Why are stocks tanking? Government is killing the economy

"The May Jobs report was terrible" - Jill Schlesinger

As I stood on the set of CNN American Morning, I was nearly speechless as Christine Romans scribbled down the Bureau of Labor Statistics results for last month. The May Jobs report was terrible. Yes, there were 431,000 new jobs created, but don’t fall for this head fake. Of the jobs created, a whopping 411,000 were census workers hired on a temporary basis by Uncle Sam.

Let’s put that into perspective: the US economy needs to add something in the neighborhood of 125,000 jobs each month just to keep pace with new entrants to the work force and analysts believe that it will take a bunch of 250,000+ jobs a month to really put a dent in the unemployment rate. This was a terrible report.

Adding to the concern: those census workers who were happy to find income even on a temporary basis, will be let go in the coming months. In fact starting in June, the impact of the Census on the payroll report will be negative.

The other area that is worrisome is the stubbornly high number of long-term unemployed. There are 6.8 million people who have been out of work for more than 27 weeks, which constitutes 46% of the 15 million total unemployed. Did I mention that this was a terrible report?

I could find only two bright spots: the unemployment rate dropped to 9.7% from 9.9%, reflecting the departure of 322,000 from the labor force (not the greatest reason to see the rate drop) and the underemployment rate (including part-time and marginally attached workers) fell to 16.5% from 17.1%.