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The BLS Just Made B.S. History

Chuck Butler (June 5, 2009)

Friday, June 6, 2009

Plus, the Latest in Central Bank Parlance

By Chuck Butler It’s Jobs Jamboree Friday folks, and we’ve just witnessed something that hasn’t been seen in 25 years… A “published by the BLS” Unemployment Rate of 9%!

You know me… I think the Bureau of Labor Statistics (or “BLS”) should just drop the “L” from their name. After all, they have gone absolutely whacko with all the adjustments and deletions they’re making to the unemployment statistics!

So for those of you keeping score at home, before the Jobs Jamboree was released this morning, the “experts” believed the total jobs lost in May would be -520,000, with the unemployment rate rising from 8.9% to 9.2%.

Me? I must say I always thought that -520,000 number was too optimistic. But, with the BLS making adjustments, it’s just too difficult to make a call based on the data we’ve seen. Data like the worse-than-expected ADP report.

Recall that last month the BLS added over 220,000 jobs to the report out of thin air, including construction jobs! I shake my head in disgust!

And here it is: According to the BLS, the U.S. economy lost 345,000 jobs in May.

In other words, even the forecasters got it wrong. That overly optimistic number was apparently not optimistic enough for the BLS that wants to show signs of green shoots in the economy. Of course, the jobless rate also rose to 9.4%, so we’re still making history here…even if the dolts in the media and the stock market may be cheering on the news.

Frankly, I want to see where they dug up that number. I will do more research on this and get back to you on Monday.

Canada also prints a jobs report today. But that will take a third row seat to the U.S. Jobs Jamboree. Nevertheless, Canadian dollar investors will want to watch for any signs of the job losses to bottom out.

Speaking of Canada… I see where the folks at Morgan Stanley like the Canadian dollar / loonie, and Norwegian krone because of each respective country’s strong balance sheet.

Hmmm… Sounds like the researchers there have been reading my articles again! HA! But seriously, it’s nice to see other companies that spend large sums of money for research, come up with the same conclusions that little ole’ me comes up with! (Of course, I tend to come up with those conclusions a long time before they do.)

Euro Has the Green Light to Rise, While the Pound Looks to Plummet

The European Central Bank (ECB) and Bank of England (BOE) both kept their interest rates unchanged as I said briefly yesterday. I was looking for any sign the ECB president might mention the euro had risen to fast. However, Trichet didn’t mention the euro at all…so the single unit will get to pass Go and collect $200!

The BOE announced that they would keep their Quantitative Easing (bond buying) right where it’s at, with no rise, which surprised a few analysts that follow the BOE. This non-move allowed the pound sterling to stop the bleeding, but only momentarily. The political picture in the U.K. is dragging the pound sterling through the mud.

A fifth minister resigned yesterday, and on his way out he urged Prime Minister Gordon Brown to do the same! There is political uncertainty underway in the U.K., and political uncertainty is a recipe for disaster regarding a currency. That’s the case for the pound sterling right now.

A huge drop from the lofty figure of 1.65 earlier this week in pound sterling, has occurred. Recall, I told you I just couldn’t get my arms around why the pound sterling continues being so strong?

Here’s the proof that this pound rally isn’t going to last long…

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