By now, you've had a few days to digest the "wonderful" jobs numbers reported from Washington last Friday.
Well, don't get too excited about the economy. We've been conned again.
First off, 59% of all jobs created this year are in 3 sectors: Leisure/Hospitality, Retail Trade and Administrative/Waste Services. Wages in those sectors have fallen by 0.7%. These jobs pay an average of $15.80 per hour versus the $23.98 average hourly wage. Which means "jobs creation" just equals cheaper labor.
The American jobs participation rate is at 34-year lows and falling, as people give up and leave the workforce.
Underemployment is between 14% and 15% and rising.
America still suffers from 2 million fewer jobs today than it did when the financial crisis started.
But perhaps worst of all is what I call the "part time-fication of America. And this is key to understand if you want to navigate the new American economy (and do well for yourself).
Thanks to years of punitive hiring regulations, taxes and Obamacare, American companies are going "part time." Meaning, Americans themselves are living on less and less.
USA Today, for instance, reports that the "ranks of part-timers have swelled to 791,000 people versus 187,000" since March. In other words, for every full-time job created over the past 6 months, there have been 4.22 part time jobs created.
Since the beginning of the year the data is even more graphic. According to Keith Hall of George Mason University's Mercatus Center, 97% of the net job creation has been part-time employment.
Despite the fact that denial is pandemic in Washington, ObamaCare is driving this in a dramatic demonstration of the Law of Unintended Consequences. Congress voted it in against the wishes of the vast majority of American people and is only just now - to paraphrase Nancy Pelosi - figuring out what's really in it.
Naturally companies are figuring this out first with the net result that millions of workers are being told they have to go part time (or else), because most companies don't want the healthcare costs dropped on them when they're barely able to survive as it is.
Here's the thing...even this isn't the whole story - in order to get to the meat of the problem facing our country now you have to go back about 50 years and look at the top companies then versus the top companies now.
The top dogs then were companies like U.S. Steel, GM, Goodyear and Standard Oil. Now they're companies like Wal-Mart, Google, Apple, McDonalds and UPS.
Can you spot the shift?
Make vs. Made Culture
In the 1950s, our country made stuff that the rest of the world needed. People had to come to us because they couldn't live without what we manufactured. Estimates suggest that as much as 70% of the world's economic activity was tied to companies within our borders.
Now it's the reverse. And the companies at the top of the list reflect this. Nobody actually needs these companies; what we need is inexpensive stuff that we can consume and throw away for which there is very little lasting economic value.
But these companies need international markets where, as I have long highlighted, the real growth is taking place. Today 80% or more of the world's daily economic activity is created outside our borders. Our companies have to go to there to grow.
So now what?
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.