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Bitcoin Miners Are Moving Out Of China

The bitcoin mining hub has slowly been losing its dominance in the global hash market.

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The bitcoin mining hub has slowly been losing its dominance in the global hash market.

Over the past few weeks, Bitcoin markets have had to deal with a swarm of bad news coming out of China.

It started with rumors that miners in Sichuan had gone offline after the province limited energy-intensive industrial activities, such as Bitcoin mining.

Then came a joint statement by three of China’s top financial self-regulatory organizations reminding the public of the country’s 2017 ban on crypto assets. Then it was reported that for the first time, the Chinese State Council, headed by President Xi Jinping’s top economic advisor, was cracking down on mining.

To top things off, last Sunday the Chinese state-run news agency Xinhua published a negative article on crypto assets, denouncing their risks relative to traditional investment tools.

While there have been multiple factors contributing to this sell-off, one thing is undeniable: there is something brewing in China. Whatever it is, this series of events has led market participants to fear for Bitcoin’s future, especially as it relates to mining.

To get to the bottom of this, let’s follow the money.

The great thing about Bitcoin’s financial transparency is that it enables us to evaluate how miners are responding to all of this, in realtime. But before we delve into the actual mining data, it’s important to do a quick recap of how miners interact with Bitcoin and how we can measure that.

One of the biggest misconceptions about Bitcoin mining is that it is, to quote Elon Musk, “highly centralized, with supermajority controlled by handful of big mining (aka hashing) companies.” This is objectively false. In reality, what we call mining nowadays is a highly layered activity.

In order to increase their odds of success, miners collectively contribute their resources to so-called mining pools. Pools represent large groups of individual miners that work together mining the very same block. When a pool successfully mines a block, it is awarded 6.25 newly issued BTC plus all fees paid by users to have their transactions included in that block. After collecting a service fee, the pool then distributes the proceeds to individual miners.

Tracking what happens to newly issued bitcoin can yield meaningful insights into the collective behavior of both mining pools and the individual miners operating within them. In order to discern these two very different actors, Coin Metrics has produced a set of aggregate metrics that serve as proxies.

As a proxy for mining pool behavior, we aggregate data from all “coinbase” transactions: the first transaction of every Bitcoin block (not to be confused with the exchange). As a proxy for individual miner behavior, we aggregate data one hop from that transaction, i.e., all transactions that received funds from the coinbase.

At a microscopic level, if you track what happens after one hop, the notion that Bitcoin mining is centralized is shattered. In fact, there are many transactions beyond one hop that have dozens of recipients, which may be indicative of layered structures even at the individual miner level. One theory is that several mining operations are joint ventures where partners may have complex payout structures. As such, measuring anything over one hop becomes more challenging and subjective.

Now that we have covered how aggregate miner behavior can be measured on-chain, let’s take a look at the data.

What is the on-chain data telling us? Before individual miners can effectively sell their coins, they must create a transaction that sends funds to an exchange, an over-the-counter desk, or even directly to the buyer albeit in rare circumstances. In any of these scenarios, we would see an increase in the flow of funds being sent from individual miners (one hop) to other addresses.

The chart below shows exactly that. Aggregate flows sent by miners are at the highest levels since March 2020, when markets crashed at the onset of the COVID-19 pandemic. This supports the hypothesis that the latest sell-off was by Chinese miners that have sold part of their holdings in order to escape the latest wave of enforcement actions by the Chinese Communist Party.

Although what they receive on a daily basis is small compared to global BTC volume, the data showcased above suggests that when miners are likely selling (an increase of “flows sent”), markets respond negatively.

Remember that miners are also speculators. Even though what they receive in miner rewards is small in USD terms relative to the volume of global BTC markets, they do hold BTC on their balance sheets. In times of uncertainty, when they expect to need cash, their collective actions affect the market.

Now put yourself in the shoes of a Chinese miner that might have to move to a different country. Regardless of the scale of your operations, you will likely need cash to finance that move. The good news is that this is a temporary phenomenon. As with previous spikes in flows sent, the market impact was short-term and close to coincidental.

Another interesting on-chain behavior worth highlighting is miners’ potential concerns towards centralized exchanges in light of the CCP’s crackdown. The current sell-off coincides with thousands of bitcoin being withdrawn from major exchanges and deposited to miner addresses, as shown below.

