This morning the July US jobs report missed optimistic forecasts and June’s previously reported number was revised lower. Most significantly, the labor force participation rate ticked down once more while personal income grew less than hoped and June’s income numbers were revised down as well. The real economy is WEAKENING, not strengthening, and yet central banks are at the end of their magic tricks.
Mohamed El Erian was trying to explain this to the CNBC crew yesterday. As one listens to Joe Kernen mock El Erian for being concerned about disconnected stock prices for the past couple of years as stocks have continued to rise, it is worthy to note that Kernen (a former stockbroker) has been permeating perpetually bullish comments about stocks since the late 90’s as listeners have suffered heart wrenching volatility in exchange for zero real gains. But of course, no one ever holds CNBC to task for their risk-hyping machine that helps insiders pump and dump their stocks onto gullible viewers.
A tapering of the Federal Reserve’s $85-billion-a-month bond-buying program this year is “almost a given,” but there won’t be enough economic growth to justify the reduction, Pimco’s Mohamed El-Erian told CNBC on Thursday. Here is a direct link.