Flood of Bad Economic Data Ignored in Favor of Jobs Report (Audio)

Peter Schiff reviews the latest economic data in his podcast. Mainstream analysts write off an overwhelming amount of poor economic data while focusing solely on a decent jobs number. Peter strives to focus our attention on the bigger picture, pointing out that the Federal Reserve can’t possibly raise interest rates this year.

Highlights from the podcast:

“Well, a week of generally weaker-than-expected economic data was punctuated by yet another better-than-expected non-farm payroll report. This comes despite the fact that earlier in the week, the ADP private sector payroll report came in slightly below estimates at 201,000 jobs added in May. Also, 5,000 manufacturing jobs lost – the third consecutive monthly decline in manufacturing jobs. These are the important jobs. Not only are they higher-paying, but they’re productive. They also lead to exports, which improves our balance of payments.

“The official number, which came out Friday morning, the consensus estimate was 220,000 jobs. That followed the 223,000 jobs that was originally reported for April. The actual number, according tot he government: 280,000 jobs created in May, far exceeding the 220,000 jobs that had been forecast…

“The unemployment rate did increase to 5.5%, as a few hundred thousand more people re-entered the labor force, which is bucking the trend. The labor force had been declining. Now some people had come back to the labor force. In fact, the labor force participation rate is back up to 62.9%, from 62.8%. Remember, the lowest it’s been was 62.7, so at 62.9, we’re not far from the low…

“Of course, a lot of these people that have reentered the labor force don’t even want to be there. Remember, when we’re talking about labor force participation, when you look at older people – workers in their 60s and 70s – participation is at record highs. It’s younger Americans, Americans in their teens, 20s, and 30s – that’s where participation is at all-time record lows…

“I’m listening to all these analysts and strategists who are basically saying, ‘Hey, it doesn’t make sense, given how strong the jobs market is… that GDP is so low. It doesn’t make sense that productivity is falling so much. It doesn’t make sense that we don’t have consumer spending, that we don’t have industrial production; we don’t have output.’ So they think all these other numbers must be wrong. They think something must be wrong with the methodology. Because we know, from the jobs report, that everything must be great. Therefore, all the other data that is bad – there must be a problem with it… For some odd reason, all of a sudden, all these other methods for computing data are wrong because they don’t jive with this great jobs reports.

“It doesn’t dawn on anybody to think, ‘Wait a minute, we have a multitude of reports that say the economy is weak. And we have this single report that says that it’s strong.’ Instead of thinking that single report is the one that’s right and all these other reports are wrong, doesn’t it make more sense that all those other reports are wrong and this one lone hold out is wrong? …

“I just read the other day that the price of eggs in the last month has more than doubled. A lot of this has to do with the bird flew, and the fact that a lot of these chickens are no longer alive… But that’s still going to pinch the consumer, in that egg prices are higher…

“Even the IMF came out this week and urged the US government… ‘Hey, don’t raise rates until 2016.’ They’re going to get that wish in that the Fed is not likely to raise rates in 2015. But they’re probably not likely to raise them in 2016 either, unless of course, there is already a currency crisis that forces the Fed’s hand…

“Canada has roughly 1/10th of our population. Maybe it’s closer to 1/9th… They created 58,900 jobs. That’s the exact number. We created 280,000. In order for us to create proportionally the same number of jobs that Canada created, we would have had to create over 500,000 jobs during the month. So even though the 280,000 number is big than was expected, in the grand scheme of things, it’s still not a lot of jobs…”

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