Interestingly, the CCP’s current crackdown on mining also coincides with a time of the year where some Chinese miners move their operations from Inner Mongolia to Sichuan. This 2,000km migration is motivated by the beginning of the rainy season in Sichuan, which increases the capacity of its hydroelectric power plants, thereby decreasing electricity costs.

It has been observed that the rainy season in China contributes to an increase in hash rate, a metric that indirectly tracks the resources being allocated to Bitcoin. However, if the CCP’s hawkish comments on mining in fact translate to enforcement actions, this seasonal migration might be impacted, and hash rate might see a drop from current levels.

If the CCP’s hawkish comments on mining in fact translate to enforcement actions that further motivate miners to emigrate from China, we might see a contraction in hash rate from current levels.

While it is still unclear how the Chinese mining community is tactically responding to this development, the market has reacted negatively in light of a potential decrease in hash rate. But if a decrease were to occur, how would this impact Bitcoin?

What if Hash Rate Crashes?

Another gigantic misconception about mining is that daily hash rate figures can provide an authoritative view of when miners are pulling the plug. This frequently generates panic, as people struggle with the notion that a large portion of miners have suddenly gone offline. Another Musk quote illustrates this misconception well when he claimed that when “A single coal mine in Xinjiang flooded, almost killing miners, […] Bitcoin hash rate dropped 35%.”

In reality, hash rate is not a precise metric. Hash rate formulas were designed to estimate how many computational resources are being allocated to a network on a given day. But there is a keyword that is often omitted in the metric’s name: implied. It’s called “implied hash rate” because it is impossible to get a precise daily change figure by solely looking at on-chain data.

If you look at the average daily Bitcoin implied hash rate on Coin Metrics’ dashboard (what people usually just call hash rate), you will see that large (35%+) fluctuations occur frequently.

Crypto media outlets often take advantage of hash rate fluctuations with sensationalist “BTC HASH RATE DROPS X%” headlines, but daily implied hash rate is, by its very design, a volatile metric that is not suitable to track lasting changes in the mining landscape.

The reason for this volatility is that all daily hash rate formulas are highly sensitive to how long blocks have been taking to be mined over a given lookup window. Since mining is an unpredictable process (a Poisson process to be precise), there is a probability that a Bitcoin block could take an hour to be mined without miners necessarily having gone offline (albeit a low-probability event).

In the example above, a probable event would push daily hash rate estimates down considerably, even in the event that no changes in the mining landscape have actually occurred. If you want to understand this more deeply, take a look at the formula we created at Coin Metrics to attempt to calculate daily implied hash rate figures, in the trillion of hashes per second (TH/s) unit.

As you can see above, all daily hash rate formulas, including Coin Metrics’, are highly sensitive to block times. Blocks that take longer to be mined decrease the block count in the 24-hour lookup window and push the implied hash rate downwards. Similarly, if blocks were found at a faster rate, which can also happen without new miners coming in, an increase in block count would push the implied hash rate upwards.

The only way to decrease the impact that these probable events have on hash rate estimates is to increase the measurement window. That is not to say that we need to abolish the 24-hour, 144-block, hash rate estimates. We just need to stop using it to make assertive claims about actual changes in hash rate when attempting to measure miner behavior.

If you want a more accurate representation of changes in Bitcoin’s hash rate, a much better metric is the one-month implied hash rate. As the name entails, this version of hash rate encompasses changes that might have taken place on a rolling 30-day window.

This metric looks much better on a time series because it filters out all of the noise that is naturally produced by large (but probable) changes in block creation time. As such, it is a much better suited metric to track mid to long-term changes in Bitcoin’s hash rate.

One-month implied hash rate is a better suited metric to track mid to long-term changes in Bitcoin’s hash rate because it filters out all of the noise that is naturally produced by large (but probable) variations in block creation time.

Just like the one-day hash rate metric, the one-month implied hash rate is also free to use. You don’t even have to sign up to check it out. Make sure to forward this to the next crypto journalist that uses one-day hash rate changes as click-bait.

So, what does all of this mean for Bitcoin?

Going through this hash rate exercise is important because we might be heading into a drastic shift in the composition and geographic location of Bitcoin miners if additional crackdowns by the CCP take place. And we will need accurate data to track the impact of a potential mass migration.

