The disconnect between economic reality and media spin continues unabated. Now even the flimsiest of information suggesting things are getting worse at a possibly slower rate is treated as a sign of impending recovery. Witness the attempt to put a positive spin on the latest unemployment figures:
"In its good news-bad news report, the Bureau of Labor Statistics said that employers shed 345,000 jobs in May, far fewer than the 500,000-plus expected in consensus forecasts. Statisticians also revised April's figures to indicate 504,000 jobs lost, not the 539,000 that first had been estimated.
The strong May numbers and the revision of April's suggest that the pace of job losses is moderating. They point to an easing of the recession that began in December 2007 and has destroyed more than 6 million jobs. In May, 14.5 million Americans were unemployed.
Alan Levenson, chief economist for investment manager T. Rowe Price Associates in Baltimore, said the labor market was showing the first signs of recovery but he cautioned that not all was good in Friday's report. For example, the length of the average workweek fell in May to 33.1 hours, the lowest it's been since recordkeeping began in 1964.
The "dip in weekly hours, meager gain in hourly earnings" suppress production and income and carry implications for the economic recovery, he said in a research note. Rather than fire workers, many employers are slashing hours, freezing pay and requiring employees to take unpaid leave, all of which affect the quality of work life.
"The slowing of employment losses is certainly welcomed news. Before we celebrate, however, note that unemployment at 9.4 percent is substantially higher than what was expected in even the most pessimistic forecasts a few months ago," said Lawrence Mishel, the president of the liberal Economic Policy Institute in Washington. "Moreover, the pace of wage growth is less than half of what it was last year. Together, these trends suggest we're heading for very high unemployment and a subdued recovery."
Meanwhile Financial Armageddon points out that Wall Street insiders continue to vote with their feet in an ongoing sell-off of their own companies stocks:
"Just as telling, why are investors buying shares in corporate America when corporate executives -- the individuals on the ground who actually know what is going on -- are on the other side of the trade, as the Pragmatic Capitalist reveals (below) in "Despite "Green Shoots" Insider Sales Spike"?
The latest data on insider selling shows little relief in the relentless unloading of company stock by corporate insiders. In the last two weeks insiders sold over $335MM in stock vs listed insider purchases of just over $12MM. As has been the trend over the course of the last few weeks the list of insider selling has been long and the amounts have been staggering. The buy side, on the other hand, is represented by low rated, low priced stocks whose insiders rarely purchase over $500K.
One might think that with all of these “green shoots” the insiders at major U.S. corporations would begin buying up their own shares voraciously. Especially after a nice little run like we’ve seen lately. After all, with stocks still 35% off their highs and a full blown economic recovery (supposedly) on the horizon it would make nothing but sense than to buy your own shares, right?
Although there were signs of life in early May the overall trend in buying remains very low. As we’ve noted before it’s not the mountain of selling that most concerns us, but the total lack of buying. Insiders sell for many reasons, but they only buy their own stock when they are confident that the price will rise. As of now, insider buying remains incredibly weak which is more than likely a vote of (no) confidence in future business operations."
For a truly disconcerting veiw of ongoing economic collapse check out the U.S. National Debt clock, though I must warn that prolonged viewing may cause light headedness and vertigo as well as precipitate panic attacks in those predisposed.
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