Ugly NFP: -263k
Futures no likey NFP report:
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Two interesting observations:
1)this level of labor Under-utilization means there is no inflation threat any time soon;
2) Look for the conspiracy theorists to blame Goldman Sachs gov’t contacts for their lowered forecast of NFP numbers yesterday — and not the ugly ADP data . . .
Here is the official data:
THE EMPLOYMENT SITUATION — SEPTEMBER 2009
Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of Labor Statistics reported today. The largest job losses were in construction, manufacturing, retail trade, and government.
Household Survey Data: Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.6 million to 15.1 million, and the unemployment rate has doubled to 9.8 percent. (See table A-1.)
Unemployment rates for the major worker groups–adult men (10.3 percent), adult women (7.8 percent), teenagers (25.9 percent), whites (9.0 percent), blacks (15.4 percent), and Hispanics (12.7 percent)–showed little change in September. The unemployment rate for Asians was 7.4 percent, not seasonally adjusted. The rates for all major worker groups are much higher than at the start of the recession. (See tables A-1, A-2, and A-3.)
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Source:
THE EMPLOYMENT SITUATION — SEPTEMBER 2009
BLS, October 2, 2009
http://www.bls.gov/news.release/empsit.nr0.htm
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October 2nd, 2009 at 8:35 am
Now we get to deal with all the EMH folks who will claim that yesterday’s whackage ANTICIPATED today;’s number.
October 2nd, 2009 at 8:36 am
…minus 53,000 in gov’t… can’t be all bad.
October 2nd, 2009 at 8:36 am
Where are the bulltards (Harry, f411)?
October 2nd, 2009 at 8:40 am
Has anyone been talking to their local businesses lately, it is ugly right now.
Ben better get back in the helicopter soon.
October 2nd, 2009 at 8:42 am
Time to move the goalposts again, Harry.
October 2nd, 2009 at 8:43 am
“This town, is coming like a ghost town…” – the Specials
October 2nd, 2009 at 8:44 am
When Ben said recession was over, he wasn’t referring to American economy.
October 2nd, 2009 at 8:48 am
manhattanguy Says:
October 2nd, 2009 at 8:36 am
Where are the bulltards (Harry, f411)?
reply:
———
They’re off chanting “I WANT TO BELIEVE”. Along with the chant, they’re probably scouring the internet looking for a new fable or soap opera thread to explain today’s news and help sell a new leg up to gullible day traders. The sales pundits will have a spin soon and they’ll try to separate fools from their money once again. I expect part of the soap opera thread to be “Wait ’till next month. buy the dip today”.
The Fed has only $7b out of $300b of pump money left and the past two pumps delivered a down market. Once it’s gone the market will slowly begin to be priced in relation to value. I don’t think many suckers are going to jump in today because it looks like a good opportunity.
October 2nd, 2009 at 8:51 am
I read this yesterday about how this time it is different, because of debt. Something many in this room have been saying for months now. And I believe the author has many points that are hard to refute. This is the trouble with Keynes, the back of the bus. The front end may get through the interesting, but the back still gets hit by a car. Once you look at the face of the debt Medusa, you may not be able to change back…
http://www.nakedcapitalism.com/2009/10/the-recession-is-over-but-the-depression-has-just-begun.html#comments
The recession is over but the depression has just begun –
“Depressions marked by balance sheet compression.
Recessions are typically characterized by inventory cycles – 80% of the decline in GDP is typically due to the de-stocking in the manufacturing sector. Traditional policy stimulus almost always works to absorb the excess by stimulating domestic demand. Depressions often are marked by balance sheet compression and deleveraging: debt elimination, asset liquidation and rising savings rates. When the credit expansion reaches bubble proportions, the distance to the mean is longer and deeper.”
This is worth a read….
October 2nd, 2009 at 8:52 am
intersection, he typed…belatedly…
October 2nd, 2009 at 8:52 am
As I like to say, disaster is an upgrade from armageddon… With that said, disaster is still not good, so the case for bullishness may have been dramatically overstated.
HCF
October 2nd, 2009 at 8:55 am
To me, expecting to see a rising market because of Fed liquidity injections and HFT shenanigans … that doesn’t look like investing. That dog is off making dry heave noises now. If a whole new way to pump the market doesn’t appear in a few days, then the HFT kiddies will have to skim pennies out of people who have ice cream cone stains on their foreheads.
