Friday, September 03, 2010

Jobs report slightly positive so it's to the MOON for the markets.

The headline number of -54k jobs lost has to be adjusted for the 114k census jobs that were expected to go away. Thus, the "real" jobs number is probably closer to +67k but we will never really know because of a statistical anomaly (it has to do with seasonal factors, etc).

Anyway, the surface of this report is better than expected and stocks may rally on the initial report, but I'm wary of some of the details.

* "The number of long-term unemployed (those jobless for 27 weeks and over) declined by 323,000 over the month to 6.2 million." So did they all have a)rich uncle pass away. b) get jobs or c) just fell of the unemployment roll?

* "The number of persons employed part time for economic reasons increased by 331,000 over the month to 8.9 million." This continues a very negative trend.

* The birth/death model plug was a goofy 115k jobs again this month. It's unclear what impact this has on the final data but when the private sector adds only 67k jobs it's safe to assume this made up number has some impact on the data.

There were huge positive revisions for June and July data that I'll have to look into later. In all this should be viewed as a slightly positive report, but remember the last time we had a slightly positive report the market exploded for 300 points.

I'll post more thoughts as I read through the report.

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