Contrary to the ‘head on the sand’ rhetoric that is coming from the Fed and mainstream business news regarding jobs, employment, and how the economy is really doing, the bottom line numbers have already signaled recession in the manufacturing side of the economy, and all that remains is for the service sector to hop on board. But as the central bank Chair earlier this week pointed towards uncertainty in the markets that are now having an effect on their ability to raise interest rates as promised in December, new data out today pretty much ensures there won’t be a rate hike for at least several months, if not at all for the rest of the year.
This is because on March 31, new jobless claims numbers came in and they were discovered to be at the highest rate in two years.
With both ISM Manufacturing and Services employment indices collapsing, endless headlines of layoffs, Challenger-Grey noting Q1 as the worst since 2009, and NFIB small business hiring weak, it is no surprise that initial jobless claims is finally waking up. For the 3rd week in a row – the longest streak since July 2015. The last 3 weeks have seen a 9.1% surge in jobless claims – the biggest such rise since April 2014. – Zerohedge
It has been surprising just how long it has taken for cuts in the oil industry to finally make it to the employment reports, since many layoffs took place going back to October and November of last year. But perhaps these had been masked by the seasonal adjustments made for the holiday shopping season where part time workers overwhelmed the underlying weaknesses that are occurring due to the elimination of higher paying full time jobs.
Without the highly manipulated unemployment rate that is verbalized over and over by the business world, the real employment issues that have pervaded the economy every since 2008 would be the final straw towards validating we are not only in a recession, but truly never left the Great Recession period of 2009-2011. But sadly today, it is only the equity markets that determine the true state of the economy in the eyes of Wall Street and the central bank, leaving the average American without a voice in demanding monetary policy that is focused on the real economy, and not just the stock markets.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.