Updates
April 8, 2013: Hey, wake up! It's Monday morning. The post mortems are coming in -- the jobs report on Friday. Monday morning quarterbacking. It's easy now to write the stories. Here's the first out of the starting blocks from CNBC:
Weak U.S. jobs data on Friday confirmed the worst trading week this
year for European and U.S. stocks and now analysts are warning there
will be little upturn in the data and investors should brace themselves
for further trouble ahead as fiscal tightening begins to take its toll.
Friday's jobs report came in well below expectations, raising concerns
that the recovery in the world's largest economy is weakening. March's
participation rate was at its lowest since 1979, according to the Bureau
of Labor Statistics. Just 88,000 jobs were added to the economy last
month although the unemployment rate fell to 7.6 percent from 7.7 percent in February.
"In the labor market, at least, we see a real risk of even worse news
down the line," Ian Shepherdson, chief economist at Pantheon
Macroeconomic Advisors said in a research note on Monday.
Weakening labor demand is the key problem with the U.S. economy,
according to Shepherdson, not rising layoffs. And this weakening demand
is mostly from small firms, that are below the radar of the Institute
for Supply Management (ISM) survey which shows national factory
activity.
Original Post
Of all the data coming out today, the data with the worst implications and long-lasting effects:
Record 89,967,000 not in labor force; another 663,000 drop out in March
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Wells coming off confidential list have been posted. OXY USA abandons a wildcat Three Forks well; most of the reports mediocre to not good.
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All we need from the President is a "Jimmy Carter malaise speech." In 1979, it was the Iranian hostage situation; today, it's the Korean Missile Crisis.
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Remember: the magic number is 200,000.
"We" need 200,000 for growth.
At one time "they" tried moving the goal posts to 120,000.
Today's numbers won't hit 200K; won't hit 120K; won't hit 100K; less than 90K!
This president is one of three most inept presidents ever.
His answer: raise taxes.
Labor force lowest since President Carter in office.
Cue up Connie Francis.
The jobs numbers.
Unemployment rate drops from the highly disbelieved 7.7% to the more disbelieveable 7.6%
If folks remember, it was only yesterday that economists were officially predicting 200,000 new jobs, but the whisper number was 150,000.
Drudge is first to headline the number: 88,000 jobs. Horrendous (the jobs number, not Drudge).
Labor force is at 63%. Lowest since 1979.
And Drudge's main headline: Obama's answer -- raise taxes again.
Let's see how
Reuters spins the jobs report:
This was the
Reuters report just before the numbers were released:
Analysts expect 200,000 jobs to have been added in
March, down from 236,000 added in February. The unemployment rate is
expected to remain at 7.7 percent.
The S&P
is down 0.6 percent so far this week, on track to be its worst week of
2013.
Earlier this week, private sector employment and
jobless claims data indicated weakness in the labor market. Reports on
the manufacturing and services sectors also disappointed.
"The tone in markets could change if we get a positive
surprise, but the data we've seen leading up to this has people
expecting fewer job gains than we've been seeing," said Chris Bertelsen.
Memo to Chris: wake up.
Now the report after the numbers have come out.
AP first to report: not to worry. The
AP says the report just reminds us that the "job market's path back to full health will be uneven."
"Uneven"?
It's been flat or worse for four years. Now, a drop that surprised. Really surprised. Analysts publicly forecast 200,000 but they were afraid they might lose their credibility if they said what they really thought (150,000) and turned out to be wrong. But their worst predictions weren't even close. It would have been a shock at 150,000. A bigger shock at 100,000. I don't even know what word to use when we see 88,000 jobs added. That's probably what the Bakken has added in the past couple of years on its own. All private.
Wow, talk about
a short, short AP report; this is about all it said:
The weakness in March
may signal that some companies were worried last month about steep
government spending cuts that began on March 1.
March's
job gains were half the pace of the previous six months, when the
economy added an average of 196,000 jobs a month. The drop raises fears
that the economy could slow after a showing signs of strengthening over
the winter.
Can't wait to see the
Reuters more-expanded report.
I have to chuckle. Folks complain about Drudge, but he gets the breaking news out there faster than anyone. Sure, he links others, but he does it better than anyone else. [Seriously, if you want to see breaking news, do you go to
New York Times, Los Angeles Times, Christian Science Monitor, CNN, Fox News, or
Drudge Report. If you don't go to
Drudge Report first you are already behind before you start. Remember,
Drudge does not write the news; he simply links you to news at all those sites and thousands more.]
