I am getting my expired Passport renewed, so I will miss all the fun with today’s fugly Employment report.

A mere 54k jobs created in May, vs. estimates of 150k-160k. Unemployment goes to 9.1% from 9%.

Feel free to share any insights, or data analysis you may have.

Be back soon…

Category: Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

51 Responses to “Punk NFP Report”

  1. TraderMark says:

    Some thoughts on the figures…

    http://www.fundmymutualfund.com/2011/06/big-disappointment-in-jobs-creation-at.html

    Participation rate remains very low; flat for the 5th month. So unemployment rate hike not due to new job entrants. Only real positive was wages at +0.3%. Essentially the job blitz by McDonald’s was the entire marginal growth of jobs in the US in May.

  2. wally says:

    The political implications are large.

  3. Mike in Nola says:

    Looks like a good time to cut spending to me. Would do wonders for my Treasuries.

  4. rktbrkr says:

    Jobs, we don’t need no stinking jobs.

    Remember the jobs rate was adjusted early in the year and brought the rate down .4% – without that adjustment we’d still be at 9.5%.

    We’re playing the back 9 on the O’Bama stimulus effects and states and munies are clamping back.

    QEI and QEII really weren’t targeted at job creation and probably didn’t have much effect and with or without QEIII jobs will probably continue their low trajectory, all QE has done is raise living expenses for those with and without jobs.

    Recovery, we don’t have no stinking recovery.

  5. GreatWarrior says:

    Heard something like 206K Birth/Death model Fake jobs!

    Thank God for the FAKE jobs!

    This is clear political pondering. After 3 years of 110%-revised-away-to-zero Birth/Death jobs, BLS still continue to add 200+ fake ones every-month.

    Wonder why the model refused to get revised???? 3+ years of Wrong data model still valid? Is it a computer model issue, or human intervention? (Obama?? or Dick Cheney? LOL)

  6. GreatWarrior says:

    Sorry, Birth Death jobs here.

    http://www.bls.gov/web/empsit/cesbd.htm

    3+ years of computer model tradition — always report better number to pump market today, yet quietly revised away to nil later.

    Birth/Death Fake Jobs is now MORE than REAL jobs. lol!!

  7. dead hobo says:

    Mike in Nola Says:
    June 3rd, 2011 at 9:10 am

    Looks like a good time to cut spending to me. Would do wonders for my Treasuries.

    reply:
    ———–
    Your treasuries will do well without spending cuts, although cuts won’t hurt any. I half expect an Armageddon scenario of sub 2% 10 year rates by September. QE 1.5 / 2.5 will put maturities where they will likely assist housing. The flight to safety will go over the top regardless.

  8. PrahaPartizan says:

    Just remember, making the “numbers” is sacrosanct. Corporate America is just starting to respond to the reduced growth prospects now being forecast for the remainder of 2011. They hired in the early part of the year at a rate expecting growth rates in the mid-3% range. Now, that number’s getting scaled back to 2% total for the year. Contracts for materials and parts have already been signed, so the only thing left to throw overboard are the employees. Business planning reviews for 2012 will be starting in earnest within the next four weeks in most firms as they look at readjusting for the crappy economy in the 3Q2011 and what they might need to do with staff in the 4Q2011 if the economy weakens further. How else do we expect the executives to “earn” their bonuses for the year? Firing a ton of staff will do wonders for the stock price too, because it will give the impression on the Street that the brain-dead dolts squatting in the executive suites have a clue about how to generate some positive momentum. We shouldn’t be surprised to start to hear in September/October that the lay-off announcements are up by a factor of 200% or 300% from Corporate America.

  9. Ted Kavadas says:

    There are many aspects of this (un)employment situation that remain highly worrisome…

    IMHO a strong case can be made that the entire job market is substantially different than in the past. This can be seen in a variety of measures, some easily quantifiable and others not. A quick look at various aspects of the unemployment situation supports this view. Here is a recent blog post that shows the unemployment situation from a long-term historical perspective:

    http://economicgreenfield.blogspot.com/2011/05/3-critical-unemployment-charts-may-2011.html

  10. constantnormal says:

    ” … am getting my expired Passport renewed”

    … Let the Internet rumors begin!

