Friday, November 5, 2010
By: Michael Pento
Ok, so I’ve never been accused of being a Pollyanna but today’s NFP report was only half good at best. The headline number was undeniably pretty good. Payrolls climbed by 151k and the total private sector employment growth for October was 159k. However, the unemployment rate remained at 9.6%. But the really awful news in the report came from the number of people employed at actually producing things.
Manufacturing actually shed 7k jobs and the total increase in employment from the goods producing sector of the economy was just 5k--or a paltry 3% of all new job growth. That means we are consuming and borrowing but not producing. Therefore, we have no real means of paying back our accumulating debt.
The underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking -- was little changed at 17% after 17.1% in the prior month.
The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more increased as a percentage of all jobless, to 41.8%.
I’m sorry, but if 97% of all new job growth comes from the non-productive part of the economy we aren’t fixing anything but just digging further into the abyss.
Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.