Michael Pento continues:
“This has, in turn, caused investors to once again
wonder when the Fed would finally stop buying assets from banks and raise
interest rates, which have been at zero percent for over four years. But the
data on initial claims has been distorted by seasonal adjustments at the Labor
Department.
On an adjusted basis, initial jobless claims for the
week ending January 19th dropped to 335k, which was the
lowest level since January 2008....
“However, the raw data offers a different take on the
labor condition. The unadjusted claims totaled 436,766 in the week ending
January 19. That was 20k HIGHER than the 416k claims
reported in the comparable week of 2012. The question is, how can initial
claims be higher this year than the same week as last year; yet at the same time
register the lowest level in 5 years?.
Other data on the jobs front confirms the view that
the labor market is not improving substantially whatsoever. From the January
Empire State Manufacturing Report released last week: “Labor market conditions
remained weak, with the indexes for both the number of employees and the average
workweek remaining below zero for a fourth month in a row.”
And then there is this from the Philly Fed’s
Manufacturing Survey: “Labor market conditions at reporting firms deteriorated
this month. The employment index, at -5.2, fell from -0.2 in December. The
percentage of firms reporting decreases in employment (16 percent) exceeded the
percentage reporting increases (11 percent). Firms also indicated a decrease in
the average workweek compared with last month.”
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