Peter Schiff: Just One More Hyped Up Jobs Report

According to the latest non-farm payroll report from the Bureau of Labor Statistics (BLS) the US economy added 199,000 new jobs in November and the unemployment rate dropped to 3.7%. This was widely viewed as a “strong” jobs report. According to one mainstream analyst, the November employment data “portrays an economy that is easing toward a soft landing and is not on the brink of a recession.”

Peter Schiff wasn’t as impressed. He called it “just another hyped-up jobs report.”

The mainstream is treating this as a “just right” jobs report. It wasn’t strong enough to scare the Federal Reserve into hiking rates. On the other hand, it was not weak enough to raise recession worries. Peter called it a “Goldilocks fairytale.”

Wall Street likes to pretend that everything is Goldilocks, but they forget how the story ends when the bears come back. But the bears are going to come and they’re going to eat Goldilocks’s porridge or Goldilocks.”

Despite all the hype, Peter said, “This is not a good number.”

But there was plenty of hype. The stock market closed up. The dollar ended up on the week. About the only thing that got whacked was gold. It got hammered down to just under $2,000 before recovering to slightly above that level. As Peter mentioned in his previous podcast, $2,000 appears to be the new support level, but he said gold could slide a little further on Monday and Tuesday.

Now, we might not. We might jump up. I don’t think there’s enough downside risk here for anybody to be concerned. … I would be more concerned about missing the upside than trying to buy the absolute bottom of a correction.”

Peter pointed out that the ADP private payroll data released earlier in the week came out worse than expected. So, who are you going to believe?

The estimate for the ADP report was 123,000 new private sector jobs and the number came in at 103,000. Inside that number, the economy lost 15,000 manufacturing jobs.

Those are good jobs. Those are the productive jobs that we need, and they have higher pay. Probably, the people who lost those manufacturing jobs, well, maybe they got a couple of part-time jobs working in a restaurant or in a hotel, or doing something to replace the paycheck that they lost. But they need two or three jobs, and that’s the story of this so-called strong labor market — people replacing good jobs with multiple bad jobs.”

The ADP report also showed a drop in leisure and hospitality jobs. That sector has driven recent job growth.

That set the stage for the BLS report and probably made people think it was going to be disappointing.

It’s important to point out that the BLS revised down the prior two months by about 35,000 jobs. In fact, the agency has revised every report this year down after the fact except for one.

So, to take this month at face value, because we beat by 19,000 jobs, and say, ‘Hey look! We created more jobs than we thought.’ — It’s very likely that by next month, they’re going to revise this month’s number lower. And so, it wouldn’t have been a beat. It would have been a miss. But no one’s going to care because they’re going to be focusing on the December number, which may be another beat that gets revised to a miss in January that nobody cares about because everybody forgot about December and now they’re looking at January.”

Of the 199,000 jobs the BLS claims the economy created, about 24% were auto workers and motion picture workers returning to their jobs after strikes.

Were these jobs really created? No. The jobs were there. It’s just that the people who had the jobs were on the picket lines instead of the production lines or whatever they’re doing in motion pictures.”

Of the rest of the jobs, 82% were in the healthcare and government sectors.

We don’t want government jobs! First of all, where is the government getting the money to pay all of these workers? They’re borrowing it! … These are not productive jobs. What are these government workers going to do with their paychecks? Well, thet’re going to buy stuff that they didn’t help produce and push up the price.

And there is a limit on how many healthcare workers the economy can support.

Healthcare is already bloated. We already spend way too much money. You know, a lot of the health care workers are just handling paperwork that has to do with insurance. And we have an excess amount of insurance because we have an excess amount of government involvement.”

The manufacturing sector reported a 28,000 job gain. But 30,000 auto workers returned to work. In other words, the economy shed 2,000 manufacturing jobs.

The government numbers reported an additional 40,000 jobs in leisure and hospitality. The ADP reported a loss in this job category.

They’re talking about the same month. They can’t both be right. And neither of them are probably right. That’s why these numbers don’t even mean anything. That is the whole point.”

And yet so many people spend so much time and energy obsessing over these numbers.

Of course, the government wants to give you good news. So, it’s not a big surprise when the government gives you good news. The whole thing is rigged anyway. The media, the government, it’s all a bunch of propaganda.”

Peter pointed out that most of the people fixated on the jobs numbers don’t understand what’s going in in the broader economy.

None of these numbers are going to matter when we have a huge crisis and all of a sudden it hits the fan. We basically started a financial crisis in March. And if the Fed hadn’t made the mistake of backstopping the whole thing and kicking the can down the road, who knows where we’d be right now.