Friday, April 06, 2012
A Bit Cross
Gosh, what an awful employment report. Household survey has the number of employed persons dropping. Emp/pop ratio back down to 58.5. Not in labor force increased by 333K, which explains the drop in unemployment.
The pace of retirements picks up hugely this year and next year, so that's going to take unemployment down regardless. That will be wonderful for younger workers trying to get a job, and underemployed workers trying to get a living-wage job or more hours. But fiscally it imposes another type of shelf.
What's really so crushing about this report is in the Establishment survey, in which retail employment dropped again. And in grocery stores. Okay - the grocery stores number is usually very reliable, and when retail employment starts dropping like this it is usually the final stage before an official recession is recognized. Temp help services dropped. Another early recession indicator.
So at this point I guess I would have to say that hippo is clutching at the stage curtain to stay up, and any moment we may hear a tearing noise....
The odds on my March hunch that January or February was peak just rose. Any chance that we can remain in skipping recession territory has to rely on a continued rise in auto production. Thirteen weeks into the year, YTD YoY rail total volume is down 1.7%, carloads down 2.5%, intermodal up 2.5%. Autos are still up, and the good sales in March are showing up in rail, but....
Looking at this report makes me think that January was peak. It's a very, very bad employment report.
PS: It's possible that seasonal adjustments, which were out of phase this year due to abnormal weather, pushed prior reports up on an SA basis nd made this one look worse in comparison. But that factor shouldn't affect things like temporary employment and retail employment that much.
If not for gallows humor, there would be no humor at all. Sigh.
I don't know to what extent this is true, but housing problems would certainly be exacerbated by an increase in unemployment...
There's always a huge turnover in jobs in this country, and the difference between recessions and expansions is really mostly in the number of new jobs created.
The pace of retirements picks up hugely this year and next year, so that's going to take unemployment down regardless. That will be wonderful for younger workers trying to get a job, and underemployed workers trying to get a living-wage job or more hours.
I gave that some thought and it made a great deal of sense to me. Seriously.
Unfortunately, curiosity got the better of me. I wondered if that was true in Japan.
Check this out. Sigh.
Housing has been a disaster and the stock market hasn't exactly juiced returns in the last decade.
So here's my question. What happens if older people can't afford to retire?
Picture the soon-to-be-retiree who had planned to earn a relatively safe 2000-style 3.5% real yield on 10-year treasury inflation protected securities.
That 3.5% return no longer exists. It's been replaced with a -0.16% return going forward.
What a difference a decade makes.
Dead Sea Kit
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