Does Anyone Care About Jobs?

On Thursday, data showed the number of Americans who applied for unemployment benefits at the end of April rose to a five-week high, which missed economists’ expectations. The jobless-claims data came one day after a weaker-than-expected report on private-sector payrolls and a decline in worker productivity, which pushed stocks to finish lower on Wednesday.

Together with a surge in the dollar today soured investor’s taste for risk.

Investors don’t trust the jobs report given its lack of correlation to other economic reports. For example, if more people were working you would see more household income and that’s means more spending and that means money would be changing hands more or greater money velocity but we are witnessing just the opposite.

Unemployment

Instead, while the government continues to report that more of the population has got a job we have a major disconnection with the velocity of money, which has been plummeting since 2010. The truth is because of Obamacare more and more business are hiring part time workers, so job creation can be on the rise, but people aren’t making it because money isn’t turning over in our economy, which is generating no growth. This illustrates very well what is happening under this administration.

Then when you through in the inflation of rising rents, food, energy, and medical care, the four biggest expenses real take home pay is really hammering the majority of people.

Rate Hike Talk Begins

Changing topics, first this week we heard from Fed President John Williams about a possible rate hike in June and today we heard from St. Louis Fed President James Bullard who stressed all options are on the table at the June 14-15 FOMC meeting. “We’ll get quite a bit of information between now and the June meeting, and then we can make a decision,” Bullard said.

I don’t believe any of the Fed presidents want to raise interest rates but they want to take the pressure off of the Japanese yen. It is interesting to note that too many investors are betting on the appreciation of the yen, while commercial traders are now “short” the yen, expecting a reversal.

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