NFP: -533,000
Wow, that is really really ugly — the worst job loss in 34 years. This is the 11th straight month of job losses and the largest monthly decline since 1974.
Unemployment ticks up to 6.7%. 422,00 people left the labor force — had that not happened, we would have seen an even bigger unemployment rate.
Revisions downward are also big — September and October increased job losses by 199,000. We are now at nearly 2 million job losses for the year.
~~~
Look out below…
Sources:
THE EMPLOYMENT SITUATION:
BLS, NOVEMBER 2008
http://www.bls.gov/news.release/empsit.nr0.htm
charts via Econompic
THE EMPLOYMENT SITUATION: NOVEMBER 2008
Nonfarm payroll employment fell sharply (-533,000) in November, and
the unemployment rate rose from 6.5 to 6.7 percent, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. November’s
drop in payroll employment followed declines of 403,000 in September and
320,000 in October, as revised. Job losses were large and widespread
across the major industry sectors in November.
Unemployment (Household Survey Data)
Both the number of unemployed persons (10.3 million) and the unemploy-
ment rate (6.7 percent) continued to increase in November. Since the start
of the recession in December 2007, as recently announced by the National
Bureau of Economic Research, the number of unemployed persons increased by
2.7 million, and the unemployment rate rose by 1.7 percentage points. (See
table A-1.)
The unemployment rates for adult men (6.5 percent) and adult women (5.5
percent) continued to trend up in November. The unemployment rates for
teenagers (20.4 percent), whites (6.1 percent), blacks (11.2 percent), and
Hispanics (8.6 percent) showed little change over the month. The jobless
rate for Asians was 4.8 percent in November, not seasonally adjusted. (See
tables A-1, A-2, and A-3.)
Among the unemployed, the number of persons who lost their job and did not
expect to be recalled to work increased by 298,000 to 4.7 million in November.
Over the past 12 months, the size of this group has increased by 2.0 million.
(See table A-8.)
The number of long-term unemployed (those jobless for 27 weeks or more) was
little changed at 2.2 million in November, but was up by 822,000 over the past
12 months. (See table A-9.)
Total Employment and the Labor Force (Household Survey Data)
In November, the labor force participation rate declined by 0.3 percentage
point to 65.8 percent. Total employment continued to decline, and the employ-
ment-population ratio fell to 61.4 percent. (See table A-1.)
Over the month, the number of persons who worked part time for economic
reasons (sometimes referred to as involuntary part-time workers) continued
to increase, reaching 7.3 million. The number of such workers rose by 2.8
million over the past 12 months. This category includes persons who would
like to work full time but were working part time because their hours had
been cut back or because they were unable to find full-time jobs. (See
table A-5.)
December 5th, 2008 at 8:33 am
Yeah! Above expectations, time for a rally. Oh wait a minute…
December 5th, 2008 at 8:38 am
I am waiting for Larry Kudlow to come on CNBC this morning and explain why this is all Barack Obama’s fault.
December 5th, 2008 at 8:46 am
GWB is just one profitable invasion away from turning this whole mess around. Lookout Grenada!
December 5th, 2008 at 8:46 am
Don’t Loan – Hold On to that Capital
Reposession then ReSell
Master Plan for paper pusher jobs
December 5th, 2008 at 8:47 am
Wow. Thats a bad employment report. There can be noone out there who is looking at this now and thinks this is just a normal bear market.
December 5th, 2008 at 8:49 am
That’s almost comparable to the total job market of countries like Ireland.
December 5th, 2008 at 8:49 am
Wow that’s bad. Starting a new position with new capital this morning for IWM Russell 2000 @ $42
December 5th, 2008 at 8:53 am
El stinkissimo!
December 5th, 2008 at 9:01 am
Worst Presidency Ever.
This guarantees the title.
December 5th, 2008 at 9:04 am
Given the psycho nature of this market, it’ll go UP on the news.
December 5th, 2008 at 9:07 am
Scott F,
I was thinking the same thing. I guess this means we won’t see Goldilocks for a day or so.
The guy is totally clueless. How do we end up with such incompetent or outright deceptive people in such a high-profile areas affecting some many people?
December 5th, 2008 at 9:08 am
I expect green by market close.
~~~~
BR: Nice call! Plus 100 at 3pm
December 5th, 2008 at 9:13 am
looks like a good day to go skiing….
December 5th, 2008 at 9:14 am
I think we had the rally simply in that the market is still above its lows after a week of truly abysmal numbers. The technical line drawing Barry is wedded to may work (mostly because enough people expect it to) when the data is within some standard deviation of previous data, but data like the ISM numbers, this job number, etc., simply trump the chart watching.
