Dec

7

D RFrom David Rosenberg's Morning Missive: "Especially since a key reason why the jobless rate dipped was because the ranks of discouraged workers who exited the labour force due to grim job prospects jumped 60,000 to 357,000 last month."

And yet one more whack from Mr. Rosenberg's commentary (stretching quotations to the bounds of fair use):

"As for the -11k print on Friday's headline payroll report, unadjusted, the number was +80k, which therefore goes down as the third softest November reading in the past 18 years. November is normally a month where between 300k and 500k workers find a job before the seasonal adjustment kicks in. Something to keep in mind. It's remarkable nobody talks about this; the big surprise in the payroll data was the service sector component; it rose 58k, but we know from the ADP report that service sector employment fell 81k, which was fractionally worse than the 79k decline in October. Such a discrepancy has occurred less than 3% of the time in the past, and each time, the following month after the big gap, there was a convergence … with headline nonfarm payrolls swinging 100k lower on average, which would imply a 111k decline when December's figure comes out. Also take note that the +58k print in the service sector payroll was completely at odds with the 41.6 reading in the ISM non-manufacturing employment index in November - a figure that in the past was consistent with a -192k tally in service sector payrolls and never before aligned with a positive number. Go back to the 2001 recession, and the worst ISM non-manufacturing jobs subindex was 43.9 (right after 9/11) and here we published a figure that was more than two points shy of that! So as we wonder how the headline number could only be -11k on Friday, there were some very lumpy increases in some very non-cyclical segments of the economy: Administration/waste management +87k Health/education +40k Government +7k The rest of the economy shed 145 jobs and the declines were spread across nearly 60% of the industrial base from retail, to transports, to manufacturing, to construction. For some reason, we didn't see this dichotomy mentioned anywhere in the weekend press. The Canadian employment, but beneath the surface, it also had its own peculiarities The Canadian employment data, while robust on the surface, also had its own peculiarities - like half the gain being in education (more teachers in November?); wages declining (even with a lower unemployment rate?); and the workweek contracting (more bodies, fewer hours - reverse of what we saw stateside)."


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  1. Craig Bowles on December 9, 2009 9:02 am

    If you add back in the discouraged workers that Clinton took out to the U6, unemployment is 21.8%. The stock market is following the 1930s as is the economy almost step for step. One of the most interesting macro talks I’ve heard is Congressional Oversight Panel’s Elizabeth Warren: The Coming Collapse of the Middle Class (from 2007 before being named to the panel).
    http://www.ritholtz.com/blog/2009/12/elizabeth-warren-the-coming-collapse-of-the-middle-class/

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