Bad U.S. payrolls could get a lot worse I have been saying this since the start of the year... POG is going to go up.. IMO.
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Bad U.S. payrolls could get a lot worse
DAVID BERMAN
11:42 EST Monday, Apr 09, 2012
You think 120,000 U.S. job gains in March is a big disappointment? Then get ready for April: John Hussman of Hussman Funds believes next month could show flat employment, or maybe even a drop – which would mark the worst official payrolls report in 19 months.
That’s right, the bears have been emboldened by Friday’s nonfarm payrolls report from the U.S. Labor Department. Economists had been expected gains of 205,000, according to Bloomberg News. So the actual number was a huge disappointment, and it raised anxiety over whether the recent good news on the U.S. economic recovery is for real.
For his part, Mr. Hussman has long been a disbeliever in the recovery, arguing for some time that most of the good economic news came from lagging indicators. Leading indicators, he believed, showed ongoing weakness that was at odds with an optimistic-looking stock market.
On the subject of U.S. employment, he picked up on an observation from fellow-bear David Rosenberg, that employment gains since June 2009 have come largely from those aged 55 and older. For those aged 55 and under, employment has actually fallen during this so-called period of recovery. The reason, Mr. Hussman explains, comes from a trifecta that has devastated the retirement plans of older workers: a loss of interest income, a loss of portfolio value and a loss of home equity.
“All of these have combined to provoke a delay in retirement plans and a need for these individuals to re-enter the labor force,” Mr. Hussman said in his note. “In short, what we’ve observed in the employment figures is not recovery, but desperation. Having starved savers of interest income, and having repeatedly subjected investors to Fed-induced financial bubbles that create volatility without durable returns, the Fed has successfully provoked job growth of the obligatory, low-wage variety.”