Still waiting for
Reuters. Reuters not there yet. Here's a better one:
From Zerohedge, one of the better sites for economic activity analysis:
So much for "open-ended QE driven recovery". Moments ago the
March Non-farm payroll hit and it was a doozy, printing at 88K, below
the lowest forecast of 100K, well below the expected number of 190K, and
a tragedy compared to the February revised print of 268K (was 236K).
This was the biggest miss to expectations since December 2009 and the worst print since June 2012.
The unemployment rate declined to 7.6%, but this was due entirely to
the collapse in the labor force participation rate, which declined by 20
bps to 63.3%, a new 30 year low.
CNBC:
Job creation slowed to a crawl during March, with the U.S. economy
creating just 88,0000 positions though the unemployment rate fell to 7.6
percent.
The number was a sharp slide from February's upwardly revised 268,000.
The Labor Department reported Friday that nonfarm payroll growth eased
amid hopes that the economy had begun to achieve the escape velocity
needed for sustained growth.
I'm somewhat disillusioned with a premier business outlet suggesting that a drop in the unemployment sign was a good sign. Hello. It means folks are dropping out of the job market. They do better on disability and unemployment. Though unemployment benefits are running out for many, the number on disability are increasing. Folks have broken the code on how to get on disability. (I talked about this a long, long time ago; I can offer advice how military personnel can position themselves for disability after they retire. All legit.)
Still can't find the
Reuters story. That boiler-plate is always most fun to read. Ah, here it is; shortest I've ever seen. Two paragraphs and the first paragraph mentions it in broadest terms, throwing away the boiler plate today:
Stock index futures sharply extended losses on Friday after data showed
American employers hired at the slowest pace in nine months in March, a
sign that Washington's austerity drive could be stealing momentum from
the economy.
So, that's it. The President's answer to horrendous jobs number -- more taxes. Employers are not going to hire workers when the US is faced with a) the sequester now; b) ObamaCare coming; c) a president that continues to slow-roll US industry (think oil and gas); and, d) now a call for more taxes from that same president.
One of three most inept presidents in US history. Well, since 1929.
Actually, come to think of it: a "Jimmy Carter malaise" speech would be more reassuring than a "more taxes are needed" speech.
Edward P Lazear wrote
this opinion for the WSJ which appeared today, before the horrendous jobs report. It would be interesting to hear Lazear defend his position now. The headline: beware the monthly jobs-report chatter. The initial reports are often inaccurate and don't say anything useful about where the economy is headed.
For example, during the past year, 164,000 jobs were added each month
on average. But consider that the typical error range would put job
growth during that period somewhere between 96,000 and 232,000 in the
average month.
Trying to deduce anything about the
direction of the jobs market by referring to such wobbly numbers is
essentially guesswork. Indeed, in any given month, about 70% of what
happens to job growth in the following year has nothing to do with
changes that occurred in that particular month. In almost one-fourth of
cases, the job growth in any given month does not even move in the same
direction as the job change in the 12 months that follow. Using even the
entire previous quarter's job growth provides no better signal of where
the labor market is headed.
Lazear was the chairman of Bush's Council of Economic Advisers, from 2006 - 2009. I never would have guessed. I had him pegged for an Obama apologist. So, I guess there is nothing to be concerned about.
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The following is for archival purposes, not part of today's post on the jobs report.
From wiki, Jimmy Carter's "malaise" speech:
When the energy crisis set in, Carter was planning on delivering his fifth major speech on energy; however, he felt that the American people were no longer listening. Carter left for the presidential retreat of Camp David.
"For more than a week, a veil of secrecy enveloped the proceedings. Dozens of prominent Democratic Party leaders—members of Congress, governors, labor leaders, academics and clergy—were summoned to the mountaintop retreat to confer with the beleaguered president."
His pollster, Pat Caddell, told him that the American people simply faced a crisis of confidence because of the assassinations of John F. Kennedy, Robert F. Kennedy and Martin Luther King, Jr.; the Vietnam War; and Watergate.
On July 15, 1979, Carter gave a nationally-televised address in which he identified what he believed to be a "crisis of confidence" among the American people. This came to be known as his "malaise" speech, although Carter himself never uses the word in the speech.