goes to the..... Market.

For?

Believing the employment report is a "Goldilocks Moment."

The employment report and unemployment numbers both say, if you read them objectively, that we are at full employment, that there is no problem finding a job, and that, as a consequence, the economy - and Chucky - is healthy.

But wait a second.

If the labor market is tight, then that means there is less supply (of workers) than demand (for workers), right? That's the definition of a tight market, after all.

And what happens when there is less supply than demand? Economics 101 here folks.

But we are told there is no upward wage pressure.

All of these things cannot possibly be true.

So which one(s) is/are false?

A hint comes in the employment report. The Employment report states that the economy added 132,000 jobs in June. The claim is that we added 22,000 goods-producing (manufacturing) jobs, among them 7,700 in construction and 14,000 in manufacturing.

It also claims we added 15,000 retail trade jobs, 18,000 business and professional service jobs, 18,000 education jobs, 13,500 leisure and hospitality jobs and 22,000 government jobs.

But did we really add those jobs?

If you dig into this little ditty called the "Birth/Death" adjustment that the Bull****LaborSuckheads like to publish, you will find that they imputed the following gains:

26,000 construction jobs, 7,000 manufacturing jobs, 19,000 trade, transportation and utilities jobs, 6,000 financial activities jobs (e.g. mortgage brokers?!), 20,000 business and professional jobs, 81,000 (!) leisure and hospitality jobs and 6,000 "other services" (burger flippers?) jobs.

They subtracted 1,000 information services jobs and 9,000 education and health services jobs.

The grand total of the "invented" jobs? 156,000.

More to the point, that is twenty thousand more jobs than they claimed were created!

So did we really create all those jobs? Is the labor market really tight? Or is the truth that we're creating fewer jobs than we are creating workers, the market is actually quite soft, and this is why there is no wage pressure?

What do the ICSC and Redbook numbers tell us? That the rate of growth in consumer spending has come to a standstill.

How can that be, if we're adding all these jobs? Hmmmmm.....

Now clearly, there are some jobs that are not counted in the survey and which, if left unreported permanently, would be a problem. But do you really expect us to believe that 26,000 people were hired but not counted in construction? Or that 20,000 "business and professional" jobs materialized out of thin air? Or that 81,000 in the leisure and hospitality industry - even though it is summer - on the back of 75,000 last month and 95,000 in April?!

Facts are that this "black box" model has been roundly criticized by many, but it is also true that the Bull****LaborSuckup department refuses to publicize exactly how they arrive at those numbers. One could reasonably put forward the belief that they just come up with numbers they think the Street will like and publish them!

If you dig far enough down in the Bull****LaborSuckup department's web pages you will find this about the "Birth/Death Adjustment":

"Q: Is birth/death ever benchmarked to actual data, or is just the overall estimate benchmarked?

A: No, the birth/death factors are not independently benchmarked. Although more recent data are available, birth/death factors are not benchmarked or recalculated in the benchmarking of the CES estimates. Only the estimates are benchmarked."

So in other words.... "we don't bother trying to benchmark our models."

Or is that "we don't give a good damn if the numbers are actually correct, just so long as people like hearing what we say."

Tee hee......

Oh, and there's this problem with models - they tend to be quite inaccurate when economic inflection points - that is, circumstances not envisioned by the model - are reached.

You know, things like a housing recession where prices for homes fall - something that hasn't happened since the 1930s?

Yeah, that.

Anyway, your evidence for the Job Market not being healthy is really quite simple - if we were at full employment and there were more jobs than workers, wage pressures would be rising strongly.

We know that is not the case.

Govern your interpretation of the Bull****LaborSuckup reports accordingly.

Its earnings season. Do you have a target painted on your back? :)