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Lies, Bigger Lies And Economic Data 

By Gary GordonMarket OverviewAug 08, 2022 02:41PM ET
www.investing.com/analysis/lies-bigger-lies-and-economic-data-200628226
Lies, Bigger Lies And Economic Data 
By Gary Gordon   |  Aug 08, 2022 02:41PM ET
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It was the worst of times; it was the best of times.

On Friday, the Bureau of Labor Statistics (BLS) revealed that the country created more than 500,000 jobs in July. Equally terrific? The data show gains of nearly 1.7 million new positions in just five months.

Surprisingly, the very same BLS publishes a household survey on job creation. The result? Since March, there has been a net loss of more than 100,000 positions in the five-month period.

Jobs Since March 2022
Jobs Since March 2022

The mainstream financial media outlets focus only on the more favorable survey. Yet it might be worth discussing how the same government entity came up with such vastly different results.

Official Jobs Survey/Household Survey
Official Jobs Survey/Household Survey

One explanation? People work multiple jobs, and the official survey counts each of those positions as unique.

Another feature of the more widely cited Establishment Survey was the notion that unemployment dropped to 3.5% from 3.6%. The figure represents a multi-decade low.

However, more than a million workers have not returned to the workforce since the pandemic. This is clear from both the labor force participation rate and from the employment-population ratio.

In other words, the widely cited 3.5% unemployment rate is decidedly misleading.

FRED Labor Force Participation/Employment-Population Ratio
FRED Labor Force Participation/Employment-Population Ratio

Similarly, few seem to talk about the uptick in unemployment claims.

There is also the problem that workers are falling further behind. In particular, one would have to travel back in time many decades to find a period when inflation-adjusted earnings for employees were as negative as they are right now.

More disturbing? Households are forced to deploy credit card debt to get by.

For instance, total credit card debt rose to $890 billion, representing a 13% year-over-year leap. That is the quickest increase in more than 20 years.

Total Credit Card Debt
Total Credit Card Debt

And it’s not just BLS job data that has been incongruent.

Consider our service economy measures — the ISM’s Services Index and Markit’s Services Index. One is pointing to healthy expansion, while the other is showing definitive contraction.

How can data be so wildly different?

Service PMI Indexes
Service PMI Indexes

At the moment then, a sensible base case would point to stagflation. In particular, growth is mixed and inflation is high. (Inflation may still be rising.)

In this environment, the Federal Reserve has chosen to continue tightening. That does not usually happen when major indexes have fallen 20% or more from the top.

Fed's Responses To Bear Markets
Fed's Responses To Bear Markets
]

With the Fed aggressively reducing its balance sheet as well as raising its overnight lending rate, one might think the stock bubble would take a rest. Yet it keeps rising off the June lows.

S&P 500 Daily Chart
S&P 500 Daily Chart

Perhaps ironically, the bounce may be the least crazy aspect of the stagflationary particulars here in 2022. The same thing happened during the last true stock bear (11/07-3/09) — right before all heck broke loose.

S&P 500: Q4 2007, Current
S&P 500: Q4 2007, Current

Original Post

Lies, Bigger Lies And Economic Data 
 

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Lies, Bigger Lies And Economic Data 

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Comments (7)
Bu Ba
Bu Ba Aug 10, 2022 11:35AM ET
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i cant belive it goes up like in a bullmarket! Whats going on here? Are we living in the Matrix? How can S&P and Nasdaq make soon new ATH in this wors times?
Ken Russell
Konspiracy Aug 08, 2022 7:01PM ET
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Unfortunately, The economy is in worse shape than it appears and apprently those responsible are in denial. We need a quick hard landing not a soft landing…. A soft landing will just continue to prolong the bear markets and hurt the economy more in the long run. Soft landing = stagflation… Let’s just get this over with please, stop the lies and start recovery sooner. Everyone will win.
Ken Russell
Konspiracy Aug 08, 2022 7:01PM ET
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Oh and thanks Gary for the great article!
Bu Ba
Bu Ba Aug 08, 2022 5:32PM ET
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Very nice post! Finaly some few people who see the truth. but sad, that it wont change anything! They will keep pumping to catch all shorts! like in the real world, rich will always winn and we will always feed them :(
Bu Ba
Bu Ba Aug 08, 2022 5:29PM ET
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How is it possible Nasdaq and S&P are not dropping in a recession?! This is disapointing! all facts are pointing Nasdaq to fall under 7K but it continues to rise! Stockmarket is not regulatet! The richest can pump that *******to neu ATH any time and we honest investers will always loose! sad world we are living in! Billionairs buy iland and planes with our money! they got the infinite moneysource in theyr hand (Stockmarket)!
Robin Hood
RobinHdJr Aug 08, 2022 4:34PM ET
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Could political bias be distorting reporting of economic facts? In any event, lipstick on a **** it is still a ****..
Robin Hood
RobinHdJr Aug 08, 2022 4:34PM ET
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p.i.g. Come on https://investing.com!!! They don't filter spammers but they filter ********
Art Carrano
Art Carrano Aug 08, 2022 3:39PM ET
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This is the best article I've read in weeks. Serious questions deserve answers.
hd tv
hd tv Aug 08, 2022 3:21PM ET
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finally. someone has notice just how shocking some of the data differences has been for data supposedly tracking the same thing.
 
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