Do The Math

The Dow is flirting with 15,000 and the S&P is over 1615, apparently based on a payrolls report of +165,000 jobs. Missing in the euphoria is the reality of Obamacare, which has pumped up jobs at the expense of hours worked. In order to avoid healthcare costs, employers are cutting back employee hours to minimize the number of full-time workers as defined by Obamacare, for whom they would be required to buy health insurance. This shows up in a reduction of the average workweek, which fell by 0.2 hours to 34.4 hours. Doesn’t seem like much until you do the math. Multiply the 143,724,000 employed people by 0.2 and you get a loss of 28,744,800 weekly hours worked. Divide by 34.4 and you find that the loss of work is the equivalent of 835,600 jobs. So the reality is the economy lost the equivalent of nearly 700,000 jobs. Incidentally, full time employment (BLS definition, 35 hours plus) fell by 148,000. This will definitely leave a mark.

Oh, by the way factory orders fell 4.0% in March and the services ISM missed badly, coming in at 53.1. I guess the algos don’t do math, they just squeeze shorts when they can. The unfortunate consequence of this behavior is that it is more and more likely that we have to have a crash.

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