The expected bear raid in precious metals occurred as the Non-Farm Payrolls report for May was released.
The report was mixed, although the headline number was somewhat deceptive. I cannot stress enough that the individual monthly numbers have more value for spin and speculation than for real analysis. It is the trends that are important.
Having said that, the headline seasonally adjusted number came in a little on the high side. But that was achieved with an equally significant downward adjustment in the prior month, so it was pretty much a wash. Jobs growth remains sluggish.
The unemployment rate ticked up. The manner in which unemployment is measured does not work well in a period of protracted unemployment where those whose benefits expire are eliminated from the count. Labor Participation Rate is a much more meaningful measure. And that measure is not good.
Hardly anyone mentioned the fact that hourly earnings came in flat, at zero growth. There will be no sustained recovery until the wage situation improves for those who provide the bulk of consumption for GDP.
The Birth Death model came in spot on at 205,000 jobs added to the raw number. The average of May for the prior two years is 208,000. I think this Birth Death model is just a further means of 'adjusting' the number. It does not appear to be based on any empirical data. At least they break it out so we can keep an eye on it.
I see where Steve Schwarzman, the CEO of Blackstone, has founded a scholarship program for promising Western students to pursue their business degree in China to gain insights from their management models and business methods. It is being pretentiously likened to the model of Cecil Rhodes' famous scholarship program at Oxford that spawned Bill Clinton. I wonder what the section on warehousing workers in mind-numbing firetraps will be called.
It was a little embarrassing to see Wesley Clark and Colin Powell, some of the political celebrities who feed at the Blackstone watering hole, rolled out for a favorable endorsement. One shrinks a bit, if they can recall the last time Mr. Powell was utilized to provide an endorsement, then at the UN, for another, greater act of foreign adventure based on shaky premises. How are the mighty fallen.
The students will be housed in a special unit at Schwarzman College with extra care given to the filtration of the air and the water, and unfortunately, the Internet. I wonder if it will be called Kurtz House.
“We penetrated deeper and deeper into the heart of darkness.”
Joseph Conrad
