Sam Culper at Guerrillamerica has started a series called Executive Intelligence Summary (EXSUM). This will be an Economic Intelligence Summary ECSUM based on the same model.
There have been three extremely important economic stories released in the past week. Two have received very little coverage. The third concerning the amount of people giving up looking for work in the United States received some coverage yesterday (Jan. 10, 2014), but only because the numbers can no longer be ignored. It is my hope that you will pass this information along to get people to start thinking about the economy. Regardless of what our “leaders” state, unemployment benefits and disability will not lift our economy out of this depression.
David DeGerolamo
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1a. People Not In Labor Force Soar To Record 91.8 Million; Participation Rate Plunges To 1978 Levels
Curious why despite the huge miss in payrolls the unemployment rate tumbled from 7.0% to 6.7%? The reason is because in December the civilian labor force did what it usually does in the New Normal: it dropped from 155.3 million to 154.9 million, which means the labor participation rate just dropped to a fresh 35 year low, hitting levels not seen since 1978, at 62.8% down from 63.0%.
1b. More Than Half Of December Jobs Added Were Temporary
Once again, in its sheer panic to tout the quantity, or lack thereof, in the case of the December jobs number, the frenzied media and pundits completely ignored the quality of the jobs gained in the last month of December. Or lack thereof. Because as the simple breakdown below shows, of the 74K jobs gained in December, 55%, or 40K were the worst of the lot when it comes to wages or benefits: temporary jobs.
2. Baltic Dry Index Collapses 35% – Worst Start To Year In 30 Years
When this indicator of global trade rises, everything is rosy and reams of asset-gatherers and talking-heads wil quote it as indicative of how great the world is. When it drops – silence. There’s always an excuse – over- or under-capacity, too many ships, too few ships, etc. However, the last 2 weeks have seen a 35% collapse in the cost to ship bulk. There is a relative seasonal pattern over the holiday period – with shipping costs rising into the holiday and falling after but… this is the biggest drop from a Christmas Eve since at least 1984, 30 years! Seems like the inventory stacking of Q4 had absolutely no follow-through whatsoever…
Germany has had billions of dollars worth of gold in the Federal Reserve for decades, but announced last year that it would like at least a percentage of it returned by 2014, and more in subsequent years. The initial request generated massive international speculation, but the actual return so far has been less publicized.
