Job gains aren't what they seem

A shady payroll report continues a string of misleading economic data.

By Anthony Mirhaydari Mar 8, 2013 3:32PM

The market euphoria reached new heights Friday morning after government bureaucrats surprised investors with a better-than-expected payroll report. The economy added 236,000 jobs last month, pushing the unemployment rate down to 7.7%. Seems all good, and stocks responded in kind.


But once again, a look at the details reveals trouble. They reveal what most Americans understand deep inside their soul: The economy isn't getting better, the job market remains broken, and Wall Street's exuberance contrast sharply with the nervousness being felt on Main Street.


Here's why.


For one, good quality, full-time, full-benefit positions actually dropped last month and have been flat lining since September. We lost 77,000 positions and are still down more than 6 million full-time jobs from the November 2007 employment peak. Yet over that time, the population has expanded by more than 12.5 million.



As a result, the percentage of the total population working with a full-time job remains at lows that were seen, only briefly, in the 1970s and 1980s. That's why this recovery has felt so terrible for so many. And we remain a long way away from the 54% peak reached in the spring of 2000 -- despite the fact the stock market has already pushed to new record highs.



Another way to put this is that recent job gains have been low-quality, low-wage, part-time positions. Indeed, the number of people working multi-part time jobs has risen steadily since that full-time employment peak in 2000.


Second, the drop in the unemployment rate below 8% has largely been driven by people exiting the workforce in disgust. The way the government crunches the numbers, if you exhaust your unemployment benefits and decide, because of a lack of opportunity, so simply give up the search, you've just contributed to a drop in the unemployment rate.



When this happens enough, the unemployment rate no longer becomes a true metric of the health of the job market. That's happened now, which is why the civilian labor force participation rate continues to crater.


Resume copyright Dynamic Graphics, age fotostock, age fotostockCall me a skeptic. Call me a pessimist. Call be a perma-bear. All I know is, America is not on the right track. And the false sense of confidence today's jobs numbers is instilling in investors buying into an overextended market is setting people up for disappointment. The same disappointment being felt by the millions still desperately searching for rewarding, meaningful work to pay for a rising cost of living and a credit hangover accumulated over the last decade.


More simply, we're becoming a nation of single-income households when we have the debt burdens and expectations of two-incomes. Until that reverses, or the burdens lighten, the economy will remain under pressure. 


For now, I'm recommending my clients book profits and start rotating into beaten down precious metals. I'm adding the VelocityShares 3x Silver (USLV) and the Market Vectors Gold Miners (GDX) to my Edge Letter Sample Portfolio.



Disclosure: Anthony has recommended USLV and GDX to his clients.

Be sure to check out Anthony's new investment newsletter, the Edge, and his money management service, Mirhaydari Capital Management. A two-week free trial has been extended to MSN Money readers. Click the link above to sign up. Mirhaydari can be contacted at anthony@edgeletter.c​om and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.





Mar 8, 2013 4:28PM
Mar 8, 2013 4:03PM

You may want to call him Mr. Doom and Gloom, but he is a good offset to the rosy headlines we see here.

Compare and contrast...make up your own mind considering your own personal situation.

Mar 8, 2013 4:31PM

Anthony is right. The labor participation rate is the real drive. Notice that in the past it has always tracked closely to overall stock market trends. Notice today there is a major disconnect. Only the dumb money is getting into the stock market at the present level. The party is about to end. 

Mar 8, 2013 4:36PM
No, it's not sour grapes, it's a sour future for up and coming Americans (and you can forget about the over-50 crowd; they're done)   It's that this house of cards hasn't come down yet.  Since ol' Uncle Ben's been out back in the shed with his printing press, thing's jus' ain't been right.  And our stock market is showing super-human strength because it's high on drugs bought with Uncle Ben's fresh counterfeit dough.  Only problem is......sometimes drug addicts can go for years, appearing normal, until the crash and burn comes.
Mar 8, 2013 6:06PM
I dunno.  On my block, there are stilll a few 30 year old toddlers living at home.  The parents don't look too happy either.  Heh!
Mar 8, 2013 6:08PM

Finally, a voice in the wilderness. Seems right on, as long as we {the common peasants] continue to allow Washington and the bankers to play shill games we will never again see sanity in real time. Who owns stocks anymore, the wealthy. So why don't they bail out social security like they did the banks. God forbid a bank goes under. But let granny die eating canned dog food and go to the vet for medical. Don't count on the younger gen because many of them get a queasy tummy just being asked to take out the trash



