Friday, January 08, 2010
From the household survey, total employment dropped 589,000 jobs, and unemployment dropped 73,000. The reaon is that the "not in workforce" cohort grew by 843,000 persons. Some of that is discouraged workers (see Table A-12), but a lot are retirees, most of 'em early. On a seasonally-adjusted basis, the employment/population ratio dropped from 58.5 in November to 58.2 in December. Fred at St. Louis has not loaded December's number yet, but so you can get an idea of the historical scale:
The number of persons unemployed for 27 weeks or more rose again from 38.7 to 39.8. Again, these numbers aren't yet loaded, but for a historical comparison:
The establishment survey showed that non-farm jobs dropped by 85,000, with almost all of the loss in goods-producing industries (81,000). Services lost 4,000 jobs, but (again in line with ADP) professional and business services gained 50,000, whereas government lost 21,000 jobs.
All in all, this is not as bad a report as the market will think in comparison to November's. We have seen the cross in business services, and temporary employment agencies added 47,000 jobs in December. Things are settling down a bit; our government will now do its best to unbalance the equation again.
On the other hand, you can consider this a preview of what will happen when the Census jobs really drop out in the second half. Then we will be left just with whimpering state and locals shedding jobs, and a groaning private sector will be left trying to carry the ball. The inventory correction is beginning to fade out of the system, and we are left with the underlying consumption/pass through in the economy - which is not too great given lower incomes.
PS: November unemployment for Europe was just reported as 10% too. You are going to see the same deal there - larger companies cutting to restore profit margins. The PPI/CPI gap pretty much guarantees more of this.
PPS: Here's the latest wholesale trade and inventories report:
That's for November, and that's pretty much it. Whatever we see in production over the next couple of months is all we are going to get. In numbers, US total sales were up 0.6% YoY (November 09/November 08), whereas inventories were down 11%. Durable sales were down 4.2% YoY, and durable inventories were down 16.1%. Nondurable sales (food, clothing, etc) were up 4.7% YoY, and nondurable inventories were down 2.2% YoY.
Once the inventory correction has moved fully through the system, we're left with the carrying wave. That's the danger zone on growth. There's a little left in autos, although a lot of that is benefiting foreign manufacturers.
I just looked at the underlying tables to see if the seasonal adjustment might have been off, and it does not appear to have been a factor at all.
We are losing private sector wage and salary jobs at a 400K rate steadily since August. It's not a good sign, given that the retail recovery (such as it is) is well underway, the debt is still out there, aggregate wages and salaries aren't recovering, and the inventory correction is about to fade out.
Oh, yeah, and the EPA keeps announcing further regulatory activities which will heighten cost burdens, and the cost of inputs is going up....
An article in the paper this morning said the EPA is going to decrease the allowable ozone limits for cities and counties to be in compliance with smog regulations. The limits they are going to use would put this mostly rural county I live in out of compliance. WTF! The article said it would cost billions for cities and counties to come into compliance, but eight to ten years down the road it would save billions in "LOWER HEALTHCARE COSTS." Once again - WTF!
How to extend and make a recession deeper. In one easy lesson.
If the EPA really has been set loose on us, and they go through with "reform" of health care and financial services, it'll be at least that disruptive--never mind the tax hikes already due to take effect next year.
I don't believe it's possible to be (or even run for) President without committing something that could be called "high crimes and misdemeanors". Hypocrisy is required, when we demand sainthood of our leadership. If they go through with this stuff, somebody's going to take advantage of that fact.
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