    [noted Internet and market pundit Barry Ritholtz was seen in a queue of those seeking papers to leave the country ...]

  11. RandyClayton says:

    Even before the 2008 crash we had weak and inconsistent growth. This NFP matches the low back in Sept 2010. The S&P500 is now 5% below the recent peak. SO, to me ir just looks like more of the same, or at least the same before the crisis. Need to see what the next 2 or 3 NFP’s report before declaring the next end of the world.

  12. RC says:

    Last proof of the slow down induced by high oil price. The big banks saw commodity trading revenues up 55%. This data points also suggests that it was the commodities bubble, inflated by the big banks, that led to this pronounced slow down. How else can we explain that in the face of continuous tightening by Chinese central banks to clamp down on overheating, we still see commodities going in a straight line up.
    Transfer of wealth from main street to wall street continues.

  13. ironman says:

    The employment situation is worse than the unemployment rate suggests – the rate itself should be falling pretty dramatically with the expiration of jobless benefits for people who were laid off in the automotive industry over 99 weeks ago (who were originally laid off in the period from October 2008 through May 2009, as a large percentage of those individuals have not been able to find new work, and are no longer being counted as being unemployed.

    (To claim unemployment insurance benefits, you have to state you’re searching for work – for individuals who are no longer eligible for benefits, and who have given up on finding new work, there’s no longer any need to make such a claim, so they’ll be dropped from the official unemployment rate calculation.)

    Instead of falling because of this effect, the unemployment rate is inching up, which means that new jobs are being added at an extremely low rate – far too low to even keep the unemployment rate steady even as the number of people counted as being unemployed has been falling. That, in turn, means the economy was just sputtering in May.

    Look for things to get a bit better if oil and gas prices continue to fall, however, any price above the range of $3.50-$3.60 per gallon on average in the U.S. will tend to increase unemployment.

  14. kenny powers says:

    Adjusting for the B/D bullshit, the economy lost 150k jobs. Cue market sell-off until the Chairman decides to fire up the printing presses again at about 1000 on the SPX?

  15. b_thunder says:

    is Fusion IQ still 70% net long?

    how about @4Pm today?

  16. franklin411 says:

    The Conservatives came to power in Britain in May 2010 and began cutting the budget like a blind woodsman. Unemployment has surged and their economy has shrunk every month since then.

    The Conservatives came to power in America in January 2011 and began cutting the budget like a blind woodsman. Unemployment has surged and the economy is on the verge of shrinking.

    Conservatives hate people.

    Any questions?

  17. This is perfect timing for a low if we are talking about the presidential cycle. A little more of this and suddenly Bernanke has an excuse to crank up QE3. Maybe they’ll let business sweat a little through the summer and by the fall they’ll be screamijng for intervention. Then they can fire up the presses and they can then keep that going right into the election cycle. The question is: Do the powers that be want Obama re-elected or has he served his purpose?

  18. AHodge says:

    bad as it looks
    not a recession– but major slowdown and govt tapped out to do anything
    (dont think this is Q3 desperation time)
    still i am taking my small long bond profits not going short yet, or buying stocks
    only good future news is oil commodity trend. oil now down 10% from highs, non core DEflation will help consumer even next month, reversing last two months where oil food gains knocked real spending down to 0.1% –nearly zero.

  19. Arequipa01 says:

    Fala voce portugues? Nao. Ta mal. Aprende de uma boa vez, louco.

    http://www.learn-portuguese-now.com/

    Also, roots of the Touro Synagogue in RI:

    “1630 Holland captures Pernambuco, Brazil from the Portuguese and invites Jewish settlement. A significant Jewish community develops in Recife. (Recife is the 4th largest metropolitan area in Brazil with 4,136,506 inhabitants.”