Mar 8, 2013 5:49PM
Obamaville - where things really aren't as they would seem.
Mar 8, 2013 6:01PM
The labor department has been lying with false numbers to help Obama, two, most job gains are low paying part ime work and the lower uemployment number is due to more people dropping out and not looking. My business took a 30% hit in 2009 and is still down 30% which is the real proof of the state of the economy. If these numbers were really true,i should have gained back the 30% that i lost. The feds continue printing money and floating this fake economy which will one day cause great pain for every one from a housing crash and a stock market crash.
Mar 8, 2013 4:45PM
72% of the people that left the workforce between August 2011 and August 2012 were 65 or older. You cant ignore the fact that baby boomers are retiring.
Mar 8, 2013 6:21PM
finally, Anthony you are telling the truth.....picture is not so nice out there....and we that work are supporting almost 50% of those on "disability" lawyers are making a career out of advertising how you should get disability....for those folks time is a ticking.........
Mar 8, 2013 6:58PM
Anthony, I don't need your charts to tell me what I've known for a LOOOONG time: this economy is in trouble and we have 535 corrupt, incompetent elected morons - including the president and VP - who are only making things worse. Get rid of the Fed (and put Ben Dover Bernanke in prison!), fire Congress, and let's get back on track with 'new blood' who are not only competent, but also understand what the term 'public servant' really means.
Mar 8, 2013 6:15PM

Thats the trouble with the liberals they do not even consider any facts. I wish at this point we would do what we should have done when all the socalist progressive democrats were calling Bush a raciest because he was trying to get the democratic controlled congress to stop there appointees that were the CEO of fannie mae and freddie mac. Remember democrats told bush on this very post that he did not want minorities to own a house. Bush said it was over extended and to slow down but the democratic run congress refused thus causing the  "Great Recession" that the democrats now blame entirly on Bush! 

    At that time i wish we could have passed a law that said if you are such a low information voter that you support the  over leverage of the banks (caused by the clinton community service act) and enforced by the group acorn (blackmailing banks into giving loans to unqualified minorities and illegal aliens) . the law would say that if you support this potential problem with the banks then you would be uneligable to get welfair or unempolyment, food stamps , housing or any government benifit.

    Now with the same mentality Obama has fudged the numbers to keep public support so he can get more votes by making illegals , legal!  He counts those retiring those no longer looking for work and counts anybody working 10 hrs or more per week as "having a job"!!

    I would think that the i love Obama at any cost would start seeing that what he says and what really is being done are two different things!  What is being said in this article is that the liberals are doing it agin, false numbers most likley huge inflation and high interest rates. Low employment and rampat underemployment are still here and if the republicans give into Obama and the socalist party there will be doom and gloom all cause by the low information voter.

    Remember Obama loves the great headlines but look at other articles burried that says employeers are not ready to hire, sales are off and future orders are flat.  Wake up to the possiabilites other than what Obama the great has told you!!!

Mar 8, 2013 7:11PM
Whether the jobs report is significant or not, the Dems will use the report to keep fooling the dumb and dumber dependent electorate. Hillary for 2016. Total USA collapse by 2020.
Mar 8, 2013 6:21PM
I love it, every liberal site such as this seems to have more sensible clear thinking conservatives.
Mar 8, 2013 7:11PM

Yep...right on Anthony.


Isn't it curious that the comments section on the main market page has been discontinued? Its really turning into a big lie and main st is, once again, turning away in fear most likely.

Mar 8, 2013 7:28PM
Smoke and Mirrors is what we've received from the Federal government for decades.  We elect these people to lie to us.  One of my favorite quotes is, "The first casualty in war is truth."   Likewise, it is the first causality in economic reports, be they from corporate America or the Federal government.   We need a new motto to replace "Land of the Free."    May I suggest  "Piss on them and tell them it's raining."
Mar 8, 2013 6:42PM

Mar 8, 2013 7:36PM
Anything the main stream media rants and raves about is a lie.  Plane and simpley a lie.  You would think people in this country would have caught on by now.  Socialism cannot survive on truth's.
Mar 8, 2013 6:28PM

want to know why the rich are rich are the progressive socalist democrats are not? Because they understand what is about to happen by reading these doom and gloom charts!  They sold there realestate when those doom and gloom charts said there was a problem.

    They sold there stock high and when the low information voter and hater of the rich were buying stocks and houses they were shorting them. making millions and millions off the stupidity of the uneducated low information voter.

    Stop letting the low information uneducated Obama supporter dragging you down. Vote democrat to feel good thinking you are helping the "little guy" . NO you are the reason they do not have a job, you are the reason they are running out of unempolyment and are loosing there house, you are the reason everybody  will be paying very high interest rates in the future and your kids will have so much debt that it will be very hard for them to have the freedoms that we have had.  The socalist democrats are taking us down one level at a time, Obama loves socalist he thinks Greece, spain, itally , portugal and the UK are great!  He loved Chavez and his take over and destruction of private companies.   

     Wake up and learn the truth, listen to the people that have made lots of money and stop letting the progressive socalist low information Obama supporter take your future your familys future and your childerens futurt away from you.

    Just think about it and you might just have a chance!!!

Mar 8, 2013 7:30PM
Makes you wonder why there are so few people actually looking for a job and in the job market?  We know the answer to this....
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