Friday, December 03, 2010

Should have known better...

EVERYONE was on the same page going into this jobs report. There were huge expectations that this number was going to approach 200k jobs and that the unemployment rate would start ticking down.

When everyone zigs we should be zagging. The numbers just hit the wire and they're fugly.

Jobs added 39k

Unemployment rate 9.8%

Healthcare and temp services added jobs

Retail trade, construction, manufacturing, and government fell.

Prior months were revised upward slightly and the birth/death model had almost no impact this month (thankfully).

All together this is a terrible jobs report.

Here's where it gets tricky - the market has roared higher the last two days as the US dollar has weakened because people have overcome their fears of the EU bailouts.

Will people sell into the rally after a terrible jobs report or will stocks surge on expectations that the FED will continue to pump money into the system to deflate our currency.

From an economic standpoint this report should take stocks lower, however, the expectation for future Fed money could prop up the game for awhile. Should be a fun day :)

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It appears that everyone is happy with the current tailspin in the economy because the stock market has reacted positively to today's disappointing jobs report. Terrible news = Fed easing = weak dollar = higher stock prices. Yeah, we all win - except for the 15 million or so unemployed.

A final recap:
+39,000 new jobs - remember the ADP data that got the whole market rallying on Wednesday showed +94k jobs. The ADP data has been terrible for close to 2 years now and I think we should really look at their methodology before reporting these numbers any more.

Unemployment ticked up 0.2 to 9.8%. What's distressing is that this wasn't driven my some massive move of people rejoining the workforce. In, fact the opposite occurred and unemployment still went up.

The average work week was unchanged at 34.3 hours in November and I think that leaves lots of slack in the system before hiring needs to resume.

The number of people unemployed over 27 weeks also jumped in November for the second consecutive month. This might just be a temporary set back but this is a troubling shift in the data for the long-term unemployed.

However, the ECB has joined the debt buying party (apparently buying bonds in €100 million blocks) and that has calmed the world for the week. We now return you to your regularly scheduled Ice Dancing with D List Celebrities.

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My favorite holiday stat so far:

"The worst of the cheery chocolate-laden delights? Starbucks' Peppermint White Chocolate Mocha. A venti made with whole milk and topped with whipped cream is a jolly 700 calories with 27 grams of fat (17 grams saturated fat) and 95 grams of sugar. According to the piece that is the equivalent of 17 ½ candy canes."

Cheers!

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