    I’m just saying…

  20. rootless says:

    @GreatWarrior:

    Birth/Death Fake Jobs is now MORE than REAL jobs. lol!!

    Your analysis is not correct. Total jobs added 682,000 in May. B/D jobs added 206,000. Both not seasonally adjusted. Obviously, The B/D jobs fraction of the total is smaller than the other part.

    I also don’t know why you claim that the B/D adjustment were “fake jobs”.

  21. Lukey says:

    Franklin411,

    Of course austerity is going to cause a (temporary) loss of jobs! How could it not? The idea behind it is that there’s no real (read: private sector) need behind the reason for those jobs to exist – they are a burden on the economy. That and a gazillion pound gorilla government and regulations out the wazoo (and a Fed acting like a four year old on a serious sugar high) is why the private sector hasn’t been creating jobs for the better part of a decade. We’re suffering under a punk economy now and not gaining anything from it so why not make it a little worse with a trade off that the private sector is given a chance to get its legs?

  22. Greg0658 says:

    imo the 2 Parties in America represent Labor & Management .. and Management does the hire’g .. the 2 parties are balanced by sales / but in part allowed to survive by the needs of stuff to exist in this industrial age (as opposed to agrarian age) … the laws we have on the books are allowing the robinhood effect to rebalance the world in favor of management .. its not tobe good years for the USA laborer forces (exempting the service sector of keeping the pipes flowing)

    I expect management to hire with the upcoming election in mind to kill the robinhood effect further

  23. rootless says:

    @kenny powers:

    Adjusting for the B/D bullshit, the economy lost 150k jobs.

    Your number is not correct. Subtracting out the B/D number, the economy added 476,000 jobs in May. You have to subtract from the not seasonally adjusted number to do it right.

  24. dbrodess says:

    You should use traveldocs.com (i’m not affiliated, just a fan). They can turn around in 24-48hrs & you don’t have to waste your time at the ppt agency….

    ~~~

    BR: US Passport office, NYC (Hudson Street). 24 hour turnaround = Awesome!

  25. Bokolis says:

    I still get queasy about hours spent (as a child) on line at the old Rock Center place. In a pinch, the drive up to Norwich will take longer than actually getting in and out. I’m speculating that, if a rush job, BR made an appt at the Hudson St. place…where’s the adventure in that? I recently renewed my passport at a (small town) post office…took 10 minutes and the passport came in 3-4 weeks…and the little old lady at the counter was all to happy to chat it up the whole while.

    Oh, you meant comment on the McJobs report? I hear Saks has work (or at least a fleeting uptick), so maybe there’s something to that Tiffany ecomony thing.

  26. Petey Wheatstraw says:

    QE I and II “saved” the banks and the markets (for a while). Will QE III keep us from getting pulverized by a strong dollar AND address high unemployment? Helicopters dropping cash, maybe?

    It’s been a long time since anybody asked what inning we’re in.

    I’d say bottom of the 3rd, and the home team is down 3T to zip.

  27. louis says:

    Passport renewal = Lot’s of hand sanitizer.

    When was the last time you saw a republican news conference on BLS data?

  28. franklin411 says:

    @Louis
    Jobs? What’s the point of creating jobs? The GOP hasn’t finished dealing with the Big Bird threat! Ernie is still out there! The Cookie Monster still stalks our youth! Jobs? Who has time for jobs?

    =P

  29. Robespierre says:

    Will something like this work? I mean the private sector does this kind of thing all the time…

    Remove excess supply of workers by allowing early SS-retirement. Offer those 55 or older to retire now as if they were at retirement age (no penalties) same for their 401k accounts. Make them eligible for Medicare. Also those taking the program are not allowed to work (earn salary) for the next 10 years.

  30. Robespierre says:

    BTW any time I need something related to my passport I FedEx it with an expedite fee attached to it. The only time I actually had to go somewhere to get something done was when I got it the first time…

  31. mikejewison says:

    For someone born after 1980, this type of a report enrages me even more over the priorities of our country. I was lucky enough to graduate in 2004; others are not as fortunate.

