The middle class has been thrown a lifeline
from Ronald McDonald
Wednesday, May 4, 2011
Euro Pacific Capital
By: Michael Pento
The non-manufacturing portion of the U.S. economy dropped precipitously in the month of April. According to the ISM Index, the service sector of the economy—which unfortunately accounts for 90% of GDP—plunged to 52.8 last month from 57.3 in March. The measurement of new orders dropped by the most since records began in 1997. New orders at service providers decreased to 52.7, which was the lowest reading since December 2009, from 64.1 in the prior month. Meanwhile, the employment index dropped to 51.9, from 53.7 a month earlier.
More data confirming the slowing economy came from the release this morning of the ADP employment report. The private payroll survey indicated that 179,000 jobs were created in April, down from the revised 207,000 reported in March. The BLS reported that 216,000 net jobs were added in March.
The rapidly rising cost of food and energy is starting to vastly curtail consumer spending on non-discretionary purchases. Therefore, inflation is well on the way to eroding employment and GDP growth just as it always has throughout economic history.
But not to worry all of you who are out of work or significantly under-employed. The middle class has been thrown a lifeline from Ronald McDonald. The restaurant chain announced on April 19th that it is looking to add 50,000 U.S. workers. Thus is the sad future for U.S. employment.
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.
Read about McDonald's Hiring