- by New Deal democrat
On Wednesday, some commenter named "New Deal democrat" took up Prof. Brad Delong on a bet at his blog. Prof. Delong said, based on the ADP report, that less than 130,000 jobs would be added in November. This eeedjyut NDD threw a dart and predicted +190,000. So, this week's big number had to be the very disappointing +39,000 jobs report this morning. U-3 unemployment went back up to 9.8%. The average workweek declined -0.1 hours. Overtime was flat. The manufacturing workweek, one of the ten LEI, was also flat.
In addition to 11,000 workers laid off in government, there were another 15,000 laid off in manufacturing, and 28,100 lost in retail. Government losses, alas, were expected. Manufacturing losses are probably the coincident fruits of the decline in the manufacturing component of the LEI over the summer.
All was not bleak. YoY hourly earnings were up 1.6%. Aggregate hours worked increased 0.1%. Much more importantly, both September's and October's numbers were revised higher - a pattern that has persisted now for 11 of the last 12 months. September's original report of -95,000 including census losses has been revised upward +71,000 in the last two months to -24,000. October's good report was also revised up to +172,000. Last month, the final revisions to August turned that report, which also included census losses, from -54,000 to -1,000, a gain of +53,000.
Since the NFP report today seems to contradict the flood of good new reports we've seen in the last months, why do I suspect that in two months' time this report will look substantially different? I may yet have my revenge on Prof. Delong!
(Seriously, I do expect that this report will be revised substantially upward. More Monday.)
Now let's take a look at this week's high frequency data:
Gas at the pump declined two more cents to $2.86 a gallon. This is about $0.15 above its average from a few months ago. A barrel of Oil increased to $86 this week. Gasoline usage reamins lower than last year, 8.867 B gallons vs. 8.943 B a year ago. Gasoline stocks are still back into their normal range for this time of year. Over the longer term, gasoline usage still remains about 5% below its rate from the first half of the past decade.
The Mortgage Bankers' Association reported that its seasonally adjusted Purchase Index increased 1.1% last week, rising to a another post-April high, and for the first time in ages actually exceeed its level of a year ago, by 2.7%. Meanwhile, the Refinance Index came to an abrupt halt, decreasing 21.6% from a week ago, showing the dramatic effect of increased mortgage rates (to which this index is, not surrisingly, very sensitive).
The BLS reported 436,000 new claims. The 4 week moving average fell to 431,000. Five of the last six weeks have shown 440,000 or fewer new claims. It certainly appears that we are moving into a lower range.
The ICSC reported same store sales for the week ending November 27 increased 3.5% YoY, the best showing in several months, and were also up 0.5% week over week. Shoppertrak reported that "Black Friday weekend" sales were flat compared with last year.
Railfax for the fourth week in a row showed a slight decline in the advance over last year's loads for all sectors. Motor vehicles and housing materials remained slightly ahead of last year's rate. I understand that retailers ordered holiday shipments early this year, because of bottlenecks and delayed shipping last year, so a word of caution about over-interpreting the recent relative decline.
The American Staffing Association reported for the week ending November 20 another increase to 101.0. This metric now exceeds every other year for the same week except 2007. In the next few weeks this index will decline substantially, but the question will be how far in comparison with last year.
M1 was up 1% for the week, up 2.3% vs. last month, and +8% YoY, meaning "real M1" is up 6.8%. M2 was up less than 0.1%for the week, 0.4% vs. last month, and 3.2% YoY, meaning "real M2" is up 2.0%. Real M2 is not going down, but it is making very little progress towards breaking out of the "red zone" below +2.5% YoY.
Weekly BAA commercial bond rates decreased 0.08% last week back to 5.95%. This compares with yields on 10 year bond yields down-.05%. This does not indicate any stress on corporate bonds.
The Daily Treasury Statement showed that this year set a new record for November tax recesipts, at $138.9 B in receipts vs. $127.7 B a year ago, a gain of 11.2 B or 8.9% (but bear in mind there was one more reporting day this year than last. Nevertheless, this November's pace set a new record for the month, 2.0% above the previous record from November 2007 (which is less than the 4.6% inflation since then). Since the real, seasonally adjusted bottom in tax receipts took place no later than October 2009, this also marks the first advance over an increasing absolute number from a year before.
Finally ... my post yesterday about DK certainly hit a nerve, as there have been over 20 comments. If you haven't, I encourage you to read them all. One of the reasons I added the "recent comments" section at the right is so that commenters could continue to discuss something after it has scrolled out of view, so feel free to do so. Obviously, you are not alone. And to those who said that after Bonddad left, there was no more decent discussion of the economy on DK ... errmmm, {{clearing throat}}... personally, I feel insulted. But have a nice weekend!
