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Economists React to Jobs Data

Posted By Barry Ritholtz On February 5, 2005 @ 7:33 am In Economy | Comments Disabled

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You can have fun parsing a few of these answers . . .  I have an idea, lets play a guessing game: Can you guess which economist is full of $%&! ?


Its fun and easy for the whole family! Multiple answers are not only allowed, but encouraged!


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Online WSJ [1]:  The Labor Department reported Friday that nonfarm employers added
146,000 jobs to payrolls — a better pace of growth than seen in recent months,
but short of what many forecasters had expected. The unemployment rate dipped to
5.2% as many discouraged workers suspended their hunt for a new job. Here’s what
a selection of economists had to say about the numbers:

* * *

If you believe the supply managers, firms are adding
workers. Maybe BLS just can’t find them. A sharp cutback in the motor vehicle
sector played a major role in the decline. … The sub-par job gains undoubtedly
have bond market investors salivating. But any whiff of weakness causes that
market to rally.
– Joel L. Naroff, Naroff Economic Advisors

Construction employment posted an outright decline for
only the second time in the past couple of years. The BLS theorized that
"adverse weather may have held down employment in the industry." … Also, it’s
worth noting that just about all of the downside in the average work week was
concentrated in the construction sector. The construction work week declined 2%
– to the lowest level in more than 10 years.
– David Greenlaw, Morgan
Stanley

The key point here is that it is just too soon for the
rise in help wanted and the higher ISM employment index, among other indicators,
to affect the payroll data. But they will lift the numbers by the
spring.
– Ian Shepherdson, High Frequency Economics

We would have more faith in these numbers if they
corresponded more closely to other evidence concerning the labor market. Weekly
jobless claims have been at levels consistent with an underlying trend of about
+200K for payrolls, as has the "jobs plentiful" reading in the Conference
Board’s consumer confidence survey. Consumer spending results are also more
consistent with firmer labor market conditions than shown in these
figures.
– Joshua Shapiro, Maria Fiorini Ramirez Inc.

The official unemployment rate is at its lowest level of
the post-recession period. However, alternative measures of labor market
utilization indicate that there are still substantial labor resources available.
The economy still has room to grow quickly without straining the available labor
resources.
– Steven Wood, Insight Economics

The unemployment rate declined to 5.2% but this masks
fundamental problems in the labor market and broader economy. The labor force is
shrinking. In January, the number of workers fell 224,000, and in December it
declined 110,000. The economy is not creating enough good paying jobs, causing
workers to quit looking for jobs altogether.
– Peter Morici, Robert H.
Smith School of Business, University of Maryland

The deceleration in job creation has not been confirmed by
other labor market indicators such as initial jobless claims. In any event, job
creation of around 150,000 per month is sufficient over time to absorb new
entrants into the workforce unless labor force participation were to rise
sharply.
– John Ryding, Conrad DeQuadros, Elena Volovelsky, of Bear
Stearns

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Source:

Economists React [1]
Compiled by Tim Annet [2]
WSJ Online, February 4, 2005 10:40 a.m.
http://online.wsj.com/article/0,,SB110752870854146135,00.html


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URL to article: http://www.ritholtz.com/blog/2005/02/economists-react-to-jobs-data/

URLs in this post:

[1] Online WSJ: http://online.wsj.com/article/0,,SB110752870854146135,00.html

[2] Tim Annet: mailto:Tim.Annett@wsj.com

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