The rally is dead, long live the rally! (Obama inauguration rally, to be followed by Obama disappointment crash…)
December 5th, 2008 at 9:16 am
The other thing is that I hear more and more discussion about Obama should be doing more!! He’s not even the fucking President yet! Can none of the Bushies think of a single thing they could do between now and January 20th. Bad-mouthing Obama at this point for not doing more is the most stupid position I have ever heard anyone attempt to make.
Just wait until this poor guy does get into Office. Before the end of the first day, the Pubs will be blaming him for everything bad that has happened since Ron Reagan. One last thing. I don’t ever remember Ronald Reagan as being this great President. I remember at the time we all just laughed that it was his greatest act ever. He just acted the part. IMO, he was no better than some of the other President we have had in the past; but, to hear the Pubs tell it, he was this great man of great deeds.
IMO, he will be remembered for the first to make large cuts to taxe rates and let the notion of not balancing the Country’s books could to proliferate. Artificially stimulated the credit to drive the economy. Take away any kind of return for frugal Americans who invest in CDs and made open threats to any Blue-Collar workers who tried to ban together to improve their standard of living or the future of their children. Trickle-down never worked and what we are seeing right here this morning is evidence of that.
You never get something for nothing in this world and that was the mantra of the Pubs for the last 25 years. Well, the party is over. Get your ballon and get out!!
December 5th, 2008 at 9:16 am
Merrill Lynch Pierce Fenner & Smith
RIP
1914 – 2008
December 5th, 2008 at 9:27 am
I call BS on the official U-3 rate of 6.7%. To exclude 422,000 people because they were in such despair, so despondent and discouraged they gave up looking such that as to no longer count them, breaks, not stretches, but breaks anyone’s sense of rational thinking. This just put the death nail into the U-3 rate as a useful statistic and the credibility of anyone who quotes it as an accurate reflection of stress in the labor markets.
December 5th, 2008 at 9:28 am
I’m still smelling a continuation of this rocky rally, probably spurred on next by a big 3 bailout. If that doesn’t happen then I’ll be smelling new lows!
December 5th, 2008 at 9:34 am
Whatever happens by the end of the day, I very much doubt we’ve seen an ultimate bottom yet. Pimco’s Bill Gross is quoted as saying he sees a 5,000 dow unless everything is done perfectly. What are the odds for the U.S. doing everything perfectly?
December 5th, 2008 at 9:36 am
Worst number since December 1974. Hmmm. Fits nicely with the technical overlay to date suggesting that we are in a replay of Oct 73-Dec 74.
Either way what did people expect with stocks down 50%—good news? Markets bottom when they base and rally on bad news. This is another such opportunity. We shall see.
December 5th, 2008 at 9:59 am
Well, some things suck. But some things are getting better and, through the miracle of the invisible hand, those things that are improving will start to permeate the statistics in a couple of months.
Good cheap oil is causing good cheap gas prices. It’s safe to drive the SUV again just for the fun of it. And, no, oil is not going to $10, but it might drop a little more before it stabilizes in the $40 – $55 range. Hint: service companies are out of favor now, but buy and hold for a year and you will see a tidy profit.
Mortgage rates are falling. Fixed rates are at historical lows and only those who are financially qualified can get a loan. You remember, the way things used to be before the credit goofballs took over. Anyone with a floating rate loan will see it renew at a lower cost. If my arm were to renew today, it would be around 2.5%.
Anti-inflation is coming (as opposed to deflation). Commodity driven higher prices are turning around and lower prices will creep back into the mainstream.
One or 2 of the former big three will say goodbye in a couple of weeks. They will be picked apart by bargain hunters that would happily buy GM at less than book if it can remove onerous liabilities, a few redundant models, and some of an antiquated distribution system. Chrysler will probably survive bankruptcy intact, except for the removal of excessive liabilities. Hmm General Motors, made in USA … product of China.
The consumer is taking the economy back from the finance ‘professionals’ who excel at pinheaded ways to lose money in spectacular ways. Maybe even bank CDs will stage a comeback as they appear to be a far more professional example of successful financial management that you see from a typical hedge fund ‘manager’ .
Hint for the future … Hedge funds only succeed in the numbers they currently exist in if they all are playing a game of hot potato with credit instruments and inflated asset values. The only way to win is to get out early. This includes the Harvard endowment ‘investment managers’ and all those who do similar work. Double hint … invest in real assets, not ‘greater fool paper assets’. It is ok to put cash into stock for startups that actually build something.