In doing research for this piece I reconnected with a fellow Bitcoiner based in China who thinks stronger enforcement action by the CCP is a matter of when, not if. This sentiment is shared by other industry analysts with much deeper expertise in deciphering the CCP’s actions.

It is no coincidence that The People’s Bank of China (PBOC) is scheduled to launch its own coin at some point this year. And Bitcoin is at complete odds with the tightly controlled digital yuan. Thankfully, the people of China will still be able to access Bitcoin through VPNs. Bitcoin will continue to be there for them should they ever need it — regardless of where Chinese miners relocate to.

Most importantly, this is a gigantic opportunity for Bitcoin to address two of its most frequently overblown criticisms: its reliance on Chinese miners, and the carbon footprint that this reliance entails. We have seen an overwhelming number of Environmental, Social, and Governance (ESG) initiatives pop up as direct responses to concerns around Bitcoin’s carbon footprint.

With this in mind, the timing of the CCP’s latest wave of regulatory scrutiny could not have been better. The ensuing miner exodus currently taking place is one of the most positive fundamental developments for Bitcoin in 2021. Even if we see short term drops in monthly implied hash rate figures as miners emigrate, it would be for an important cause.

A huge focus of our work at Coin Metrics these days is to monitor the health of various crypto networks. Beyond metrics like hash rate, we actively track network attacks, such as 51% attacks, across major PoW networks. If you are concerned about Bitcoin’s susceptibility to attacks in light of a potential short term drop, rest assured: you shouldn't be. It is very unlikely that a decrease in monthly implied hash rate figures would meaningfully impact Bitcoin’s security.

Bitcoin currently overpays for its security by a wide margin if you consider the sheer amount of electricity and hardware resources that would be required to successfully attack it. Even if monthly implied hash rate were to drop in half and essentially go back to levels not seen since November 2019, the network would still be incredibly resilient against attacks.

The only meaningful impact a decrease in hash rate would entail would be longer block times. This happens when the mining difficulty parameter is too hard relative to the number of miners online, which leads to blocks being mined at a slower rate. While the network might become more congested as result, Bitcoin naturally readjusts difficulty roughly every two weeks so this would be a short-term phenomenon.

On the other hand, if we don’t see a considerable decrease in monthly implied hash rate, but miners still geographically disperse, Bitcoin will have become substantially more decentralized at the expense of short-term price volatility. A good trade if you ask me.

This is a guest post by Lucas Nuzzi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.

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Economic Earthquake Ahead? The Cracks Are Spreading Fast

Economic Earthquake Ahead? The Cracks Are Spreading Fast

Authored by Brandon Smith via Alt-Market.us,

One of my favorite false narratives…

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Economic Earthquake Ahead? The Cracks Are Spreading Fast

Authored by Brandon Smith via Alt-Market.us,

One of my favorite false narratives floating around corporate media platforms has been the argument that the American people “just don’t seem to understand how good the economy really is right now.” If only they would look at the stats, they would realize that we are in the middle of a financial renaissance, right? It must be that people have been brainwashed by negative press from conservative sources…

I have to laugh at this notion because it’s a very common one throughout history – it’s an assertion made by almost every single political regime right before a major collapse. These people always say the same things, and when you study economics as long as I have you can’t help but throw up your hands and marvel at their dedication to the propaganda.

One example that comes to mind immediately is the delusional optimism of the “roaring” 1920s and the lead up to the Great Depression. At the time around 60% of the U.S. population was living in poverty conditions (according to the metrics of the decade) earning less than $2000 a year. However, in the years after WWI ravaged Europe, America’s economic power was considered unrivaled.

The 1920s was an era of mass production and rampant consumerism but it was all fueled by easy access to debt, a condition which had not really existed before in America. It was this illusion of prosperity created by the unchecked application of credit that eventually led to the massive stock market bubble and the crash of 1929. This implosion, along with the Federal Reserve’s policy of raising interest rates into economic weakness, created a black hole in the U.S. financial system for over a decade.

There are two primary tools that various failing regimes will often use to distort the true conditions of the economy: Debt and inflation. In the case of America today, we are experiencing BOTH problems simultaneously and this has made certain economic indicators appear healthy when they are, in fact, highly unstable. The average American knows this is the case because they see the effects everyday. They see the damage to their wallets, to their buying power, in the jobs market and in their quality of life. This is why public faith in the economy has been stuck in the dregs since 2021.

