Friday, February 04, 2011

With apologies to Milli Vanilli - "Blame it on the snow"

Again, ADP swings and misses wildly. ADP said 187k jobs were created in January on Wednesday, but the BLS data out today showed just 36k jobs. Lots of data to digest but here are the highlights:

* We'll blame it on the snow because it never snows in the Northeast in winter time.

* Change in Private Payrolls +50K (expectations were for +145k)

* Not-seasonally adjusted U-6 (unemployed, underemployed, part-time) jumped again from 16.6% to 17.3%.

* The civilian labor force declined from 153,690 to 153,186

* Labor force participation at 64.2%, the lowest since March March 1984

The declining participation rate is very disturbing. If the economy was turning, people would be coming back to look for work and participation should be increasing. The opposite seems to be true as more people seem to just be giving up.

We've already heard rumblings that the Fed is planning further actions if the economy weakens again. This number might further those thoughts and in the perverse world of Wall Street trading where Fed easing = weaker dollar = higher stock prices, this bad jobs number might actually boost stock prices today. Watch out for news on Egypt, Jordan, Saudi Arabia and Syria this weekend.

More to come....

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