Friday, January 08, 2010

Jobs Report Disappoints

As I suspected yesterday, the crowd was getting excited about a potentially strong jobs report and that usually means the opposite is coming.

Here's the quick and dirty...

* Nonfarm payroll employment edged down (-85,000) in December, and the unemployment rate was unchanged at 10.0 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.

* The economy has lost almost 4.2 million jobs over the last year, and 7.2 million jobs since the beginning of the current recession.

* The most shocking number is the 661k people that dropped out of the workforce in December. Without removing these people from the workforce, the unemployment rate would have spiked in December.

Think about that for a moment if our economy shifted overnight and started adding 200k jobs a month, it would take 3 years just to get back to even.

In the past, I've said to watch the temporary help market for signs of an upturn, but I'm losing faith in that argument. Temporary help has ticked up over the past 4 months, but I think it's more a sign of how companies operate in 2010 than an indication of any strength in the economy. I think the specter of rising health care costs and other benefits is leading companies to do more "just-in time hiring/firing". The catch phrase "We're all Temporary now" will get more buzz in the coming years.

This report will calm any inflation fears so the market might react positively eventually, but the fact that there are no jobs is distressing.

Oh, by the way... unleaded gas is $2.96 here in Clayton and rising. I said it might take 2 weeks to get to $3, we might get there in a week.

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