Jobs Picture: Not Good

Headline print: -263,000

My estimate: -259,000


Net revisions to the previous 2 months negative as well.

Non-Farm Payrolls: Historical

Not a very impressive run for the last few years. Shedding jobs for the sake of increased margins is great for shareholders, not so good for households.

Non-Farm Payrolls

According to the monthly BLS report, the economy lost 216,000 jobs last month. This was better than the consensus loss of 230,000 and certainly better than my guess (loss of 262,000). However, the BLS revised the June number and July number: 20,000 more jobs lost and 29,000 more jobs lost respectively. Oddly enough, that totals 265,000. My gut tells me that my numbers will be close to the revised value.

The cumulative job losses since December, 2007 are essentially the same between the two surveys: 6.8 million for ADP & 6.809 million for BLS.

The last two weekly unemployment claims coincide with the survey period for the September BLS tally. As it stands, I believe we are heading for another loss of at least 200,000 jobs.

ADP Jobs Report

ADP reported that businesses cut another 298,000 jobs last month. The data for the previous two months was revised slightly upwards, mitigating this worse than expected report. Forty-nine percent of the job losses were in the service providing sector.

Since & including 12/2007:

- 6.8 million jobs lost

- average monthly job loss of 324,000

- 19 consecutive months of losses

The economy now has the same amount of jobs as it did in December, 2003.


For what it's worth, I am forecasting that the BLS will report a loss of 262,000 on Friday. If my forecast is accurate (and that is a big if...):

Recession Recession Change In Start End Non-Farm Payrolls Nov-73 Mar-75 -1.62% Jan-80 Jul-80 -1.07% Jul-81 Nov-82 -3.08% Jul-90 Mar-91 -1.13% Mar-01 Nov-01 -1.21% Dec-07 ? -5.01%

This is a recession not like many others. The above table tracks the job loss (according to the BLS) during the last few recessions.

Workers Continue To Lose Jobs: ADP Report

371,000 jobs were lost in July according to today's ADP Employment Report. June was revised to a loss of 463,000 jobs (previous estimate was -473,000). The goods producing sector continues to fare much worse than the services sector, losing 4 times as many jobs on a percentage basis.

= Since (and including) 12/2007: 6,543,000 jobs lost

= 18 consecutive months of job losses (average loss of 368,000)

= The economy now has the same number of jobs as it did in March, 2004

The BLS will release its report on Friday. My guess: loss of 355,000 jobs

Weekly Jobless Claims: More Seasonal Impacts

Initial jobless claims came in an 554,000: just around the consensus estimate. Back on July 9, I mentioned that seasonal adjustment factors would distort this number for a few weeks. Starting with next weeks report, the number will jump dramatically higher. In fact, if next week's factor was applied to this week's report, the number would have been 669,000 !!!!!

The same can be said for the continuing claims number, although to a lesser extent. I have also noted in past posts that this number becomes tougher to interpret because we don't know why this number is falling; new jobs or expiration of benefits?

In summary:

UNEMPLOYMENT INSURANCE DATA FOR REGULAR STATE PROGRAMS

---

	Advance				Prior1
WEEK ENDING	July 18	July 11	Change	July 4	Year

---

Initial Claims (SA)	554,000	524,000	+30,000	569,000	413,000
Initial Claims (NSA)	580,944	671,242	-90,298	581,145	411,408
4-Wk Moving Average (SA)	566,000	585,000	-19,000	607,000	393,000

	Advance				Prior1
WEEK ENDING	July 11	July 4	Change	June 27	Year

---

Ins. Unemployment (SA)	6,225,000	6,313,000	-88,000	6,904,000	3,165,000
Ins. Unemployment (NSA)	6,231,108	6,173,940	+57,168	6,061,619	3,164,970
4-Wk Moving Average (SA)	6,541,500	6,674,000	-132,500	6,774,250	3,176,000

---

Ins. Unemployment Rate (SA)2	4.7%	4.7%	0.0	5.2%	2.4%
Ins. Unemployment Rate (NSA)2	4.7%	4.6%	+0.1	4.5%	2.4%

Weekly Jobless Claims: Take Note of Seasonal Factors

Initial jobless claims fell below 600,000 for the first time since late January. This came in lower than most estimates. Continuing claims resumed their upward climb, eclipsing 6.8 million in this week's report.

It is worth noting that the seasonal factors for the next 2 weeks (this week's report as well) are considerably different from the last few weeks. In fact, if the same factor from last week as used in this week's report, the initial claims figure would have been 637,000!

This is one of the major reasons why one week's worth of data is of nominal importance.

