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HomeApril Unemployment Report: UPDATE!!
Posted by Larry Doyle on April 3rd, 2009 7:26 AM |
Before this morning’s numbers were released, I published:
The widely anticipated April Unemployment Report will be released at 8:30 am EST. Concerns over this report have increased over the last two days given a report from ADP on Wednesday which forecast an increasing rate of decline in employment. Additionally, Weekly Jobless Claims increased yesterday.
Over and above the actual report, the Bureau of Labor has consistently revised prior months’ numbers worse than initially reported. Aside from the headline print, a thorough analysis needs to focus on these revisions. I will report back shortly after 8:30pm with the actual numbers!!
Last month’s numbers and expectations for this report are as follows:
**note: I have now included the actual numbers which were reported at 8:30 a.m.:
Unemployment Rate
March 8.1%
expected 8.5%
April Report 8.5%
The UnderEmployment Rate is 15.6% as reported by Bloomberg! This rate incorporates unemployed (not working, but looking for work), underemployed (working part-time, but would prefer full-time), and unemployed, having given up looking for work. These last two groups are not included in the reported 8.5% unemployment rate.
Non-farm Payroll
March Report 651k
April expected 658k
April Report 663K
January Revision from 655k to 741k
Avg Hourly Earnings
March Report +.2%
April expected +.2%
April Report +.2
Avg Hourly Workweek
March Report 33.3 hours
April expected 33.3 hours
April Report 33.2 hours
Analysts hit the numbers, as they came in as expected. Wow! Are the analysts that good or are these numbers being “managed” or “massaged” so as not to overly upset the markets? Well, we did have a significant revision to January’s report. Let’s dig deeper!!
Call me paranoid, but when a January Non-Farm Payroll number is revised from a loss of 655k jobs to 741k and no revision is provided for February, I immediately ask why.
The fact that the average hourly workweek actually declined by .1 from 33.3 hours to 33.2 hours is very meaningful. With job losses increasing, and the remaining workers actually working fewer hours, this is an indication of declining flow of orders.
No improvement in average hourly earnings, so no expectation of improvement in consumer spending.
Market reaction: bonds slightly lower. Stocks initially popped higher but are now selling off slightly.
The WSJ reports: Recession Job Losses Top 5 Million
Aside from these numbers, in regard to the G-20, the big winner seems to be the International Monetary Fund. It is reported that the IMF will receive $1 trillion to allocate to emerging economies and developing countries. It was not widely reported that some of those funds had already been committed to the IMF, so it is not “new” money. The old double counting trick!!
LD
These Companies Do Not Want Your Business
Posted by Larry Doyle on March 21st, 2009 2:11 PM |
Many credit card companies are now offering incentives for a wide range of their customers to “take their business elsewhere” and return their cards in the process. Are these companies trying to turn business away? Have they expanded too rapidly? Are they having operational issues? Are they afraid of what the future holds? In a word, the simple answer to all those questions is YES!!
Credit card companies are already experiencing a significant increase in delinquencies and defaults and expect both those figures to ratchet higher in the face of rising unemployment. (more…)
Review of Unemployment Report Jan 9, 2009
Posted by Larry Doyle on January 9th, 2009 10:04 AM |
***Meredith Whitney is indicating that despite the fact that banks raised $805 billion in capital in 2008 and had $125 billion injected via the TARP, the banking system will need to raise more capital in 2009. This is a clear signal that losses have not yet been recognized along with the likelihood that new losses are being incurred. A regional investment bank, Friedman Billings, believes the banking system needs $1.2 trillion in FRESH capital.
***It’s purely my speculation, but I would be willing to bet funds from “How Bernie ‘Madoff’ with $50 Billion” may have actually been directed to other hedge funds. If that is, in fact, the case the Ponzi scheme that started at Madoff may in turn spread. The fact that so many funds “put up the gates” which prevented investors from withdrawing funds is a very telling indication that this may have occurred. Some funds may have very legitimately utilized that approach and some may have not.
The widely anticipated employment report was released this morning at 8:30AM. Let’s dive right into the numbers and then decipher them:
Unemployment Rate: increased from 6.7% to 7.2% versus a consensus estimate increase to 7%. One must understand, though, that the actual unemployment rate ONLY tracks people out of work who are looking for work. If we were to incorporate discouraged workers, those out of work who have given up looking, then one of every ten workers in our country are currently unemployed. With a total workforce of approximately 175 million people and projections that the unemployment rate will move up another 1-3%, our economy is likely to lose another 3 million jobs!!
Non-Farm Payroll: (for those who do not traditionally track these stats, the NFP tracks the actual number of jobs gained or lost in the economy): for the month of December 2008, the economy lost 524k jobs versus consensus estimate of 525k. One may think the soothsayers had it right with their estimated call. However, both October’s and November’s NFP numbers were revised downward by 103k and 51k respectively. Thus, over the last three months of 2008 the U.S economy lost a total of 1.431 million jobs!!!
