The unspoken reality, tucked away by our liberal media, is the serious danger of our economy falling into recession. First-quarter gross domestic product was negative and we are scheduled to hear second-quarter growth rates on July 30th. 

In advance of the key metric will be June’s unemployment report. We could see revisions from previous months in addition to a softer than expected number. July 2nd is the scheduled release date. 

With respect to unemployment, you really need to think about what the 280k of jobs in May represent – seems big and like a lot of jobs are being created. In the same BLS report for May, it is revealed that over 397k people actually joined the workforce. That’s our future right there, the countless mass of mellinials who either make it and enter the workforce or strike out and live at home with their families for 5-10 years. This phenomena is becoming a cultural norm and it forces parents to postpone retirement. 

Think about it – many factors are working against us here – workforce is gaining more younger entrants, while those experienced and skilled are finding it more difficult to get proper placement. Underemployment and part time workers are the norm. 

Yet our stock market climbs. Easy money policies have helped, but there is no other precedent to current policy that could help signal any kind of turning point in the markets or for employment levels. 

The Federal Reserven is focused solely on the metrics – unemployment rate must fall. There is no perspective or accountability for the quality of our workforce. Participants in the labor force (the denominator in the unemployment rate) is at historic lows. That’s a big time contributor to our current 5.5% rate. It will likely continue to decline, with all officials patting themselves on the back for a job well done. It’s kind of like that CEO who has a ton of stock options set to expire and he executes slash and burn cost cutting to make profits look good for a couple of quarters… He then leaves with a pocket full of sunshine, while the company starts to deteriorate due to a lack of resources needed to thrive. If you build 10 widgets with 2 people per day, you layoff one of the workers and force the other to work unpaid overtime to make 8 per day – you just can’t sustain that type of model long term. 

This isn’t a rant against capitalism, as those types of companies are held to account in the end. But who will hold our government accountable? They are doing the same thing with unemployment and workforce employment quality. Eventually, all of the new part one workers won’t be able to sustain their households. 

The fundamental root causes were never addressed or even identified. Instead, Government led financial engineering and manipulation was the tool of choice. Some blame Bush for this response. The failure of imagination and leadership on Obama and his crew’s part was in not realizing that this was only meant to be a short term response – not long term policy. 

I’ll be looking into consumer debt levels next – will report out on findings. For now though, if you are in the market, keep at it and just watch out for the July 30th report on GDP.