Friday, January 4, 2008

More On Employment

Here are some notes on from several news sources on the employment numbers.

From CBS Marketwatch

U.S. seasonally adjusted nonfarm payrolls rose by 18,000 in December, the weakest job growth since August 2003, according to a survey of thousands of businesses, the Labor Department reported Friday.


Job growth was revised up by a total of 10,000 in November and October. Read the full report.

A separate survey of households showed employment plunging by 436,000, marking the biggest decline in five years. The number of unemployed adults rose by 474,000, pushing the unemployment rate up to 5% from 4.7%. Economists were expecting the rate to rise to 4.8% in December.


-- there was a limited upward revision to previous numbers.

-- the household survey got killed.

And then there was this little gem:

The jobless rate has risen 0.6 percentage points since March. "When unemployment rises by more than 0.5% from its cycle low a recession generally ensues," wrote Robert Brusca of FAO Economics.

From Bloomberg:

Excluding a gain in government jobs, payrolls fell last month for the first time since July 2003, hurt by losses in manufacturing, construction and the retail industry.

``This tells you that the strains from credit problems and so forth that have been developing the last six months are starting to bite and they're biting in a way that now finally draws consumption into question,'' said Neal Soss, chief economist at Credit Suisse Group Inc. in New York.

When the only reason jobs were positive is an increase in government jobs, you know there's a big problem.

And then there is this observation from Reuters

The department said that for all of 2007, payroll employment growth averaged 111,000 a month, down from 189,000 a month in 2006. President George W. Bush told Reuters in an interview on Thursday that he was considering stimulus measures to shore up the struggling economy but had not made any decisions.

In other words -- job growth is clearly slowing.

And Mish adds his comments about the birth/death model:

The BLS model has added jobs 12 consecutive months now even in financial activities in an environment where business capex spending has been weak, housing has been horrid, and over to 210 lenders have gone out of business or stopped writing loans according to Implode-O-Meter. In spite of horrible housing conditions, the BLS has assumed there have been more business expansions in 9 of the last 11 months in construction.

And finally, there is this from the above mentioned Bloomberg article:

``It's not a done deal, but if we're going to have a recession, it's too late to do anything about it,'' said Stuart Schweitzer, global markets strategist at JPMorgan Wealth & Asset Management in New York. ``The Fed can't prevent a recession if one's in the making, and we're pretty close.''

As I said below -- there is nothing good in this report.