April's Jobs Report - Lagging... and Leading?
For 16 months after a start, the current downturn has
now wiped out the most jobs, by far, of all Post WWII recessions -
Note:
Chart shows percentage decline in nonfarm employment 16 months after the start of each recession. This reflects the most recent data available for employment in the current recession.
Federal Reserve
Despite claims that the bottom is in, aggregate weekly hours worked has yet
to put in a decisive bottom, let alone any bottom, as it declined significantly
once again in the most recent reporting month (April). In all modern recessions,
this indicator has turned up decisively at, or even a little before, the official
NBER-determined recession's end. -
Interesting aside: Notice the "W" shaped recovery signal coming out
of the 2001 recession. A very large body of thought thinks that this
might be a "best-case" scenario for a recovery from the current slump.
Another look at the "2001" recession & "recovery" (Change by thousands)
And how the stock market likes a jobloss "recovery"
Image credit: $treet Authority
_Related Ponderables_
Why Unemployment Will Not Bottom Out in the Near Term
Mr. Yukos' 2/10 Effect Unemployment Scenario:
If there are 10 people working at a company and 2 are laid off, the remaining 8 will fear a similar fate. Those 8 people will then reduce their discretionary spending at home, eat out less, not buy the new TV, not buy the Abercrombie jeans, etc. The 2/10 effect then spreads to the local economy by those 8 people not spending as much, in addition to the 2 people that got laid off. This sends another ripple to those businesses where 2 employees for every 10 are laid off as well. You can imagine this happening on a grand scale quite easily. It gets more uncontrollable as time progresses.
Market participants are surrounded by green shoots. There's good data in retail numbers, LIBOR, existing home sales, job claims, and manufacturing. Though the radical level of quantitative easing is finally starting to flow to the consumer level, we are still missing one side of the equation: Demand...
Job Numbers from the Bureau of Spurious Statistics
"We're leveling off! We're leveling off!"-so is the hope of TTT, Helicopter Ben, Larry the Wall Street Lackey and the rest of Team Obama. "This recession is leveling off!"
No it's not: The unemployment figures just released by the Bureau of Labor Statistics are totally cosmetic: We lost a whole lot more than 531,000 unemployed.
* First, the "seasonal adjustment", which is a black box that can tweak me into looking like Dumbo the flying elephant. They're knocking off ±65,000 workers for no clearly discernible reason.
* Second, notice that the Census Bureau hired 60,000 people last month. Those workers (by definition) are temporary, and are a net cost to the economy, as they will not be adding marginal utility to any economic sector, the census being merely a social expenditure.
Those two items alone turn 530,000 new unemployed into 655,000...
now wiped out the most jobs, by far, of all Post WWII recessions -
Note:
Chart shows percentage decline in nonfarm employment 16 months after the start of each recession. This reflects the most recent data available for employment in the current recession.
Federal Reserve
Despite claims that the bottom is in, aggregate weekly hours worked has yet
to put in a decisive bottom, let alone any bottom, as it declined significantly
once again in the most recent reporting month (April). In all modern recessions,
this indicator has turned up decisively at, or even a little before, the official
NBER-determined recession's end. -
Interesting aside: Notice the "W" shaped recovery signal coming out
of the 2001 recession. A very large body of thought thinks that this
might be a "best-case" scenario for a recovery from the current slump.
Another look at the "2001" recession & "recovery" (Change by thousands)
And how the stock market likes a jobloss "recovery"
Image credit: $treet Authority
_Related Ponderables_
Why Unemployment Will Not Bottom Out in the Near Term
Mr. Yukos' 2/10 Effect Unemployment Scenario:
If there are 10 people working at a company and 2 are laid off, the remaining 8 will fear a similar fate. Those 8 people will then reduce their discretionary spending at home, eat out less, not buy the new TV, not buy the Abercrombie jeans, etc. The 2/10 effect then spreads to the local economy by those 8 people not spending as much, in addition to the 2 people that got laid off. This sends another ripple to those businesses where 2 employees for every 10 are laid off as well. You can imagine this happening on a grand scale quite easily. It gets more uncontrollable as time progresses.
Market participants are surrounded by green shoots. There's good data in retail numbers, LIBOR, existing home sales, job claims, and manufacturing. Though the radical level of quantitative easing is finally starting to flow to the consumer level, we are still missing one side of the equation: Demand...
Job Numbers from the Bureau of Spurious Statistics
"We're leveling off! We're leveling off!"-so is the hope of TTT, Helicopter Ben, Larry the Wall Street Lackey and the rest of Team Obama. "This recession is leveling off!"
No it's not: The unemployment figures just released by the Bureau of Labor Statistics are totally cosmetic: We lost a whole lot more than 531,000 unemployed.
* First, the "seasonal adjustment", which is a black box that can tweak me into looking like Dumbo the flying elephant. They're knocking off ±65,000 workers for no clearly discernible reason.
* Second, notice that the Census Bureau hired 60,000 people last month. Those workers (by definition) are temporary, and are a net cost to the economy, as they will not be adding marginal utility to any economic sector, the census being merely a social expenditure.
Those two items alone turn 530,000 new unemployed into 655,000...