Dec

16

Jobs Surrogate, from Bill Rafter

December 16, 2010 |

Payroll tax receipts are a very good surrogate for jobs. The data is daily with a 1-day lag. It is reported by the Treasury rather than the BLS, and is NEVER revised. It does have the disadvantage of being presented raw rather than seasonally-adjusted, a fact which keeps many from considering the data. The series tends to lead the unemployment numbers (which are the opposite side of the coin) by some four to five weeks. All of the above is a repeat announcement. Now the news: At this time the growth/slope of that data is decidedly negative, almost to the point of being scary in our opinion. This is not what we expected and put it out as a word of caution. Of course, remember that the economy is not the market.

Scott Brooks adds:

Two anecdotal observations:

1. My insurance brokerage clients and insurance industry clients are reporting that their workers comp premiums are down and not coming up.

2. My small business clients that are hiring are reporting that they are having a very difficult time hiring at the lower end of the pay scale. They simply can't compete with unemployment benefits that are paid for doing absolutely nothing. People would rather earn slightly less money without the hassle or expense associated with actually working.
 


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