fell.

But even that wasn’t good enough to get to “full employment” and balance the budget, therefore Clinton and the Republicans —wrongly, I think-—cut the capital gains tax down to 20% from the REAGAN rate of 28%-—

which led to an economic and stock market boom which—after 1997 caused the unemployment rate to plummet to “full employment” and balance the budget, which...

led Alan Greenspan to cause a deflationary recession to keep the unemployment rate from falling any more......and as Bush took over in 2001-—we already were in recession

with stock market scandals and terrorist attacks on the horizon , spending levels raised, and tax revenues and the unemployment rate rising...

The unemployment rate when Bush became president was 3.8%—but the Fed considers that to be unsustainable and inflationary....so the surplus at that rate was unsustainable, too—in the opinion of the Fed.....

(which is what is wrong with Republican low tax policy that balances the budget at lower unemployment rates that the Fed won’t allow.....so why have taxes so low that it drives down the unemployment rate so fast and so low that the Fed puts on the brakes and puts us in recession? We need Fed reform before tax reform.)

Anyway...Bush inherited a recession with a low unemployment rate that the Fed wanted to RISE to 5%—therefore no jobs!

But after the unemployment rate rose above 5% full employment,,,,the Fed gave lower interest rates and the Bush ntax cuts stopped the unemployment rate from going above 6.4%——and after 2004,, the unemployment rate fell again BELOW the Federal Reserve’s “full employment” rate of 5%-—so Greenspan and Bernanke slowed down the economy by raising interest rates to stop the unemployment rate from falling—and to cause it to rise to 5%..

The media never explains this narrative, but that’s the real story.....

The Fed does NOT want the unemployment rate to fall below 5%—which is the reason WHY more jobs were created under Clinton than W Bush....

For much of the Bush presidency, we already were at FULL EMPLOYMENT, whereas under Clinton, it took years and a “tax cut for the rich” to get there briefly...

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