The non-farm payrolls number came in at an incredible 287,000 jobs created in June. The shocking June non-farm payrolls report has some serious problems though that seem to suggest it could be fake.

I’m betting that the next jobs report in August will show a big downward revision.

Source: Econoday.com
Chart Source: Econoday.com

Something seems sort of fake about the non-farm payrolls report. How is it possible to go from 11K jobs one month (May was revised down from 38K to 11K), to 287,000 the next? Statistically, is that even possible?

Skepticism aside, here are the “details” of the report:

Leisure and Hospitality = added 59,000 jobs
Education and Health = added 59,000 jobs
Information Technology = added 44,000 jobs
Retail Trade = added 30,000 jobs
Professional Services = added 23,000 jobs
Government = added 22,000 jobs
Financial Services = added 16,000 jobs

There is another problem with the data. How could all of these jobs have been added while the Federal Reserve refuses to raise interest rates even another quarter point? If the economy was healthy enough to have the capability of adding 287,000 in a single month, the Fed would have already hikes rates in my opinion.

There is yet another problem with the non-farm payrolls report. How can the June average hourly earnings increase come in at only 0.1%? That’s right; average hourly earnings fell short of the expected 0.2% number. Statistically, the only way that is possible is if most of the jobs added were minimum wage jobs, and so they had a little impact on the average hourly earnings growth rate.

Finally, if the jobs report was so good then why are precious metals up so much?

gold-silver-charts

To borrow from Hamlet, “Something is rotten in the state of Denmark.”

Let me know in the comments section below if you think I’m completely off-the-mark here with my skeptical questions about June’s non-farm payrolls report.