The below link will bring you to the whole report:

http://www.dol.gov/opa/media/press/eta/ui/current.htm

Update: Job Losses & Recessions

Start	End	Change
Nov-73	Mar-75	-1.62%
Jan-80	Jul-80	-1.07%
Jul-81	Nov-82	-3.08%
Jul-90	Mar-91	-1.13%
Mar-01	Nov-01	-1.21%
Dec-07	?	-4.68%

More Jobs Data: Weekly Claims

Initial claims came in on the screws: 614,000 vs. estimate of 615,000.

Continuing claims came in a bit lower than forecast. This number is showing signs of having hit a peak 3 weeks ago. However, as I have mentioned in previous posts, it is important to know why the number is falling. If it is falling because people are finding jobs, great. If it is falling because people's benefits are expiring, not so good. Thirty-four states (and D.C. & P.R. as well) are offering extended benefits to those still looking for jobs. Those hopeful citizens are not included in this tally. I am trying to quantify.

Employment Thursday?

Non-farm payrolls fell by 467,000 in June. This was considerably more than the consensus estimate of a loss of 350,000 jobs. However, it was only 17,000 more than my estimate of 450,000 (!). Revisions to the previous months were mixed & minor.

- 18 consecutive months of job losses

- 6,340,000 job losses since & including 12/2007

- Employment now stands at the same level as 9/2004

Employment Situation: ADP Jobs Report

Job losses exceeded estimates: 473,000 vs. expectations of 390,000.

The miss was mitigated by upward revisions to previous months.

- 17 consecutive months of job losses

- 6,206,000 job losses since & including 12/2007

- Employment now stands at the same level as 4/2004

New Math, Obama Style

http://money.cnn.com/2009/06/26/news/economy/how_many_stimulus_jobs_created/index.htm?section=money_topstories

Is stimulus creating jobs? Yes but.....

The above article concerns the number of jobs created by the stimulus package. Aside from actual hiring by the government, I'm not sure how one quantifies the number of jobs saved. Anyway, the White House has a formula that equates each $92,000 of stimulus funds to a job saved/created. OK then, here is my math:

6,000,000 jobs lost during this rec(depr)ession

$92,000 of stimulus needed per job

$552 billion of stimulus to get back to even on the jobs front

If the entire balance of the Recovery Act ($787 billion) was perfectly accessed to create jobs, the total would be 8.5 million.

When was the last time the federal government performed with perfect execution? Also, consider the fact that $650 million was spent on the analog to digital tv converter box program (spent on additional coupons and such). I doubt those funds saved over 7,000 jobs.

Jobless Claims

Another disappointment for the green shooters: 627,000 initial claims & 6,738,000 continuing claims in this week's report. In addition, the previous report's numbers were revised higher: more initial claims and more continuing claims than previously estimated. However, the revision to the continuing claims number was not enough to continue the record streak.

The IUR is still 5.0%, suggesting that corporations feel little need to add workers. Initial claims have now exceeded 600,000 for 21 straight weeks. With the revisions to the previous week's data, my first guess at the June payroll losses is 450,000.

Equity futures are trading around the overnight lows.

Weekly Jobless Claims

Reported initial jobless claims were in in line with estimates: 608,000 (increase of 3,000). The previous week's number was revised upward (slightly) to 605,000. Continuing jobless claims fell for the first time since January.

Please note:

- Continuing claims were thought to have fallen 2 weeks ago, but the number was revised higher

- Even if the number is not revised higher, we don't know why the number dropped. Was it because people are finding jobs or is it because their benefits expired? A few weeks ago, I made mention of this. The longer the slide in jobs continues, the tougher it becomes to interpret the data.

Non-Farm Payrolls

When you are wrong, why not be really wrong?

Job losses came in at 345,000, well under the consensus estimate of 520,000 and my estimate of 616,000. The unemployment rate rose to 9.4%. Hours worked dropped a bit and hourly wages were flat.

The BLS also adjusted the previous months' revisions upward, fewer people were let go. I'll have to think about this number. There was no large bump in government employment, nothing stands out as a reason why the estimates were so far off.

This number confirms the overall trend that the ADP survey displayed: roughly 5.8 million jobs lost since the recession started.

More On Jobs Market

The above graph tracks the BLS Non-Farm Payroll tally for the last 15 years. That 132 million jobs level is sticky, isn't it? Makes you wonder about the earnings power of the economy....

Historical Jobs Data

It is interesting to note the relative performance of the jobs market over the last 70 years. Growth in jobs seems to have peaked and is now experiencing a downward trend.

Change in non-farm payrolls from beginning to end of recessions:

Start	End	Change
Nov-73	Mar-75	-1.62%
Jan-80	Jul-80	-1.07%
Jul-81	Nov-82	-3.08%
Jul-90	Mar-91	-1.13%
Mar-01	Nov-01	-1.21%
Dec-07	?	-3.72%