October 2nd, 2009 at 8:58 am
Just like it was not a stretch to expect a rally after the S&P 500 collapsed from 1550 to 670, so too it is not a stretch to see a pullback after going from 670 to 1070. This will take time to unfold folks…
October 2nd, 2009 at 8:58 am
BinT:
I was just going to post that link. Interesting stuff. HW’s analysis and predictions were relying heavily on inventory restocking (if I remember correctly). Looks like this time might be different.
October 2nd, 2009 at 8:59 am
@beaufou
My local town looks like a ghost town with 30% of the store fronts for rent. Three businesses who had been in business at least 20 years have gone under in the past month, children’s shoes, children’s clothes, and a yogurt shop. This is in an upscale shopping area. The local Mexican restaurant was so empty when we went there for dinner that we thought it might be closed, pre-meltdown, it was packed every day of the week, but it still used to do a good business until recently. The local hardware/garden center/seasonal store had one customer besides us, when normally it would be bustling with people buying fall and Halloween goods. Business is getting much worse here, not better.
October 2nd, 2009 at 9:03 am
Marcus:
Japan, with more fiscally prudent citizens than most of ours has had a problem with debt. And I know many say, so what, they aren’t in depression. But the latest figures are really bad, and it does resemble a slow motion accident since 1990 and the 40k Nikkei, doesn’t it? With their demographics, it looks to get worse to me, here and now….
October 2nd, 2009 at 9:05 am
my shorts are finally paying off. bout damn time!
October 2nd, 2009 at 9:07 am
the small business in higher priced areas are really taking it in the shins. case in point i found a costume for my son at a local small business. they wanted twice what i could get it for at target. extrapolate this out with people being more careful with expenditures and you have a recipe for disaster.
October 2nd, 2009 at 9:07 am
@dead hobo
Look for a new guy to show up, with a catchy name of course, after the shit has finished hitting the fan to sound the “bullhorn” for green shoots. Problem is that they can change their name, but they can’t change their writing style or content.
I had a funny thought, wouldn’t it be funny if HW was hired as part of the Recovery Act to post inane bullish comments, the more outrageous the better, on message boards, like mind control?
What other explanation can be for posting such ridiculous comments? (out of respect for HW, we will exclude any mental illness as an explanation)
October 2nd, 2009 at 9:08 am
that is terrible by all means.
But if u guys are watching something even more interesting: With such a terrible number one would expect the dolla rto strengthen to levels like 80. That is not happening. Euro continues to hold its grodun above 1.4 and gold is well above 950. That has been my point all through out. We are seeing the rarest of opportunities to short build on dollar. Central banks around the world are shiofting from dollar assets to euro assets. The time and moment is coming when US will completely be bankrupt. Best of luck to those who are still holding fort going long with dollar.
Investing contrarian has been updated:
1. IMF Vote share change
2. Jobless recovery to last
3. Surplus nations are shifting strategies
4. The inevitable: Japan – China
5. G20 Graphic
Fresbee
October 2nd, 2009 at 9:09 am
LB predicts a dramatic drop in bulltard comments. People under-estimated the problems with local/state layoffs.
Over at BRIAN the BROKER’s office, the phone is ringing.. but BRIAN is on vacation. Commissions, baby !! Meanwhile his assistant TAWNY is soothing worried inwestors like JOHNNY Retail. Will JOHNNY sell ????
October 2nd, 2009 at 9:09 am
Back to worser than expected, looks like trimtabs was right again. Trimtabs said there will be catchup revisions by gummint.I have to look up prior month revisions. Trimtabs siad there will be a big adjustment for first half of year.
October 2nd, 2009 at 9:10 am
Barry Ritholtz Says:
October 2nd, 2009 at 9:01 am
Now we get to deal with all the EMH folks who will claim that yesterday’s whackage ANTICIPATED today;’s number.
reply:
———-
I think you might be on to something. The sales pundits might say …..
“The market is going up. Yesterday’s buying opportunity discounted the whisper number of today’s unhappy labor numbers. Since the market is the world’s most perfect discounting mechanism, it has already priced in the next correction.This means the market is bottoming as you read this. This is a generational market. You have to get in now before it’s too late.”