December 5th, 2008 at 10:00 am
No credit, no consumers.
No consumers, no economy.
No economy, no jobs.
No jobs, no consumers.
The end.
December 5th, 2008 at 10:02 am
Job losses equate to cost savings for corporations. Given the muted retail reaction to the news and the absence of panic selling, I’d expect any future good news to produce a sizeable rally. Getting the job losses out of the way will presumably mean fewer job cuts on future reports.
December 5th, 2008 at 10:02 am
What would the number be if we used the 1974 formula?
December 5th, 2008 at 10:13 am
It would not surprise me to see a rally on such news. Wall St loves layoffs as that is cost cutting. Wall St seems to miss the fact that those are all customers of someone’s who are customer’s of others, etc etc.
Washington will fix it though. That is the one hope we can all have.
December 5th, 2008 at 10:20 am
And U-6 is at 12.2%. You can go to Shadow Stats to see a chart of what is one possible look at the original way unemployment was calculated.
December 5th, 2008 at 10:22 am
Yep, yep, things sure ARE getting MUUUCCH MUCH better. Turnaround just around the corner…….
On another planet perhaps. Just not this one.
December 5th, 2008 at 10:25 am
@dead hobo you write “Anti-inflation is coming (as opposed to deflation)”
Can you expound on this?
Inflation is the expansion of the money supply into the markets, often followed by increasing prices due to a less valuable currency.
Deflation is the contraction of the money supply from the markets, often followed by decreasing prices due to a more valuable currency.
What exactly is anti-inflation if it is not deflation?
December 5th, 2008 at 10:29 am
notice the huge revision to the October numbers
election’s over – no need to cook the books anymore…
December 5th, 2008 at 10:40 am
Anyone noticed futures rose after the data release?
December 5th, 2008 at 10:40 am
Newsflash to those pollyannas: Jobless people don’t spend money. No matter how you’d like to sugarcoat this news as somehow “good” because cutting jobs cuts corporate costs, this is disastrous. We ain’t anywhere near the bottom.
SRS, QID, EEV. ‘Nuff said.
December 5th, 2008 at 10:52 am
As someone previously said, I think these jobs numbers are going to pale in comparison to the ones put out after the new year. Small businesses will wait to lay people off until after the holidays. Jan and Feb could be gross.
December 5th, 2008 at 11:05 am
Juke Jones: if prices rise due to credit expansion, or any other form of monetary expansion, this is inflation. If the prices that rose due to inflation turn downward when inflationary pressures are removed, this is anti-inflation, or price recovery.
Deflation is a more pervasive condition where money and credit contract to the point where cash is the only asset worth having. Prices fall with regularity just to attract cash. This becomes a vicious spiral of lowered prices just to attract cash, which causes competitive lower prices. Not having a TARP and other programs would contribute to deflation because credit would be even less available. At this time, it just price recovery.
Mannwich … cheer up. You’re not being tortured in Gitmo. Neither are those people who must shop for necessaries and THE PRICE IS LOWER than it was last March. And it keeps going lower because it costs less to make. The invisible hand works in mysterious ways.
December 5th, 2008 at 11:09 am
@dead hobo: Not feeling down. I have SRS, QID and EEV and will be adding more on any dips, so I feel fine on a personal level, thank you very much.
But the invisible hand may be dealing with invisible money for those jobless in the months to come though.
December 5th, 2008 at 11:09 am
There are still 70,000 tech jobs at http://www.dice.com
December 5th, 2008 at 11:14 am
@vdhinaka: As a recruiting “professional” (I use that term very loosely), I can tell you that a solid majority of those posted “jobs” are not “real”, meaning they won’t ever actually be filled. This is maybe the biggest problem with Internet job postings………
December 5th, 2008 at 11:16 am
From Calculated Risk: MBA: Almost 10% of Homeowners with Mortgages Delinquent or in Foreclosure Process.
We gotta hang onto our Goldilocks Economy!
December 5th, 2008 at 11:21 am
“What exactly is anti-inflation if it is not deflation?”
Authentic Frontier Gibberish
December 5th, 2008 at 11:23 am
vdhinaka Says:
December 5th, 2008 at 11:09 am
There are still 70,000 tech jobs at http://www.dice.com
I hope you don’t really believe that.
December 5th, 2008 at 11:28 am
Rally or not , early morning is offering long opportunities for those of who are currently legging in long.
December 5th, 2008 at 11:30 am
And given the tendency to make cutbacks after the holidays, what is the 2009Q1 employment picture going to look like? — although maybe cuts are being pulled forward this time, and we might not see even larger cuts in the spring.
