Revisiting last week's employment report

• The total supply of available labour rose 137,000, but private NFP payrolls only rose 64,000 and excluding Census workers, employment fell 18,000. Houston, we have a major problem.
• The workweek was flat and so were wages. In real terms, household incomes are now contracting.
• The employment diffusion index slipped below the 50 cut-off level for contraction-expansion (54.1% to 49.8%). While job openings may be up, new hirings are clearly down. The JOLTS data flagged the same thing
• Full-time jobs collapsed 106,000 and are down in each of the past four months, and by a million — when this happens, the economy has been in recession almost 90% of the time. Businesses love their cash more than their workers.
• Those working part-time because the economy is weak jumped 353,000 — the sharpest increase since the depths of the last downturn in February 2009. This is weighing heavily on work-based incomes.
• The number of discouraged workers who dropped out of the labour market soared 9% to a record high 1.2 million.
• Nonfarm private sector employment in the Household Survey sagged 279,000, the largest decline for the year. This result validates the weakness seen in the ADP survey.
• The U6 unemployment rate spiked to 17.1% from 16.7%, back close to an all-time high. Massive slack in the jobs market is infinitely more important to the pricing process than the action in commodities. Notice which of the two won the deflation

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