Friday, October 02, 2009

Disappointing (but realistic) jobs report

The market has taken a further leg down on this news and is going to need some shift in sentiment to prevent another triple digit decline (maybe a Chicago winning bid at 1pm?). The headline number of -263,000 jobs is about 90,000 jobs worse than consensus but let's dig a little deeper to see what the report reveals....

1) The volatile birth/death adjustment (which seeks to capture new jobs created but not yet observed by the BLS) was just +34k for the month. The smallest "plug" in over a year and while I'd argue that this number should probably be negative, it is a step in the right direction to show it adding fewer jobs (down from 118k "jobs" in Aug)

2) Some early indicators for changes in the economy all look bleak: Temporary help (back down to spring levels), hours worked (back down to 33), construction hiring down 64k, etc.

3) U-6, the measure of all unemployed and underemployed workers is now up to 17%. Given the number of discouraged workers and the number of people that are vanishing from the market, I think it's safe to say the real number here is closing in on 20%. This is a staggering number.

Maybe we can all work selling CHICAGO 2016 shirts to tourists (on a separate note, this late push for Chicago could have some pretty far reaching international ramifications. Brazil and South America really feel it is their turn and if they are shunned again --- possibly for good reason as their presentation was apparently terrible --- it could impact trade relations over the next couple of years).


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