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The jobs market continues to improve, according to ADP's job loss estimate (top chart). The ADP figures have been tracking the the BLS numbers pretty well, and from eyeballing the chart it looks like we are very close—perhaps just a month away—from seeing net job gains being reported in both series. The Challenger count of announced corporate layoffs jumped last month, but as the second chart shows this is very typical even during times of strong economic growth (e.g., 2003-2005). A healthy economy is always experiencing some form of "creative destruction."
8 comments:
Scott,
For the past couple years, every Thursday morning the BLS has reported somewhere between 450,000 and 700,000 Americans are applying for unemployment for the first time EACH WEEK, week after week, month after month, quarter after quarter and now year after year.
This number doesn't even include the millions of independent contractors that have also lost their incomes.
It appears the only reason why the reported unemployment rate is so low is because the BLS has reduced the labor participation rate by millions despite a rising population potentially distorting the true picture.
Consistent with losing about 20% of the labor force is an OVER 20% reduction in income tax receipts over the same period.
THE BIG DIFFERENCE NOW compared to the past is very very few are hiring and many are closing open positions including traditionally "safe" jobs...... @ hospitals, schools, universities, cities, counties and states.
Don't you think with over 60% of architects unemployed and very few graduates being able to find a job, combined with practically everyone scaling back and wages being slashed.... this might be the worst job market in American history?
Alstry-
I can tell you this: If you a guy over 50, and looking for a job...keep looking. You will not get hired.
You can send out 100 resumes, abd get two negative responses. The other 98 do not bother to reply.
As health insurance in the United States is tied to employment, and long-term employment with one employer is dead, I wonder what the future will bring on this score.
Obama's plan is dead. But as more Americans age, you have to wonder what will happen.
I dont think the job market has improved at all. BLS stats are deceptive and we all know they don't really track real unemployment.
Especially when you see things like this from BLS:
The unemployment rate rose in 306 of 372 metro areas, the Labor Department said Tuesday. The rate fell in 41 and was unchanged in 25. That's worse than November, when the rate fell in 170 areas, rose in only 154 and was unchanged in 48.
I put about as much faith in the current 10% unemployment rate as I do in the 5.7% GDP growth figure touted this week.
just to reiterate a point:
U.S. May Lose 824,000 Jobs as Employment Data Revised: Analysis
http://www.bloomberg.com/apps/news?pid=20601109&sid=aNSc0oQ0vb4M&pos=10
Downward revisions to employment statistics have no bearing on the strength of the economy today or yesterday or last month or last quarter. The economy's strength is not measured very accurately by jobs to begin with. It is measured by corporate profits, credit spreads, the yield curve, commodity prices, energy consumption, etc.; by market-based indicators, not by government statistics. The market-based indicators are all telling us that the economy has improved significantly. If this keeps up, and I expect it will, sooner or later we will see the number of jobs increasing.
The Short View
John Authers
The world continues to move on every fresh rumour from the eastern Mediterranean. The latest word, that the European Union is stitching together a rescue package for Greece, galvanised markets yesterday.
Most of those moves are predictable. Stocks respond well to a fall in uncertainty. So do commodities.
But gold has been harder to explain or predict. It is supposed to be the ultimate insurance policy, a hedge against uncertainty. And yet it rallied yesterday, as optimism returned to markets. Before that, gold endured a correction as equities sold off, dropping 14.8 per cent after its peak in December of $1,226.56 per ounce.
Rather than operating as the inverse of stock markets, as a haven would, gold has moved in line with them. The precious metal suffered a sell-off during the market carnage of October 2008 and then enjoyed a rally even more impressive than the stock market’s, gaining 79.8 per cent from trough to peak.
Traditional explanations do not work. The trajectory of gold over this period roughly matches inflation expectations. It sold off during the deflation scare and recovered as inflation forecasts returned to normal. But this ignores gold’s long rally in the middle of the past decade when inflation expectations were very stable.
Rather, it is best to look at the gold price as an offshoot of speculation against the dollar. Investors have held gold as a store of value to guard against falls in the dollar. When the appetite for risk dipped last month, they bought dollars and took profits – where they could – by selling gold.
A more reliable guide from the commodities world has been copper*. The copper price, relative to gold, continues to be a great early indicator of sentiment about the economy. Falls in copper have preceded the equity falls of the past few years – and the fall in copper relative to gold at the beginning of this year turns out to have been a good early warning sign once more.
* ‘The Short View’ column in the FT (page 15) runs with a new metric to look at — the copper/gold ratio. The copper price reflects global economic activity and gold reflects financial stability. Indeed, we checked it out and the ratio does have a 95% correlation with movements in the stock market.
-David Rosenberg 2/10/10
Scott, What do you think of Dave's Blog?
John Authers
The world continues to move on every fresh rumour from the eastern Mediterranean. The latest word, that the European Union is stitching together a rescue package for Greece, galvanised markets yesterday.
Most of those moves are predictable. Stocks respond well to a fall in uncertainty. So do commodities.
But gold has been harder to explain or predict. It is supposed to be the ultimate insurance policy, a hedge against uncertainty. And yet it rallied yesterday, as optimism returned to markets. Before that, gold endured a correction as equities sold off, dropping 14.8 per cent after its peak in December of $1,226.56 per ounce.
Rather than operating as the inverse of stock markets, as a haven would, gold has moved in line with them. The precious metal suffered a sell-off during the market carnage of October 2008 and then enjoyed a rally even more impressive than the stock market’s, gaining 79.8 per cent from trough to peak.
Traditional explanations do not work. The trajectory of gold over this period roughly matches inflation expectations. It sold off during the deflation scare and recovered as inflation forecasts returned to normal. But this ignores gold’s long rally in the middle of the past decade when inflation expectations were very stable.
Rather, it is best to look at the gold price as an offshoot of speculation against the dollar. Investors have held gold as a store of value to guard against falls in the dollar. When the appetite for risk dipped last month, they bought dollars and took profits – where they could – by selling gold.
A more reliable guide from the commodities world has been copper*. The copper price, relative to gold, continues to be a great early indicator of sentiment about the economy. Falls in copper have preceded the equity falls of the past few years – and the fall in copper relative to gold at the beginning of this year turns out to have been a good early warning sign once more.
* ‘The Short View’ column in the FT (page 15) runs with a new metric to look at — the copper/gold ratio. The copper price reflects global economic activity and gold reflects financial stability. Indeed, we checked it out and the ratio does have a 95% correlation with movements in the stock market.
-David Rosenberg 2/10/10
Glen: could you point me to David's blog?
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