by Egon von Greyerz, GoldSwitzerland:

The facts just don’t add up. US wages are falling, trade deficit is at 10 year high, debt is surging so are stocks and the US Government has again managed to publish a number of contradicting employment figures that make no sense whatsoever.



US Consumer Sentiment is the highest in 13 years. At the same time US October Household Employment Survey dropped 484,000 and the Labour Force shrank by 765,000. But due to manipulation of the figures, October payroll increased by 261,000 and the Unemployment Rate declined to 4.0% from 4.2%. The Labour Participation Rate is down to the 1977 level with only 62% of the population employed or looking for work.

How can anyone believe any of these figures which tell us Payroll increased and Unemployment declined at the same time as Employment and Labour force went down substantially. It must all be pure fantasy.


The Labour Participation rate is down from 67% in 1999 to 62% currently. The problem with the US labour statistics is that it conveniently disregards the 95.4 million people, a record level, who are able to work but are not working. The total US labour force capable of working is 256 million. Of those 161 million are actually working or actively looking for a job.

So the 95.4 million not working, many of which have given up looking for a job, represent 36% of the all those capable of working. So with fewer people working and with average workers’ real pay having declined since 1975, it is hard to understand that people in the US are feeling so optimistic.




Having recently visited the US, it is difficult to understand that the US consumer is the most confident in 13 years. I visited a few shopping malls including a major mall in Boca Raton, Florida with all the major department store chains plus all the speciality chains. Boca is an affluent area but still, virtually all stores were dead with lots of staff who had nothing to do. There was only one store which was packed which was Apple. The Microsoft store was also totally empty. The state of US retailing is clearly dire with 5X as much retail space per person as in the UK, a country which is also over shopped. With 6,700 planned closures so far in 2017, this industry is clearly haemorrhaging.

Retail is hit by the decline in real disposable income and also the development of online sales. Although the Amazon valuation has looked ridiculous for many years, maybe it is justified as this company eventually will have a total monopoly in many areas of retail with the exception of some specialty chains such as non-branded fashion.

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