John Ransom
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The market got more bad news that’s good news- but not good in the sense that it actually helps you, me or anyone else- when the new jobs reports came out on Friday.

This "good news is bad news is good news" thing is getting tiresome. It's part of what our friend Mike Shedlock calls the Obamcare Effect.  

(Editor's Note: In honor of Labor Day, I'm not laboring. Please enjoy this timely column from last month)

First the barely good news.

The report showed that despite the dire warnings from federal bureaucrats, politicians and K Street lobbyists, the jobs market didn’t fall apart because Republicans forced the government to spend less than it planned.

“U.S. job growth accelerated in June thanks to a big jump in hospitality and service workers,” said CNBC, “according to a report that is likely to trigger more debate about how aggressively the Federal Reserve will begin pulling back on monetary easing. Unemployment steadied at 7.6 percent for the month, as nonfarm payrolls grew by 195,000, according to a closely watched Labor Department report Friday. Economists expected 165,000 more jobs and a decline in the unemployment rate to 7.5 percent.”

Unemployment “steadied”? Well not quite. It actually went up, way up, as we’ll see below. 

The bad news for the market is that as jobs growth expands, it’s more likely that the Federal Reserve will stop pumping an estimated $85 billion in new money into the stocks and commodities markets, commonly known as Quantitative Easing.

That means that markets will start to have to trade on it’s own merits. Not every trader will get a ribbon now. And that means Wall Street will have to figure out a different way to rig the game.

The real bad news is that job growth is being driven by policies coming from Washington, mostly Obamacare.

And of course, like anything else D.C.-related, the Democrat policies have it exactly backwards. 

While it’s true that job growth was robust, it came from the growth of PART-TIME jobs, which are the only kind available. On a net basis, the economy lost 326,000 fulltime jobs.

Obamacare changes the definition of full time employment to 30 hour a week from 32 hours and requires companies over a certain size to purchase health benefits for all fulltime employees. As a result, companies are doing what we all knew they would: They are cutting fulltime employment and replacing it with part-time help.

There was some hope this phenomena, which Shedlock calls the Obamacare Effect, was mostly over in the employment arena.

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John Ransom

John Ransom is the Finance Editor for Townhall Finance.
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