Temporary Workers Vs. S&P500

Temporary workers are a leading indicator for a recession as they are easy to be fired.

Temporary workers Vs. Recession

Temporary workers are easy to fire and that's why they are a leading indicator for a recession.

Peter Schiff: The Effect of Obamacare

Listen to Peter explaining the jobs numbers released today.

I explained here that Obamacare will destroy full time workers.

When Obamacare rolls out in 2014, we will continue to see a shift to part-time employment as employers will fire full-time workers (>30 hours/week) and hire part-time workers (<30 hours/week) to avoid paying for Obamacare.

And you can witness that on this chart. See how the red chart edges upwards while the blue chart decreases in June 2014.

I also pointed out that this always coincides with a pending recession. We're still early, let's see how this trend will evolve later on.

Full-time Vs. Part-time Workers

When recessions hit, we historically see a conversion of full-time workers into part-time workers. This is visible in the recession of 2008-2009.

The increase in part-time workers is also visible in the chart below, which shows how many hours people work per week. We see that the average weekly hours dropped in the 2008-2009 recession and it is starting to drop in 2014. This means that a new recession is in the making in 2014. The key is to predict recessions by looking at the increase in part-time employment.

When Obamacare rolls out in 2014, we will continue to see a shift to part-time employment as employers will fire full-time workers (>30 hours/week) and hire part-time workers (<30 hours/week) to avoid paying for Obamacare.

Finally, part-time workers are a leading indicator for a recession as they are fired first.

Peter Schiff and Walmart

You've got to give Peter credit for this. Higher costs (labor costs or corporate taxes) in a business will always flow to the consumer. Because this is the only way a business can stay profitable. Of course, higher consumer prices are not sustainable, because the consumer won't buy your product. It's all supply and demand. Which means... 

...the other way to stay in business is of course to just fire the employees. See this Salman Khan video: