Daily Archives: 6 September 2016

Employment and Interest Rates

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The US economy added 151,000 net new jobs in August, below consensus expectations for 180,000. Meanwhile, the labor force participation rate remained stable at 62.8%, as did the jobless rate at 4.9%, though it was expected to tick slightly lower to 4.8% for the month. The closely-watched U6 rate, or “underemployment” rate, which measures unemployed workers and those working part time for economic reasons, remained stuck at 9.7%.

The unemployment rate and the jobs numbers are misleading when taken out of context.  The context of importance here is the historically low labor force participation rate, from folks having given up looking for work, even though they’re perfectly viable potential employees rather than boomers who’ve retired (a number of whom actually have retired earlier than they wanted to and still would work, were there jobs).

Then there’s this, from Dan North, of Euler Hermes North America:

The most important part [of the report] is the weakness in hours and wages. That slammed the door on September [rate-hike chances].

I’ve said it before, and here I am saying it again: if the Fed wants 2% inflation, then it needs to stop chasing the market; it needs to stop focusing on jobs numbers, per se; and it needs to stop holding out for 2% inflation before it moves.  It needs to set its benchmark interest rates at levels historically consistent with 2% inflation and then sit down and watch.  Watch the economy recover, watch folks who’ve given up come back into the labor force, watch wage growth reappear, watch the labor participation rate, from that, recover to more normal levels; and watch the unemployment rate, still low, actually mean something.

And watch prosperity and productivity resume growing.

Early Stage Alzheimer’s?

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From the latest FBI document release last Friday, we learned or received a measure of clarification on a few things.

Democratic Party Presidential candidate Hillary Clinton told the FBI during the interviews that were the subject of the document release that

Clinton could not recall when she received her security clearance or whether it was carried over from her time in the Senate. She also could not recall any briefing or training by the State Department “related to the retention of federal records or the handling of classified information.”

And further,

Clinton recalled being briefed on Specific Access Program information (for classified material). But [she] could not recall any specific briefings on how to handle information associated with the SAPs[.]

And

she requested a secured BlackBerry while at State but could not recall why they were unable to provide one[.]

And

Clinton repeatedly claimed to have little training or understanding about the classification process—despite leading the department that handled such information on a regular basis and having a security clearance[.]

And this:

FBI agents also asked Clinton about three emails marked classified. They contained a “C” or portion marking, indicating the intelligence was at the lowest level, or confidential. Clinton said she thought the “C” was part of series like bullet points or a listing, like A, B, C.”

More than 30 times in the FBI’s Friday release, Clinton told the FBI agents interviewing her that she couldn’t remember this or that major briefing or training or similar event.

Recall that Clinton signed off on documents certifying that she had had security briefing when she became Secretary of State.  Recall that then-Senator Clinton served on the Senate Armed Services Committee, in which capacity she also was briefed and periodically trained in handling classified data and documents, and in which capacity she routinely handled classified data and documents.

Couple these memory lapses and instances of confusion with her deflections when reporters ask her questions that she doesn’t understand (back when she was interacting with them)—”You mean like with a cloth?”, her efforts to change the subject when told things she doesn’t understand, and her current months-long (more than 270 days) hiding from interactive meetings with the public (the TV interviews her campaign touts aren’t live; they’re “edited to fit the time slot”).

Assume she’s telling the truth about all of this, about her confusion concerning really quite routine classification protocols, about her not remembering.  Assume she’s not being evasive in response to simple questions when she deflects or changes the subject.

All of this may be why she’s hiding from interactive public meetings like press conferences.

All of this begins to look like Clinton is in the throes of early-stage Alzheimer’s.