Things must be fine and fear trade must be over, considering the 255,000 payroll jobs that were supposedly added to the U.S. economy for the month of July, right? The market has sure been fooled, considering its ongoing climb, but the fundamental facts could not contradict the reported numbers any more than they are doing right here.
As Mitsubishi UFJ strategist John Herrmann wrote in a note shortly after the report, the “jobs headline overstates” strength of payrolls. He adds that the unadjusted data shows a “middling report” that’s “nowhere as strong as the headline,” and adds that private payrolls unadjusted were +85k in July vs. seasonally adjusted +217k.
Keep in mind that just for the economy to tread water and keep up with the population, the U.S. market must actually create at least 150,000 new jobs. According to the REAL unadjusted numbers of 85,000 jobs created, not only did we fall short, the unemployment situation actually got worse.
The seasonal adjustment that took place this month was off the chart, and the narrative for the economy continues.
Blatant fraud is what we have become dependent on for economic stimulus, along with a stock market largely dependent on high-frequency trading, a plunge pretention team, and a central bank with a bazooka ready to support the stock market.
The Trend is Negative...
While U.S. economic growth has practically halted and productivity is shrinking, DEBT CONSUMPTION is up. From 2000 through 2007, U.S. productivity was about 2.6%.
Between 2007 and 2015, it shrank by half, to about 1.3%, barely keeping up with population growth.The U.S. is in a situation where it is consuming more and producing less. Any nation that produces less than it consumes is headed for failure.
Tax Receipt Growth Drastically Slowing
Consider the federal government's tax receipts that only rose 1.2% year-over-year, which is down from 13.4% year-over-year since June of 2013. The last six times that tax receipt growth was at these levels, the U.S. economy was in a recession.
I can't tell you how long this fraud can pursue, I just know inevitably it won't last, and more extreme measures will be taken to prop up the house of cards.
Chief Editor, CrushTheStreet.com