We are closing in on Depression-like unemployment levels. Luckily, the lag time from the Fed’s rate cuts and various bailouts is just about up, so we should be seeing some mitigation of the disaster shortly after Dubya departs the scene — how appropriate!
I’m undecided as to whether we will see another significant leg down in the markets, or whether we will muddle along in this head-banging daily swings market for another six-to-ten months, until the last trader wipes out surfing the unpredictable waves of chaos. Where is Andy Tabbo with another refinement of his wave prognostications? I need my daily fix.
December 5th, 2008 at 11:32 am
Several (I mean SEVERAL) retailers will be going out of business entirely next year. That will continue to do a number on Commercial Real Estate.
December 5th, 2008 at 11:40 am
@ Mannwich — given those numbers for impending foreclosures, I guess I can see my way to supporting the 4.5% mortgage plan — so long as it’s for existing mortgages only, and not new ones. Otherwise, you end up poisoning the few legitimate mortgage companies left out there. Something has got to be done to halt the chain reaction going on in the mortgage markets, other than to have every mortgage in America be foreclosed.
At first I saw the 4.5% mortgage plan as being intended to halt the price declines, but now I see that it will also slow the foreclosure rate, as well as injecting a substantial stimulus into the consumer marketplace, or allow debt levels to be paid down more rapidly (which also helps, in an economy smothering in too much debt). I think that this approach might ultimately be better than tax cuts in providing a beneficial stimulus.
December 5th, 2008 at 11:41 am
Gotta love the headline:
“Huge Job Losses Could Be Signal That Worst Is Over”
http://www.cnbc.com/id/28069440
I guess it’s ‘merely a flesh wound.’ I’m just waiting for Kudlow, Dennis Kneale, etc. to say it’s a big mustard seed and that the data doesn’t matter because it’s backwards looking anyways….
HCF
December 5th, 2008 at 11:43 am
vdhinaka Says:
There are still 70,000 tech jobs at http://www.dice.com
Mannwich Says:
a solid majority of those posted “jobs” are not “real”,
I remember that, during the last recession (2002) there were only 25,000 jobs listed at dice.com and the unemployment rate was about the same 6%
December 5th, 2008 at 11:44 am
@HCF: CNBC been saying “worst is over” for over a year now. One day they’ll be right. It’s unfathomable that anyone takes them seriously anymore. They’re basically one giant infomercial for corporate interests.
Do they really believe this will be the worst jobs report that we’ll have? Next year is going to be a bloodbath. Been saying that for months now and don’t see anything to change my analysis.
December 5th, 2008 at 11:47 am
So, 533,000 + 422,000 = 955,000 in a SINGLE month or around 3,180 a day. Yeah, Bush’s legacy is sealed; “Worst President EVER”. I hope they engrave that on his headstone.
December 5th, 2008 at 11:48 am
vdhinaka: Go and try to apply to every one of those jobs. I’ll bet you’d get less than 10 (maybe 5) calls from the sources of those postings for interviews.
Several of those jobs are duplicates posted by hack recruiting firms (people who left the real estate biz, no doubt) grasping at straws and throwing spaghetti at the wall to see what sticks.
Trust me – more than half (maybe even 75%) of those jobs aren’t “real”. Many are also just looking to padd their database of resumes for when they ARE actually ready to fill them. Just placeholders that are up all the time no matter what.
December 5th, 2008 at 12:00 pm
> Do they really believe this will be the worst jobs report that we’ll have? Next year is going to be a bloodbath. Been saying that for months now and don’t see anything to change my analysis.
@ Mannwich:
I agree with you completely about the coming bloodbath. GDP= big negative number, NFP = big negative number for the forseeable future. I wonder if we get -8% and then -4% on GDP in the coming quarters if hacks like everyone’s favorite Ewok, Jerry Bowyer will FINALLY admit we’re in recession.
btw, what type of bloodbath: end of ‘Reservoir Dogs’ bloodbath or opening scene of ‘Saving Private Ryan’ bloodbath?
HCF
December 5th, 2008 at 12:02 pm
@dead hobo: There really just isn’t any bad news that’s actually bad to you, is there?
Yes, oil is down, and that’s a plus. At $50/barrel vs. the average of $90 we paid in 2008, in 2009 that will save this country roughly a $600 million a day, over 240 billion annually. But guess what? That’s still less than 2% of our GDP.
Yes, some people are refinancing at lower rates, but really, how much lower are they going? Rates have been less than 6% for a long time now. This also isn’t going to be a tremendous factor, although it is a small positive.