The establishment can flash out-of-context stats in people’s faces, but they can’t force the populace to see a recovery that simply does not exist. Let’s go through a short list of the most faulty indicators and the real reasons why the fiscal picture is not a rosy as the media would like us to believe…

The “miracle” labor market recovery

In the case of the U.S. labor market, we have a clear example of distortion through inflation. The $8 trillion+ dropped on the economy in the first 18 months of the pandemic response sent the system over the edge into stagflation land. Helicopter money has a habit of doing two things very well: Blowing up a bubble in stock markets and blowing up a bubble in retail. Hence, the massive rush by Americans to go out and buy, followed by the sudden labor shortage and the race to hire (mostly for low wage part-time jobs).

The problem with this “miracle” is that inflation leads to price explosions, which we have already experienced. The average American is spending around 30% more for goods, services and housing compared to what they were spending in 2020. This is what happens when you have too much money chasing too few goods and limited production.

The jobs market looks great on paper, but the majority of jobs generated in the past few years are jobs that returned after the covid lockdowns ended. The rest are jobs created through monetary stimulus and the artificial retail rush. Part time low wage service sector jobs are not going to keep the country rolling for very long in a stagflation environment. The question is, what happens now that the stimulus punch bowl has been removed?

Just as we witnessed in the 1920s, Americans have turned to debt to make up for higher prices and stagnant wages by maxing out their credit cards. With the central bank keeping interest rates high, the credit safety net will soon falter. This condition also goes for businesses; the same businesses that will jump headlong into mass layoffs when they realize the party is over. It happened during the Great Depression and it will happen again today.

Cracks in the foundation

We saw cracks in the narrative of the financial structure in 2023 with the banking crisis, and without the Federal Reserve backstop policy many more small and medium banks would have dropped dead. The weakness of U.S. banks is offset by the relative strength of the U.S. dollar, which lures in foreign investors hoping to protect their wealth using dollar denominated assets.

But something is amiss. Gold and bitcoin have rocketed higher along with economically sensitive assets and the dollar. This is the opposite of what’s supposed to happen. Gold and BTC are supposed to be hedges against a weak dollar and a weak economy, right? If global faith in the dollar and in the U.S. economy is so high, why are investors diving into protective assets like gold?

Again, as noted above, inflation distorts everything.

Tens of trillions of extra dollars printed by the Fed are floating around and it’s no surprise that much of that cash is flooding into the economy which simply pushes higher right along with prices on the shelf. But, gold and bitcoin are telling us a more honest story about what’s really happening.

Right now, the U.S. government is adding around $600 billion per month to the national debt as the Fed holds rates higher to fight inflation. This debt is going to crush America’s financial standing for global investors who will eventually ask HOW the U.S. is going to handle that growing millstone? As I predicted years ago, the Fed has created a perfect Catch-22 scenario in which the U.S. must either return to rampant inflation, or, face a debt crisis. In either case, U.S. dollar-denominated assets will lose their appeal and their prices will plummet.

“Healthy” GDP is a complete farce

GDP is the most common out-of-context stat used by governments to convince the citizenry that all is well. It is yet another stat that is entirely manipulated by inflation. It is also manipulated by the way in which modern governments define “economic activity.”

GDP is primarily driven by spending. Meaning, the higher inflation goes, the higher prices go, and the higher GDP climbs (to a point). Eventually prices go too high, credit cards tap out and spending ceases. But, for a short time inflation makes GDP (as well as retail sales) look good.

Another factor that creates a bubble is the fact that government spending is actually included in the calculation of GDP. That’s right, every dollar of your tax money that the government wastes helps the establishment by propping up GDP numbers. This is why government spending increases will never stop – It’s too valuable for them to spend as a way to make the economy appear healthier than it is.

The REAL economy is eclipsing the fake economy

The bottom line is that Americans used to be able to ignore the warning signs because their bank accounts were not being directly affected. This is over. Now, every person in the country is dealing with a massive decline in buying power and higher prices across the board on everything – from food and fuel to housing and financial assets alike. Even the wealthy are seeing a compression to their profit and many are struggling to keep their businesses in the black.

The unfortunate truth is that the elections of 2024 will probably be the turning point at which the whole edifice comes tumbling down. Even if the public votes for change, the system is already broken and cannot be repaired without a complete overhaul.

