Friday, April 03, 2009

Jobs - not terrible, but still ugly....

I don't think it's going to sway the bull market train (unless people decide to close their books early and sell to enjoy the beautiful East coast weather today), but here are the quick jobs numbers.

-663k in March
Unemployment 8.5%
U-6 - Total unemployed and underemployed hits 15.6%.

"Nonfarm payroll employment continued to decline sharply in March (-663,000), and the unemployment rate rose from 8.1 to 8.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Since the recession began in December 2007, 5.1 million jobs have been lost, with almost two-thirds (3.3 million) of the decrease occurring in the last 5 months. In March, job losses were large and widespread across the major industry sectors."

3.3 million jobs shed in 5 months! Wow.

One of my real hopes was that with a change in Administration we'd get a more forthright honest view of the world. Unfortunately, it appears the same fuzzy math continues at the Bureau of Labor Statistics.

Consider this series of facts presented to us today from the BLS:

"The construction industry lost 126,000 jobs in March, with declines occur-ring throughout the industry."

Seems likely enough as building has been curtailed across the U.S.

However, deep in the report the BLS magically adds 23,000 construction jobs back to the economy that it estimates were created, but just not reported yet. HUH??? Construction continues to tank but you think 23,000 jobs in construction are out there somewhere you just can't find them? Terrible. This Birth/Death model is the worst part of the jobs data. It turns into a monthly plug to fill any gaps in their data. Without the addition of 114,000 jobs that have been "created but not measured yet", the jobs number and unemployment numbers would be much, much worse. In this economy the idea that while the reality-based economy is contracting sharply, 100k+ jobs per month are being born at small businesses is just fantasy.

Truthiness lives on!!!

1 comment:

Anonymous said...

One has to really consider the effect of bad news as being a self fulling prophesy. The worse it sounds, the less people buy. The less people buy, the less retail staff and production we need.

The gov has a responsibility (perhaps) to use it's data in a manner that while not necessarily 100% false, is at the very least, averaged and massaged by legitimate empirical evidence that may be mutually advantageous.

After all, consider the potential effect on the market. If they make the news look really bad, people sell, it drives the market down, and everybody loses. Conversely if they make it seem "reasonably bad", people may hold (especially here at the 850 mark) and it may build from here with both renewed retail sales, and subsequent production.

That being said, no-one should buy the market at this point with anything more than 25% of their disposable cash.