October 2nd, 2009 at 9:11 am
World’s shortest recovery, stimuli and Uncle Ben’s printing press jacked us out of recession for a Q maybe and now we’re starting another leg down?
October 2nd, 2009 at 9:11 am
What is really disappointing is that the revisions – the revisions, for chrissake – were negative as well for July and August 2009. That means the headline number is lower than it would have been had the employment numbers for August just stayed the same. Small business is being crushed by the lack of available credit and customers and big business rarely hires going into the end of the year. It’s look like the coal industry has a viable market for its products as gifts going into the holiday season this year.
October 2nd, 2009 at 9:11 am
Greenshoots got a hard frost in early Oct!
October 2nd, 2009 at 9:14 am
Barry, did you see hours worked down to 33.0 – autos cutting back again post-clunkers?
October 2nd, 2009 at 9:15 am
Watching CNBC this morning, I’ve come to the conclusion that economics is one of the few professions where you can be considered an “expert,” without ever getting anything correct… I know that brain surgeons, pro football quarterbacks, auto mechanics, and dentists are never perfect, but in those professions, you can be confident that they do their jobs better than the average Joe Sixpack on the street…
HCF
October 2nd, 2009 at 9:15 am
dss Says:
October 2nd, 2009 at 9:07 am
I had a funny thought, wouldn’t it be funny if HW was hired as part of the Recovery Act to post inane bullish comments, the more outrageous the better, on message boards, like mind control?
reply:
———
NO! Who would do such a thing? A shill, right here, where we hang out, trying to fool us? (My sentiment exactly, only I don’t have any fucking rules that make me have treat each shill, nutball, liar, phony or undercover sales pundit with respect or credibility. I’m not CNN after all. I personally think H Wanker is really Joe Kernan)
October 2nd, 2009 at 9:25 am
There’s lots of pent-up anxiety coming out in the econ/finance blogosphere. 200 down seems to have had the the equivalent effect as looking down while walking a tightrope. No matter how you look at TBP, it ain’t good. At what point do we see bread lines? Civil unrest? Will our faith-based social safety net save us? Are middle class folks now the new Katrina refugees? Which is more likely to lift us out of this, war or financial innovation/monetary policy?
OTOH, maybe we’re entering a new decade of prosperity, as HW was arguing just the other day (WTF do I know?).
October 2nd, 2009 at 9:26 am
Anyone think we see a 9-handle on Spoos today? Or does that happen Monday? Will spx 1000 be defended?
October 2nd, 2009 at 9:29 am
Bruce in Tennessee, that’s pretty much what I was trying to say a few weeks back when Barry brought up the question of “what defines a depression”. It is a difference in kind, not degree, I believe, and your link supports that.
Recession = inventory-led recession
Depression = balance sheet led recession
October 2nd, 2009 at 9:31 am
Barry, did you see hours worked down to 33.0
I keyed in on that too, Lefty. Credit Mr. Rosenberg for teaching me that there is an employment equivalency to movement in that number.
October 2nd, 2009 at 9:33 am
[...] September nonfarm payrolls fell 263,000 versus expectations of a 170,000 decline. http://www.ritholtz.com/blog/2009/10/ugly-nfp-263k/ [...]
October 2nd, 2009 at 9:34 am
Marcus Aurelius Says:
October 2nd, 2009 at 9:25 am
There’s lots of pent-up anxiety coming out in the econ/finance blogosphere. 200 down seems to have had the the equivalent effect as looking down while walking a tightrope.
reply:
——–
They should be a little worried. Having the world markets rise because of central balk liquidity injections which were powered by HFT techniques (Money x Velocity) is basically a Ponzi scheme. There’s no organic growth. It’s all asset inflation. The last one in is the sucker holding the bag.
Tick Tick Tick Tick. I still envision the countdown on the laptop from Independence Day. Except for the alien influences, this is similar.
October 2nd, 2009 at 9:36 am
“Which is more likely to lift us out of this, war or financial innovation/monetary policy?”
lift us out. haha. war’s out methinks so it’ll have to be monetary policy. See below to visualise:
http://bilbo.economicoutlook.net/blog/wp-content/uploads/2009/08/Japan_call_rate.jpg
We’ll have a tranquil sea of liquidity stretching out as far as they can see. But salt water, not fresh. What else could unlimited QE possibly deliver?
