Friday, June 04, 2010

The jobs report pt.2

So the headline number was far below official estimates and WAY below the "whisper" numbers. Adding just 20k jobs, ex-census workers, means this is a very weak report.

The number of census workers hired was a little light, but the reality is that we were going to ignore that number anyway. The markets are taking a beating right now as the futures are off substantially.


The Bad:
* The labor force participation rate slipped again which helped lower the unemployment rate.
* Private employment was very weak across the board.
* The birth/death adjustment was a goofy +215k. Again, this implies that private industries - mainly in construction and leisure/hospitality - added 215k new jobs that just didn't show up at the BLS survey yet. It should embarrass the BLS to put out data like that. You can't just subtract these jobs from the report to get a "real" estimate, but it does make one question the validity of the report.


Good:
* Hours worked ticked up again.
* Temp Help was up again. I dispute that this is really a positive sign. In every previous recession businesses have used temporary help to bridge the gap as their business picked up, but I think temp help has become the new source of "just-in-time" employees and they will not be converted to permanent jobs.

Totally, off-topic, but has anyone noticed that HUNGARY has blown up in Europe over the past 2 days? Hungary's Credit Default Swaps have exploded over the past couple of days and their largest commercial bank just had trading halted after falling 10%. Austria, France and Germany have all seen their CDS's jump 20% (implying a greater credit deterioration) in just the past day! I think we've grown very complacent while Europe is still teetering on the edge. It would be very convenient for one of the many minor military skirmishes around the world - Koreas or Israel/Turkey/Ireland - to flare up and distract us from Europe's Lehman event.

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