Falling price levels don’t help much though when most of the population has very little savings (and in a lot of cases, JOBS.)
I’m not saying the sky is falling. We’re probably closer to the bottom in the market than the top. But I think many people are underestimating how LONG it will take our economy to recover, and we may never again be the world leader we were. We might bounce between Dow 7000-11000 for the next 5-10 years. I don’t think it’s unrealistic.
And for all of the the issues facing our economy.. Overall PE”s are still too high.
December 5th, 2008 at 12:29 pm
Message to my fellow TBP folks who are short right now. If this market manages to start trading positive on the day after this data, then I would seriously consider exiting said short positions.
It’s still possible we could leg down to that 800 zone still, but it’s time for shorts to become aware of risks they currently face to the upside.
Seriously.
- AT
December 5th, 2008 at 12:32 pm
So it’s QID and SRS heading to 200 and beyond, eh?
December 5th, 2008 at 12:48 pm
No credit, no consumers.
No consumers, no economy.
No economy, no jobs.
No jobs, no consumers.
The end.
They HAD credit… but they used it all up. That’s why this is a debt deflation, not a recession.
December 5th, 2008 at 12:52 pm
Although -533K is bad (and that will probably be revised to -600K), the big news here is U-6 going up by 0.7% (U-3 only went up by 0.2%) and the work week going down to 33.5 hours – the lowest since records began in 1964! That means the already grim headline numbers are masking an even worse reality of underemployment. The bloodbath in consumer spending and GDP in the coming months is going to be on the scale of Saving Private Ryan or Antietam.
December 5th, 2008 at 1:08 pm
What was the birth/death adjustment on today’s numbers? I’ll bet things are worse than even this horrible number indicate.
December 5th, 2008 at 1:21 pm
i suspect we will see more bad news. we may get to 10-15 % unemployment (in U3 no less). and deflation will probably take hold and stay a while. we may get a big bounce when we do get a big stimulus, but if the business community doesn’t pitch in, then it will be done again. and so far, they have done very little (at least since 2000 anyway but contribute to a big mess). GDP may finally be a real number, and will be less 0 than for a year. and who knows, wall street may even like 5000 (or less).
December 5th, 2008 at 2:15 pm
The -533K employment loss number is, of course, BS.
MoM employment actually dropped 634K, but the magic seasonal adjustment erased 100K of that. Also, don’t forget the inevitable 100K+ “adjustment” to the November numbers come December.
YoY, November is down 1.95 million, even including the +300K new Government jobs.
December 5th, 2008 at 2:32 pm
@ Borchers: Good call.
@ AT: Please keep it coming, I appreciate your insight.
WTF today. I’m bleeding bad. Don’t know if I have the balls to take losses here.
December 5th, 2008 at 3:23 pm
CPJ13.
No problems. It was a nice intraday move. Because I use leverage and I don’t like holding positions over weekends I’m out with SP500 at 865. I’m seeing intraday bearish RSI divergence at this point and I can see a sweet little five wave move on intraday charts. So, I’m sort of in neutral position. Will look to buy back on any good little dips on Sunday or Monday.
- AT
December 5th, 2008 at 3:38 pm
AT,
I also have been following your posts with a lot of interest. I really appreciate you sharing your insights with the rest of us. Can you recommend a source to begin learning elliot wave theory? Thx.
December 5th, 2008 at 4:06 pm
Andy Tabbo Says:
December 5th, 2008 at 12:29 pm
Message to my fellow TBP folks who are short right now. If this market manages to start trading positive on the day after this data, then I would seriously consider exiting said short positions.
It’s still possible we could leg down to that 800 zone still, but it’s time for shorts to become aware of risks they currently face to the upside.
Seriously.
- AT
nice seeing, AT, better call~
December 5th, 2008 at 5:00 pm
I’ll say it again… The bottom in July 1932 was months prior to the banking system going into its death spiral.
December 5th, 2008 at 7:37 pm
Bespoke put today’s number in perspective. How bad was it? It doesn’t even make the top 40. While the number was large the workforce has expanded accordingly. On a percent of the workforce today’s number was 41st.
December 1974 was twice as bad. Today’s number would have had to exceed 1,000,000 to compare.
http://bespokeinvest.typepad.com/bespoke/2008/12/41st-worst-monthly-jobs-report-on-recordyes-41st.html
December 6th, 2008 at 5:35 pm
@Patrick Neid: Which means we are likely to see far worse numbers in December going forward well into ‘09. The real mess is just starting.