We have consistently avoided taking our medicine and our disease has gotten worse and worse.

People have lost faith in the economy because they have not faced this kind of uncertainty since the 1930s. Even the stagflation crisis of the 1970s will likely pale in comparison to what is about to happen. On the bright side, at least a large number of Americans are aware of the threat, as opposed to the 1920s when the vast majority of people were utterly conned by the government, the banks and the media into thinking all was well. Knowing is the first step to preparing.

The second step is securing your own financial future – that’s where physical precious metals can play a role. Diversifying your savings with inflation-resistant, uninflatable assets whose intrinsic value doesn’t rely on a counterparty’s promise to pay adds resilience to your savings. That’s the main reason physical gold and silver have been the safe haven store-of-value assets of choice for centuries (among both the elite and the everyday citizen).

*  *  *

As the world moves away from dollars and toward Central Bank Digital Currencies (CBDCs), is your 401(k) or IRA really safe? A smart and conservative move is to diversify into a physical gold IRA. That way your savings will be in something solid and enduring. Get your FREE info kit on Gold IRAs from Birch Gold Group. No strings attached, just peace of mind. Click here to secure your future today.

Tyler Durden Fri, 03/08/2024 - 17:00

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Wendy’s teases new $3 offer for upcoming holiday

The Daylight Savings Time promotion slashes prices on breakfast.

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Daylight Savings Time, or the practice of advancing clocks an hour in the spring to maximize natural daylight, is a controversial practice because of the way it leaves many feeling off-sync and tired on the second Sunday in March when the change is made and one has one less hour to sleep in.

Despite annual "Abolish Daylight Savings Time" think pieces and online arguments that crop up with unwavering regularity, Daylight Savings in North America begins on March 10 this year.

Related: Coca-Cola has a new soda for Diet Coke fans

Tapping into some people's very vocal dislike of Daylight Savings Time, fast-food chain Wendy's  (WEN)  is launching a daylight savings promotion that is jokingly designed to make losing an hour of sleep less painful and encourage fans to order breakfast anyway.

Wendy's has recently made a big push to expand its breakfast menu.

Image source: Wendy's.

Promotion wants you to compensate for lost sleep with cheaper breakfast

As it is also meant to drive traffic to the Wendy's app, the promotion allows anyone who makes a purchase of $3 or more through the platform to get a free hot coffee, cold coffee or Frosty Cream Cold Brew.

More Food + Dining:

Available during the Wendy's breakfast hours of 6 a.m. and 10:30 a.m. (which, naturally, will feel even earlier due to Daylight Savings), the deal also allows customers to buy any of its breakfast sandwiches for $3. Items like the Sausage, Egg and Cheese Biscuit, Breakfast Baconator and Maple Bacon Chicken Croissant normally range in price between $4.50 and $7.

The choice of the latter is quite wide since, in the years following the pandemic, Wendy's has made a concerted effort to expand its breakfast menu with a range of new sandwiches with egg in them and sweet items such as the French Toast Sticks. The goal was both to stand out from competitors with a wider breakfast menu and increase traffic to its stores during early-morning hours.

Wendy's deal comes after controversy over 'dynamic pricing'

But last month, the chain known for the square shape of its burger patties ignited controversy after saying that it wanted to introduce "dynamic pricing" in which the cost of many of the items on its menu will vary depending on the time of day. In an earnings call, chief executive Kirk Tanner said that electronic billboards would allow restaurants to display various deals and promotions during slower times in the early morning and late at night.

Outcry was swift and Wendy's ended up walking back its plans with words that they were "misconstrued" as an intent to surge prices during its most popular periods.

While the company issued a statement saying that any changes were meant as "discounts and value offers" during quiet periods rather than raised prices during busy ones, the reputational damage was already done since many saw the clarification as another way to obfuscate its pricing model.

"We said these menuboards would give us more flexibility to change the display of featured items," Wendy's said in its statement. "This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants."

The Daylight Savings Time promotion, in turn, is also a way to demonstrate the kinds of deals Wendy's wants to promote in its stores without putting up full-sized advertising or posters for what is only relevant for a few days.

Related: Veteran fund manager picks favorite stocks for 2024

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Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the…

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Inside The Most Ridiculous Jobs Report In Recent History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

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