Pieces to the Puzzle

Monday, April 8, 2013 – 01:30 p.m.

The March employment report, released by the U.S. Department of Labor last Friday, would seem to have caught all the so-called experts off guard.

The country added a paltry 88,000 jobs. A number that was about half of what was expected.

A more troubling statistic was the number of people who reportedly left the workforce. About a half-million Americans were removed from the active labor force. The adjustment helped bring the official published unemployment rate (U-3) down to 7.6%. The official U-3 rate doesn’t take into account those Americans who have stopped looking for work, or who have only landed part-time gigs.

The labor-force participation rate, the percentage of people eligible to be working or looking for work, fell to 63.3 percent. This number is the lowest since 1979.

The 7.6% unemployment rate would have been higher, if the participation rate had remained unchanged.

The interesting point here is that for the past several years the jobs market has shown positive traction in January and February. Afterwards whatever perceived employment recovery falls off the cliff. What made the know-it-all forecasters miss the mark this year is unclear at this point.

The reality is the economy has only incrementally improved, and that improvement has only been in certain areas.

Just think about it! The number of Americans on food stamps and social security disability is at a record high. Yet, the spin, of late, is the sky is blue and grass green.

The perceived real estate recovery? This has come at the hands of investors buying up low to moderately-priced properties. Real supply and demand principles aren’t truly in-play here. New and existing home buyers have had serious trouble qualifying for loans, due to more stringent underwriting standards put in effect since the 2007-2008 collapse.

It doesn’t take a rocket scientist to see that the new business of America is government. The fact remains that, due to budget pressures alone, big government is stilling shrinking, and likely to shrink for some time.

Smart money investors, who are currently driving up stock prices, are doing everything possible to cajole mom and pop investors back into the market, so they in-turn can pull their money back out.

The movie “Slaughterhouse Five” comes to mind.