The Sept Jobs Number – Self Directed IRA Update

The Sept 2012 jobs numbers came out and shows a decline in unemployment to 7.8% — down from 8.1%. Really? Does this seem plausible. The net number of new jobs created was 114,000. That is a very low, weak number and is not even enough to maintain steady state for the overall economy.

So what’s going on here?

There is much in the way of speculation, commentary, and conspiracy theory regarding this number. Seems politically convenient from a timing perspective as it relates to presidents re-election. However, we are not going to go so far as to say that there is a conspiracy here on the part of the president or the government. What we are going to say is that the BLS (Bureau of Labor Statistics) is using inconsistent and poor methods in their month to month reporting.

The BLS is altering assumptions and methods on a monthly basis. Because of these practices, and their associated adjustments, you can see significant swings in the numbers on any given month.

Our interpretation of the labor numbers

Bottom line, any one with common sense and who is a participant on our labor market and economy intuitively knows that we did not magically see some major improvement in labor or the economy last month. The reality is that labor participation is the lowest since WWII. Its is estimated that 25% of the labor force is no longer engaged in the work force .

What this means for your self directed IRA

Labor is weak. Economic growth is anemic (sub 2%). Inflation is taking hold – just ask people in California who are seeing $5-$6 gasoline. These latest jobs/unemployment figures are not true and accurate and will only mislead you. We do not see any statistically significant changes or improvements in the economic outlook.

We continue to recommend holding physical precious metals in your self directed IRA. We still believe that there are good, significant real estate investment opportunities developing in key markets and that these should be included in self directed IRAs.

Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.