Beginning of cycle season
Another week and the rally continues. I suppose this is getting boring.
Let’s talk about the jobs number. It was horrible. I know, statistics can be deceiving, but you have to look under the hood to get it. They added 242,000 while the rate held at 4.9%. Wages declined, falling three cents, while the average work week also declined .2 hours to 34.4. Whatever happened to a 40-hour work week? Out of 242, the bulk of the jobs came from healthcare, retail and bars/restaurants, which were 57, 55 and 40.
That means 95,000 came from retail and bars/restaurants. That means the economy created 95,000 lower paying, likely part-time jobs. Are you happy yet? Then the big number is healthcare. This number is very misleading. We are not creating 57,000 doctors, not by a long shot. Doctors are actually getting out of the business.
All they are doing is robbing Peter to pay Paul, which is a big sink hole. The truth of the matter is that healthcare jobs are being created in a field that is not really growing—at least not by natural means, that’s for sure. To this point, according a Daily Signal article from Feb. 24 and other sources, the House Energy and Commerce Committee is investigating whether the Centers for Medicare and Medicaid Services violated the Affordable Care Act by diverting $3.5 billion intended for the Treasury to bail out health insurance companies to prevent an Obamacare death spiral.
Rep. Joe Pitts, R-Penn said, “The administration announced that they would be using billions of taxpayer dollars to make payments to insurance companies under the Obamacare reinsurance program. The announcement that the administration made represents an illegal wealth transfer from hardworking taxpayers to insurers and this law is very clear-$5 billion of reinsurance fees must be returned to the taxpayers.”
Why is something controversial like this in my weekly column? Whether you believe this is a partisan witch hunt is beside the point. The truth of the matter is that insurers are in financial trouble, but here’s my point: If GDP were better than 1% and we had good growth in the manufacturing sector, that would be one thing. When you have nearly 1/5 of the jobs being created from an industry that needs bailing out, bells and whistles ought to be going off in your head.
But you say that healthcare is creating jobs, and you would be right. However, consider this story.
I know of a gal who recently fell and broke her leg. She needed surgery to be sure her leg could heal properly. She did not have insurance because she either couldn’t or wouldn’t pay the high premiums with the high deductibles. She was told by the hospital the operation would cost $30,000. She wanted to negotiate and asked what they would charge if she paid cash. They told her $7,000—I am not kidding. She put it on a credit card. See, the hospital business will carry on no matter what because people still get sick.
I’m stressing the point because 152,000 of the 242,000 jobs created last month come either from an industry in trouble, retail or low-risk waiter/bartender-type work where the company doesn’t even pay minimum wage. Taken in those terms, compared to history at seven years off a major bottom, this is a HORRIBLE report. Sooner or later this will show up on the charts. It usually manifests negatively after the time window flips.