October 2nd, 2009 at 9:39 am
we are getting into a tunnel vision group think…(i am bearish on economy….no idea about market)
things that send market up:
1) government gives free money to make up for all the losses
2)government wants market to go up since that boosts confidence of sheeple…and it looks like things are getting better.
3)around 80% of money in the market is long only(mutual fund, pension fund & most retail investors).
1=atleast 2-3 trillion , 2-policies (i dont beleive in conspiracy theories)
3-100s of billions flow in every month automatically.
October 2nd, 2009 at 9:42 am
Marcus Aurelius Says:
“There’s lots of pent-up anxiety coming out in the econ/finance blogosphere. 200 down seems to have had the the equivalent effect as looking down while walking a tightrope. ”
Funny, the image I had in my head all day yesterday was this one:
http://cfs11.tistory.com/image/13/tistory/2008/12/13/01/40/494293e7eca9d
Not looking down, but not looking good either.
October 2nd, 2009 at 9:42 am
Re: The BinT link to nakedcapitalism article:
In part, the article, if I understand it correctly, says that the big unknown in our decline is timing (our trajectory already having been determined). It could be sudden, and it could take years (later in the article, there’s an argument for sudden — as whiplash from the quick run-up).
Which will it be?
October 2nd, 2009 at 9:46 am
Oddly, the only people who are looking better in this month’s report are folks with *less* than a high school education:
http://www.deptofnumbers.com/unemployment/demographics/#education
That still leaves them with a 15% U3 though. Ouch.
October 2nd, 2009 at 9:49 am
Marcus:
I gathered that the author thinks it depends on how government responds. But either way, we HAVE looked at the debt Medusa, both in the public and private arenas, and are forever changed…
October 2nd, 2009 at 9:58 am
Bruce, in the zirpworld scenario, what meaning does that debt really have? What’s the difference bewteen 1tn or 50tn when the cost of carrying it is so low?
October 2nd, 2009 at 9:59 am
A quick scan of the comments and lo and behold: no Harry. What a shock. The “mini-economic boom is here to stay, folks. Nothing to see here.
October 2nd, 2009 at 10:16 am
scepticus:
If you look only at a moment of time, today, the cost of carrying it might indeed be low the next 24 hours..that in calculus would be a derivative. But it is the time under the curve, integral calculus, that make it so bad. It is the time factor…and the fact that the debt doesn’t go away.
…How long can you force rates to zero in this global economy. And it is my opini0n (I don’t even play an economist on TV…) that within 24 months the dollar will practically be supplemented as the world’s exchange medium.
I am not pessimistic…one of the happiest guys you’d ever meet…but I do like to look at my own tea leaves, and I make my own economic decisions…thus far I have received amazingly more than I deserve..
October 2nd, 2009 at 10:36 am
The household data (Table A) shows that seasonally adjusted employment decreased from 139,649,000 in to 138,864,000 in September a difference of 785,000!
October 2nd, 2009 at 10:45 am
“within 24 months the dollar will practically be supplemented as the world’s exchange medium”
Not if it rallies on deleveraging and debt writedowns. The choice ahead of us…
October 2nd, 2009 at 10:48 am
Bruce
You’re a doc and you still remember some calculus from many years back? I’m impressed! Better than me. :)
October 2nd, 2009 at 10:52 am
We’ve gone on for too long just thinking about the short term (e.g. the low carrying cost of the debt). Eventually you have to think about the long term consequences. And if you don’t, you’re just kicking the problem to future generations, which is highly immoral.
And even if you’re not concerned about anybody else but yourself, even then you may be surprised at how quickly the debt curve rises and kicks you in the teeth in the present. It seems we just went through that.
October 2nd, 2009 at 11:10 am
Onlooker
Well, if you’re going to spend so much money to get back on your feet, the money should be directed at rebuilding for the future, not give the impression that things are getting better or less worse.
I like the projections for unemployment, we’ll be back to 7% in two, three years…bla bla bla, with what?
What is the strategy for unemployment for the next 25/50 years?
I feel we will never get out of this mess if we don’t have a constructive plan, and throwing money at banks is worth nada.
