The US May employment report dashed the delusional hopes that the economic contraction would be mild or avoided altogether: apart from the headline figure – a drop of 49k jobs in May and five consecutive months of falling employment – the details were even uglier: unemployment rate up from 5% to 5.5%; falling employment also based on the household survey; falling temporary employment (a coincident rather lagging indicator of the job market; flat hours worked; falling employment in a broad range of industries; and a birth/death BLS estimate that overstates net job creation by new firms as it is still adding 217k in May alone that are likely to be drastically revised downward once the long delayed benchmark occur. So, an outright ugly job report.

Add to that oil prices going up $10 on Friday alone and $16 dollar in the last two trading days (+13%) and you get a double whammy: contracting economy via jobs and a stagflationary shock via oil prices.

Let us consider the consider the consequences of this double whammy...