Some of last week’s weakness in the stock market was attributed to surprisingly week jobs report on Friday. Non-farm payrolls came in significantly below projections.

However, much of that weakness was explained by Hurricane Florence. And the headline unemployment rate dropped to 3.7% – the lowest in almost 50 years.

Much was made of that, while almost nothing was made of the rate of employment at 60.4% – also near 50-year lows.

Headline unemployment statistics continue to be, in our view, some of the most misleading numbers produced by the federal bureaucracy, and that is a very tall bar indeed.

The Bureau of Labor Statistics certainly knows how to cook the books. It’s remarkable how functionaries there can get away with reporting unemployment and employment rates simultaneously falling to near 50-year lows. Of course, both things cannot be true simultaneously true if there is an honest accounting.

Bureaucrats at the same agency have been equally as skilled at massaging the famed Consumer Price Index (CPI), which purports to measure price inflation. They have been using a number of clever devices to hide the full impact of rising prices for years. That fiction is about to get a lot harder for them to maintain, however.

For starters energy prices are on the rise. Oil prices bottomed in very early 2016, at almost the same time as gold prices – not coincidentally.

Natural gas prices may be getting ready to follow oil higher. The gas markets have been surging over the past few weeks. Sustained higher energy costs are going to translate to higher prices for anything that has to be farmed, mined, manufactured, or transported.

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