This was the good old days. The vaunted Obama jobs recovery (waitresses, retail clerks, fry cooks, and maids) has petered out. The trade data earlier this week confirmed negative GDP for the 1st quarter. The Atlanta Fed model already shows only 0.9% GDP growth in the 2nd quarter. That will go negative as people with no jobs and those with jobs seeing their real wages decline have stopped spending.The 4th quarter GDP was boosted by citizens having to pay more Obamacare and heat for their cold houses. Winning!!!
Corporations are reporting declining revenues and profits, while using their spare cash to buy back their stock at all-time highs to boost executive stock compensation. Why spend money on capital investment or pay your workers more when you can pump your EPS, fire 5,000 people and outsource their jobs to India? It’s the American way.
The 99% are experiencing a recession in the real world. People around the globe are experiencing a depression. But Wall Street, aided and abetted by their Federal Reserve puppets and Politician cronies in DC, is joyous and overflowing with riches for the .01%. How long can they artificially prop up financial markets before the floor gives out?
If people in this country could just look up from their iGadgets and think for one moment…..
ADP Employment Tumbles To 15 Month Lows As Manufacturing Jobs Plunge
Submitted by Tyler Durden on 05/06/2015 08:22 -0400
Following March’s dismal drop in the ADP Employment report (the biggest miss in 4 years) and missing for 3 straight months, April printed a very weak 169k (against notably lowere expectations of a 200k rise). Even worse, February and March was revised even lower. This is lower than the lowest economist estimate.
Large companies were particularly weak which is to be expected considering the unprecedented M&A and buyback spree which is entirely at the expense of workers (and wages) while smaller businesses adding the bulk of the meager jobs print. All job gains were in the Services segment with Manufacturing losing 10,000 jobs in April and the goods-producing sector losing 1,000.
The esteemed Mark Zandi blames this on “the fallout from the collapse of oil prices and the surging value of the dollar.”
Must be the oil port strike again. Or perhaps it rained in the spring?
The details:
From the report:
Payrolls for businesses with 49 or fewer employees increased by 94,000 jobs in April, down from 105,000 in March. Employment among companies with 50-499 employees increased by 70,000 jobs, up from 64,000 the previous month. Employment gains at large companies – those with 500 or more employees – decreased slightly from March, adding 5,000 jobs in April, down from 6,000. Companies with 500-999 employees added no jobs, after adding just 2,000 in March. Companies with over 1,000 employees added 5,000 jobs, a small improvement from 4,000 the previous month.
Goods-producing employment declined by 1,000 jobs in April, down from 3,000 jobs gained in March.
The construction industry added 23,000 jobs, up from 21,000 last month. Meanwhile, manufacturing lost 10,000 jobs in April, after losing 3,000 in March.
Service-providing employment rose by 170,000 jobs in April, down slightly from 172,000 in March. The ADP National Employment Report indicates that professional/business services contributed 34,000 jobs in April, up from March’s 28,000. Expansion in trade/transportation/utilities grew by 44,000, up from March’s 41,000. The 7,000 new jobs added in financial activities is a drop from last month’s 12,000.
“April job gains came in under 200,000 for the second straight month,” said Carlos Rodriguez, president and chief executive officer of ADP. “Companies with 500 or more employees had the slowest growth.”
Mark Zandi, chief economist of Moody’s Analytics, said,
“Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation. Employment in the energy sector and manufacturing is declining. However, this should prove temporary and job growth will reaccelerate this summer.”
Change in Nonfarm Private Employment
Change in Total Nonfarm Private Employment
Change in Total Nonfarm Private Employment by Company Size
Change in Total Nonfarm Private Employment by Selected Industry
And the biggest ADP value added: the infographic.
https://www.youtube.com/watch?v=768h3Tz4Qik
Yellen Kills The Music, Says “Equity Valuations Are Quite High”, Sends Dow Red For 2015
Submitted by Tyler Durden on 05/06/2015 10:13 -0400
Rug… pulled.
*YELLEN SAYS EQUITY MARKET VALUATIONS QUITE HIGH
And with that The Dow has accelerated its weakness into the red for 2015.
HAHA
So whats next?
