Peter Schiff Podcast: Part-Time Jobs Fuel Weak Non-Farm Payroll Report

Late last week the Non-Farm Payroll Report was released. Peter Schiff laid out the details of the official scorecard on U.S. job creation and unemployment in his latest podcast. The big story of the reported “employment gains” is that they lump full- and part-time jobs together. They aren’t taking into account that when someone loses a full-time position in a field like manufacturing, they often have to get two, maybe even three part-time jobs to fill the financial void left over from a layoff.

As Peter Schiff explains, the quality of jobs added is more important than the gross number of jobs added. And by all accounts, the September report is bad news. Peter goes on to discuss a recent CNBC interview with Alan Greenspan, where he talked about the current stagflationary environment of the U.S. with slow economic growth and elevated inflation. That is the best possible environment for investing in gold and silver, and it’s only a matter of time before others wake up to the fact that Greenspan is hitting the nail on the head.

Highlights from the show:

This morning the government released the most important and most highly anticipated economic release of the month. At least that’s what everybody who trades in just about any market believes … and that is the Non-Farm Payroll Report, the official scorecard on job creation and unemployment. This time, it was for the month of September, the final month of Q3.

By the way, the Atlanta Fed, which continues to do the interest rate limbo, lowered the bar again today on the Q3 GDP, which was 3.8% a month ago, when Janet Yellen talked about how the case for a rate hike had been strengthening. As of today, the Atlanta Fed is down to 2.1%, and politically they are still trying to keep the estimate above 2%. Although, by the data, I expect it to be south of 2%.

The important news today was the jobs number; people were looking for a strong report – I think the consensus was around 170,000, – but most people were talking 190 – 200,000. Some people were looking for a number north of 200,000. We got 156,000 jobs, which was below expectations, but a little better than the prior month.

Even though they revised the prior month up, they revised the month prior to that down, so the net effect of the revision was a decline. The unemployment rate, expected to hold steady at 4.9, actually ticked back up to 5%. Average hourly earnings, expected to rise by .3, following a small increase of .1 the prior month, came in at .2

Not quite the gain everybody thought. This is not a good report, and anybody who thought the Fed was going to hike rates in November, they clearly don’t think it anymore. I’ve been saying this for a long time that the big story is that we are replacing full-time jobs with part-time jobs. Employers need more part-time workers than full-time workers because each one works fewer hours. Clearly, everything is slowing down. I mean, if you raise rates now, it’s like you’re helping to push a weakening economy over the cliff that much quicker.

We’re always going to have net job creation when you are transforming the economy from full-time to part-time employment, and that was clearly the case this last month. According to the Household Survey, we lost 5,000 full-time jobs in September and added 430,000 part-time jobs. I would venture to guess that pretty much all of the net increase from August to September, 150,000 or so jobs, is in part-time work.

Also, we got the jobless claims numbers that came out yesterday and it was another drop. The weekly claim was 249,000 – that was the lowest number in something like 45 years. When that number came out, there was a spike in the dollar and gold dropped $10-12 bucks, because, ‘Ah this was proving that the Fed is going to raise rates!’

The jobless claims number has been low for years, so if the Fed were going to raise rates because of low unemployment claims, why didn’t they raise rates years ago? Does anybody really think that we have the strongest labor market in half a century?

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