Stock Market Today: May 30th - June 3rd

not trying to put out clickbait on here but holy shitty data batman! lol *facepalm*

Spoiler: Americans Not In The Labor Force Soar To Record 94.7 Million, Surge By 664,000 In One Month

So much for that much anticipated rebound in the participation rate. After it had managed to rise for 5 months in a row through March, hitting the highest level in one year, the disenchantment with working has returned, and the labor force participation rate promptly slumped in both April and May, sliding 0.4% in the past two months to 62.60%, just shy of its 35 year low of 62.4% hit last October. This can be seen in the surge of Americans who are no longer in the labor force, who spiked by 664,000 in May, hitting an all time high of 94.7 million. As a result of this the US labor force shrank by over 400,000 to 158,466K, down from 158,924K a month ago, and helped the unemployment rate tumble to 4.7%, the lowest level since 2007.

Adding the number of unemployed workers to the people not in the labor force, there are now over 102 million Americans who are either unemployment or no longer looking for work.

Spoiler: 312K Full-Time Jobs Were Lost In Last Two Months, Offset By 118K Part-Time Hires

While we already assessed the quantitative aspect of today's jobs report, which we characterized as abysmal because even when factoring in the 35,000 Verizon job losses, there was some 130,000 unexplained layoffs (sorry, it wasn't the weather), it is time for a look at the qualitative aspects of the report. And, we are sad to report, that things here go from bad to worse: while in the recent past disappointing headline payrolls were at least offset by an improvement in full-time jobs, this did not happen in May. Instead, in what may have been a BLS "kitchen sink" month, the US government reported that in May 59,000 full-time jobs were lost. This, however, was "offset" by 118,000 part-time jobs as America's transformation to a part-time worker society is bag with a vengeance.

Worse, over the past two months, the US labor force has seen a whopping 312K full-time jobs lost, offset by 118K part-time job gains.





The longer-term trend also shows a clear reversal pattern as increasingly more part-time jobs are created to replace axed full-timers.



And keep in mind you ain't seen nothing yet: once the full impact of soaring Obamacare costs hits in a few months, business will scramble to reclassify workers as part-time to circumvent the law's profit-extracting limitations.

Spoiler: Where The Jobs Were (Not) In May, Or How Obamacare Saved The May Jobs Report

While we have already commented that the "awesomely bad" jobs report was just that, both qualitatively andquantitatively, one question is where the jobs weakness was most pronounced, i.e., which sectors saw the biggest drops in jobs in May. The answer: half of all job sectors posted a decline in May payrolls, a drop that was much broader than just the Verizon miss.

First, the sectors that posted growth were, the near-minimum wage education and health, which added 67,000 jobs in May, followed by Professional services adding 31K, government with 13K, and then another minimum wage boost coming from retail trade and leisure and hospitality, which added 11.4K and 11K respectively. Curiously, the BLS did not get the memo that Financial Activites are now laying off left and right and goalseeked the sector to a +8K jump.

On the downside the weakness was pervasive, and was focused on Information which lost 34K jobs, much of which was probably due to the Verizon strike, followed by that harbinger of labor demand, Temp Services which dropped by 21K, and then two very highly paid sectors in construction which lost 15K, and mining and logging which continues to bleed workers and lost 11K. Since reaching a
peak in September 2014, mining has lost 207,000 jobs, mostly due to the collapse in the US energy industry.

And here is the punchline: if it wasn't for the 55,400 healthcare jobs added in May, the headline jobs addition of 32,000 would have been negative. Thanks Obamacare?

Spoiler: US Services Economy 'Bounce' Dies - ISM/PMI Near "Weakest Expansion Since The Recession"

The brief April bounce in US Services economy has died as PMI slipped back to 51.3 as Markit warns "the service sector reported one of the weakest expansions since the recession." This weakness was followed by ISM Services which plunged to its lowest since Feb 2014, crushing the hopes of the April bounce. Employment plunged into contraction and New Orders tumbled, with the surveys pointing to GDP growing at an annualised rate of just 0.7-8% in the second quarter.

Bye bye April bounce!!





ISM Services Breakdown shows weakness across the board...





Seasonally-adjusted New Orders plunged...New Orders Index -5.7pts (biggest drop since Feb. 2008) to 54.2 (lowest since Feb. 2014).





Respondents did not offer much hope...

• "Projects from the oil companies are becoming less and less. Budget problems for capital projects."(Construction)
• "There has been a general slowing-down from the momentum we saw last month." (Professional, Scientific & Technical Services)
• "Slower start to the second quarter." (Arts, Entertainment & Recreation)
• "Holding steady. No real increase, but expansion plans on for late Q3 or Q4 in preparation for 2017." (Finance & Insurance)
• "Pending labor concerns to replace an aging workforce of highly-skilled staff support positions." (Educational Services)
• "High pressure on cost reduction due to declining top line sales." (Retail Trade)
• "Significant drop in shipments for the month. Estimate a decline of nine percent for the markets we serve. Overall retail traffic has slowed. Pricing has stabilized in the market." (Wholesale Trade)

As Markit noted, summarizing the disappointing state of the US Services economy:



“The service sector reported one of the weakest expansions seen since the recession in May,adding to signs that any rebound of the economy in the second quarter may be disappointingly muted.




“With optimism about the business outlook dropping to a new post-crisis low, companies are expecting conditions to remain challenging in coming months, citing uncertainty about the presidential election as well as broader worries about weak demand at home and abroad.



“Add these disappointing service sector numbers to the downturn now being seen in manufacturing, andthe PMI surveys point to GDP growing at an annualised rate of just 0.7-8% in the second quarter, notwithstanding any marked change in June.







“The slowdown and further drop in optimism continued to cause companies to pull-back on recruitment, with the survey signalling just under 130,000 extra jobs being created in May, driven entirely by the service sector.”

It seems like the last pillar of sustainable smoke and mirrors has broken.

Charts: Bloomberg

Spoiler: Factory Orders Scream Recession... And This Is How A Big Miss Was Avoided

Even without digging too deep into the factory orders number, it was dreadful: while "rising" 1.9% monthly, or in line with expectations, the series posted its 18th consecutive annual decline. A stretch of declines this long has never happened before in US history without the economy being in concurrent recession.





However, since we always enjoy peeking behind the headlines, we noticed something typically fishy. As noted above, the factory orders data met expectations of a 1.9% sequential increase. There was, however a catch. Taking a look at the headline factory orders series reported in June vs May, one notices a substantial revision lower to the series.





Zooming one one finds precisely how the Department of Commerce made sure the series "met" the expectations.

Because while Wall Street was expecting a bounce of 1.9% from the original March print of $458.4 billion, or a number which would have been $467 billion, instead it got a 1.9% bounce... from the downward revised $451.8 billion. In other words, instead of a "meet" of 1.9%, if one used the original April print, the sequential increase in May was only 0.5%.



Then again, with the US economy in recession, even we wonder why we are splitting hairs.

 

construction around my neighborhood is still going gangbusters ... when i moved down here in 2008 i was literally the only house on the street and was surrounded by all trees ... that is no longer the case now ... it looks dramatically different today ... i had my uncle visit here the other month and he last visited in 2011 i believe ... he couldn't even recognize my neighborhood ... that being said, i'm not sure my example would be a good gauge of overall construction ... but down here in the queen city it has seriously gotten busy as all hell in the 8 years i have been down here ... not really liking it to be honest ... i feel like i am back in jersey again =/