Marc Cuniberti The latest numbers out of the Bureau of Labor Statistics (BLS) showed an unexpected spike in new jobs last week coming in at 275,000.
While good news for the workers getting those positions and congratulations, unemployment also spiked up past expectations.
3.4% is the latest percentage of people who are deemed looking for work in the U.S. Looking at these numbers, one comes away scratching his or her head wondering how more job positions are being filled at the same time when even more people are applying for unemployment.
In this analyst’s opinion, the answer is the economy is softening along with the jobs market. This leads into my past musings in past articles that the Feds were misreading previous statistics. The Feds believed, per their own admission, that the low unemployment numbers we’ve been seeing in the past few months pointed to a strengthening economy.
My take on it contradicted that assumption. The dropping unemployment numbers was a sign more people had to go back to work in order to afford the higher prices brought on by high inflation. The new spike in unemployment confirms indeed, more people need to go back to work and are looking, while companies are either firing more employees due to a slowing economy or simply don’t have enough available positions to employ the increase in people needing work.
Ironically, Wall Street is celebrating a rising stock market which means more concentration of wealth at the top as 42% of Americans don’t own any stock. Last week’s State of the Union address had the usual positive spin on how things are getting better, while the latest statistics may paint a different picture.
Although the RATE of inflation is slowing, it is still growing, and more consumers are hitting the streets trying to find work to pay the bills.
Keep in mind only 1% of the richest Americans own almost half of the stock market.
The typical belief is that good old fashioned greed is the reason the growing pyramid of wealth is a sign of a flawed economic model.
Those who understand how a monetary system functions know that continually printing up paper dollars fuels inflationary fires and that in itself, for the most part, will concentrate wealth only to those that own stocks.
Meanwhile, most of the people I talk to are finding it harder and harder to make ends meet. Many are having to take second jobs while others line the streets blaming those evil corporations.
Readers of Money Matters know my position is that very little good comes from unbridled money creation except more inflation, which causes more concentration of dollars into the hands of a very few number of Americans.
The reason is that those newly created dollars are funneled into asset creation by those that can afford to either own or buy those assets, mostly stocks, and that unfortunately isn’t 42% of you.
Listening to the State of the Union address, it makes me wince with frustration as politicians don’t seem to understand how massive money creation, aka public spending, funnels directly into the super wealthy and very little trickles down to the average Joe Blow.
And don’t be fooled by the words “trickle down”, as it relates to economics.
Excessive public spending is the exact opposite of trickledown economics. Trickledown economics is good old fashion private investment which opens up those jobs we all need.
Public spending is a direct conduit into the wealthiest to Americans pocketbooks, who, for the most part, just buy more stocks.
To put the economy on a firm footing with a healthy, job generating environment, the government, much like your household, must run a financially sound checkbook, balance spending with income, and not garner that income from the very people and companies it portends to help by excessive taxation which seems to increase at every turn.
“Watching the markets so you don’t have to”
This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249. His insurance agency is BAP INC. insurance services. Email:
