Tags: geller | irrational | payrolls | gains

Expert: Stock Market Gains Are 'Totally Irrational,' Recession Looms

Stock prices have shot up over 300 points in three days alone, which is "totally irrational," says Dan Geller, chief research officer for the Money Market Index economic barometer.

While the economy added more jobs than expected in July, at 163,000, households during that month shed even more at 195,000, according to government data.

Plus many of those jobs created were likely temporary, which actually bodes poorly for the U.S. economy.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

"The rally on Friday after the release of the employment figures and the consumer confidence index really has no economic merit," Geller tells CNBC.

"It's totally irrational."

Many new jobs were created in the hospitality sector, which would include temporary waiters and bartenders.

Temporary services added more jobs as well.

Not enough lasting jobs were created, while personal spending remains weak.

"If we are going to continue on the path we are now on we are likely to see a recession by the end of the year," Geller says.

"Unless something drastic happens to increase consumer confidence or reduce the level of anxiety, we will see a recession."

Other experts have looked beyond the number of jobs created during July to the number shed by households.

"It's marginally better on the balance. More importantly we have a drop in household employment, which is not such good news," said Stephen Stanley, chief economist at Pierpont Securities, Stamford, Connecticut, according to Reuters.

"Even with the better-than-expected payroll number, it's not sufficiently big enough to change the big-picture view. The economy is growing but not at a satisfactory rate to bring down unemployment."

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

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