Didn’t Greenspan say “irrational exuberance” in 1997? What happened after that? Maybe we should all just BTFD. It has worked so well for 7 years. Wish I would have done it….
Very strange, Louisville is on fire with new construction of uber nice shopping and new restaurants opening up. Everywhere I look there are signs for help wanted, so any schmuck looking could easily find a job here. New roads and new bridges all over the place. Even near the doomstead in the country I see some construction. KY must not have gotten the memo.
Thats a pic of Billy this morning before he took a dump, he is a lot more agreeable after that.
The 99% are suffering a real recession?
Don’t buy it with 20% working for the government. The only government drones crying are the ones in Wisconson. However, at least they got to keep their jobs.
I’ve heard that the places that make ammo are hiring…a lot of people . Gun manufacturers are doing well too. I guess the 99% are getting ready to party .
Add me to the list.
Got laid off Monday. By June I’ll be collecting Unemployment. Yay!
At least my long position in VXX is doing well.
Sorry DC.
Even if the economy starts roaring, there will be relatively few jobs created. A lot of the roaring will result in extra igizmos and such being purchased, so a lot of benefit of boom will be lost overseas. It is a major reason stimulus no longer workers – US stimulus actually stimulates China, rather than the US.
Second, big biz, and little biz, do not want to hire people. They only do so when there is no other option. And big biz spends enormous amounts of money figuring out how not to hire people. They want to fire people – they want to do more with less. Every day, every week, every year they want fewer employees, not more. It is called “being more efficient”.
No one wants to hire folks, a lit of jobs are being automated out of existence, and stimulus efforts no longer work.
That is why I say jobs are a failed system. Jobs are NOT coming back. No one wants to hire people – it is expensive, employees are a pain in the ass, the odds of finding a good one are low, the bad ones work against the interests of their employers, it is difficult to get rid of bad employees, the govt regs make it untenable, etc ad infinitum.
Jobs are rapidly becoming extinct. People need to find a way of making a living, and stop being reliant on a job for an income. Because the days of “jobs” are numbered.
Seems to me we’re in a great malaise right now. No one wants to put their money on the line. For anything other than staples.
Dang, LLPOH, compared to you, Sarah Connor was an optimist.
2015-05-07 06:00 by Karl Denninger
We Have A New Problem
The ADP report missed, but the news is really in here:
Nonfarm business sector labor productivity decreased at a 1.9 percent annual rate during the first quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output declined 0.2 percent and hours worked increased 1.7 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decline in productivity follows a decline of 2.1 percent in the fourth quarter of 2014. From the first quarter of 2014 to the first quarter of 2015, productivity increased 0.6 percent, reflecting increases in output and hours worked of 3.5 percent and 2.9 percent, respectively. (See chart 1 and table A.)
Oh oh…
This is the second quarter of negative output sequentially; that hasn’t happened in quite some time (several years.) Further, it’s also the second sequential quarter of increasing costs, which also hasn’t happened.
Hours worked went up but output went down. This is particularly trouble in the manufacturing sector where costs bottomed in 2014 and have been rising smartly since; output per-hour has declined in the last two quarters as well.
This spells trouble ahead, particularly given the GDP revisions now in the pipe as a result of trade imbalance — an imbalance, I might add, that the President and Congress intend to and will add to if we allow TPP to be passed.
“Here it comes.”
Damn………We are so fucked. TPP nail in the coffin.
WASHINGTON (MarketWatch) – Investors should get used to the Federal Reserve discussing market stability issues, said Charles Evans, the president of the Chicago Fed, on Thursday. Many analysts have argued that the Fed’s zero-interest-rate policy has fostered instability, so it’s “incumbent” on the U.S. central bank to address instability risks, he said. “It is quite natural that…the chair of the Federal Reserve is going to make some comments about leverage, how that is working its way through the economy and might be imparting some risk to the financial sector,” Evans said in an interview on CNBC. On Wednesday, Fed Chairwoman Janet Yellen said stocks were quite high and could pose stability problems. Evans also remarked that stock valuations are high, but added that it was not his expertise to judge whether it was too high.
Agree with Denninger — I saw other data this week that shows productivity among the employed (and morale, a closely-tied stat) have dropped through the floor. Doesn’t bode well… the consumer confidence indices won’t pick up on it for at least 2-3 months.