Friday, November 07, 2008

Jobs Report

The numbers were pretty ugly any way you cut it -

-240k jobs
Aug and Sept revised down another -180k
Unemployment up to 6.5% (highest level since 94).

The market had an expectation of -200k jobs, so on the surface this looks like a huge disappointment, but people had cut their expectations pretty sharply since Wednesday morning so the fact that we didn't lose 350k jobs is probably a little bit of a relief.

Losing 1,000 points in two days positions the market for an interesting Friday - we could get a little relief rally or we could sell-off hard into the weekend. President-Elect Obama is speaking at 2pm so the markets may react to that as well.

Birth/Death Adjustment...
The rest of the blogosphere is going to rip the Bureau of Labor Statistics for this number again. The economy shed an estimated 240k jobs in October, but the BLS estimates that 71,000 new jobs were created by the formation of new small businesses? What? Who is forming a new business in this environment (other than certain witty bloggers in the North Country)?

The BLS projects that 43,000 jobs were created by new Professional/Business services, 30,000 in Education and Health Services, etc (this was the largest jump in both industries in over 18 months). I think someone needs to remind the BLS that their model is a Birth and DEATH model . Right now, there have to be more small businesses in professional/business services (mortgage brokers, appraisers, real estate agents, etc) going out of business than starting businesses. I continue to contend that this is plug number in their models to smooth out the data so that the employment situation looks better than reality would suggest.

But what do I know......



Anonymous said...

What Table can this be found in? Are these the preliminary numbers, or the finalized numbers?

The Artful Blogger said...

Here's the link.

The B/D adjustment has come down in recent months from the insane numbers posted last spring, but I still think there are more businesses dying than being formed so I think this way overstates job creation.