October 2nd, 2009 at 11:21 am
I was an electrical engineering major in college.
Thanks.
October 2nd, 2009 at 11:23 am
Bruce
Well that explains it a bit! That would make it stick a bit better than the calc I took as a biology major. That was why I thought the same about you. Just goes to show how assumptions work…
October 2nd, 2009 at 11:25 am
beaufou
Agreed. We’ve gone too long borrowing for consumption vs. investment in the future. And we’re still doing the same in such egregious manner (CFC, home buyer’s credit, etc.).
October 2nd, 2009 at 11:26 am
They had a quaint term when I was growing up that used to be called “debt retirement” ….it was what people in a capitalistic society did when they took on debt…and debt is necessary….
But if you had a mortgage, you took on that debt burden to buy something you needed…a house..knowing that you’d pay it off in several years..
Our public debt is taken on without that debt retirement aspect for the last few decades…IH’s (idiot Harry’s) talk of growing fast enough to service the debt, but when we have recessions/depressions andeveryone expects government to spend more, the lack of debt retirement bites you in the butt. As it has for the private citizen who’s followed the government model of late…
Debt medusa…
October 2nd, 2009 at 12:23 pm
Barry,
What do you think about these reports:
http://market-ticker.denninger.net/archives/1485-September-Unemployment-ACTUAL-LOSS-995k.html
I’ve seen this 1 million lost jobs in a month meme reoccur a couple times recently.
October 2nd, 2009 at 1:48 pm
2016 Olympic Bid Vote Totals
1st Round Rio 26 Madrid 28 Tokyo 22 Chicago 18
2nd Round Rio 46 Madrid 29 Tokyo 20
3rd Round Rio 66 Madrid 32
:-(
October 2nd, 2009 at 1:58 pm
I just did a Olympic Bid total-up … can’t explain 1st 94 .. 2nd 95 .. 3rd 98
October 2nd, 2009 at 1:58 pm
I demand a recount…Chad’s vote was left hanging…
October 2nd, 2009 at 2:22 pm
IMO it’s the best thing that could happen to Chi town. Just a black hole for money, those Olympics. Maybe further in the future once we get out of our hole and can actually afford them; optimistically.
October 2nd, 2009 at 2:48 pm
BnT – “I was an electrical engineering major in college” um what do you operate on at the saltmine? electronics or bodies? or accounts?
October 2nd, 2009 at 4:36 pm
Greg:
Human beans, greg, just human beans…
October 2nd, 2009 at 9:06 pm
But by the end of the day, the markets were little changed. I guess because the dollar was falling. Given the economic numbers over the last week in particular, stocks and the dollar should both be falling.
October 2nd, 2009 at 11:14 pm
I heard Kudlows take on the Chicago/unUSA bid miss .. it looks like the IOC never had Chicago/unUSA in the running at all … I read the comments in the hit-n-run cartoon too …
it would have been good for jobs around here .. and good for manufacturers of buildings products (I guess that happens to some extent anyway since Americas corps supply the world with electrical outlets and PVC pipe .. but Brazil probably mines/makes their own cement)
would have been good to draw some foreign cash into America (help balance the deficit) .. and until 2016 some cash flow
for that pyramid project .. now what unUSA .. natural gas trucker plazas and electric cars with a new grid?
now the slam back from a midwest unUSoAn .. couldn’t be the tv rights fight .. or couldn’t have been paybacks for “Washington and the Financial Capital of the World” nuking the whole f’in globe
and for any locals that might have said the money could have been better spent other ways .. sure go convince folks to pony up for your dreams of fun times and big paybacks
but having said that .. and just learned today South America has never hosted .. well – sour grapes taste ok .. Best Wishes pulling off your games Rio
October 3rd, 2009 at 7:36 am
my gut tells me Mr Kudlow would have something like this (could be wrong) to say if POTUS didN’T go to Copenhagen .. “the IOC hotley snubbed us in the 1st round .. Obama couldn’t break away from this health-care waste of time & money to gladhand for real jobs and capture the prestige of host’g the games .. like my friend from GB Tony Blair did in the final hour”
thats a cheerleaders job .. yell it for the team
can we get a media back that reports more & purports less .. please – pretty please with sugar on top .. for the unUSA