    I would also add that over the last 10 years, we have added around 25,000 jobs a month, compared to the 150,000 we need to keep up with normal population growth. Did the leaders of this country forget how to do math? Wait, I got an idea, how about slash and dash?

    Click on the first box (employment level) at:
    http://data.bls.gov/cgi-bin/surveymost?ln

  32. beaufou says:

    I saw a chart on Bloomberg TV showing the breakdown of those created jobs and small and medium businesses were responsible for 75% of them.
    But not to worry, big money will still rule the day in Congress and destroy what’s left of the economy.

    Trying to make sense of this stuff is like clapping with one hand, get some pop corn and watch this shit go down.

  33. beaufou says:

    There is an old adage that goes something like “you cannot stop progress”, nowadays I would suggest “you cannot stop regress”.

  34. Niskyboy says:

    Hey, I’ve got a great idea! Let’s get really, really into trade protectionism now so we can preserve the jobs we have left, and maybe even bring some back from overseas. No reason to think that wouldn’t work, right? Plus, think of how popular it could be politically.

  35. beaufou says:

    Great idea Nisky.

    In 1928, Hoover ran on a platform of higher tariffs designed to protect farmers from European competition. Congress passed the Smoot-Hawley Tariff Act in 1930; Hoover signed the bill although economists protested. It is unlikely that tariffs alone caused the Great Depression, but they fostered global protectionism; world trade declined by 66% from 1929 to 1934.

  36. socaljoe says:

    Why do we look to the government to create jobs?

    Lower public sector employment is a good thing, in my opinion.

    If $trillions of FED balance sheet expansion, monetary accommodation, and fiscal deficits haven’t created jobs… then what will?

    Maybe we need less government for all the special interests… stop sucking the wealth out of the private sector, get out of the way of entrepreneurs, and let them create the jobs.

    As a former entrepreneur and employer, I can tell you I would not want to hire anyone in this country’s economic, regulatory, and legal environment… and if I had to hire, I would prefer to do it in a foreign country where I am treated better.

  37. DeDude says:

    Lukey;

    The reason the private sector has not created a lot of jobs is (and always has and will be), that they don’t have anybody consuming their products and services. When you cut government you take away consumption from the private sector and they do not create more jobs – rather they cut jobs after a while, when it become clear that business is slowing. The private sectors “legs” are consumers (government and persons). Austerity does not give the private sector legs, it cuts them off from under. This is just the reality that has been observed every time austerity has been applied to early in a recovery.

  38. Liminal Hack says:

    “As a former entrepreneur and employer, I can tell you I would not want to hire anyone in this country’s economic, regulatory, and legal environment… and if I had to hire, I would prefer to do it in a foreign country where I am treated better.”

    Thats exactly what the bankers say when a responsible move to regulate their activities is attempted.

    Do you see the irony here?

  39. Petey Wheatstraw says:

    socaljoe Says:

    “Maybe we need less government for all the special interests… stop sucking the wealth out of the private sector, get out of the way of entrepreneurs, and let them create the jobs.”

    The elite private/government hybrid — corporatism — is sucking the wealth out of the private sector. The “entrepreneurs” have had free rein to exploit historically low regulation and taxation, but instead of creating jobs, they took the money to the bank (actually, they took over the bank, and looted it). More than anyone, the special interests are Defense/Security, Big Pharma, Big Medicine, Prime and Sub-prime Educational Degree Mills, the Banks, the Auto Industry, Big Oil, and their lobbyists.

    “… and if I had to hire, I would prefer to do it in a foreign country where I am treated better.”

    Don’t like the developed world? So go set up a sweat shop in some god forsaken hell hole. Hire goddamned children at a penny a day, if that’s what you want. I hear Afghanistan has low taxes, virtually no regulation, and a very small and weak government. Sounds like the ideal business environment.

  40. Robespierre says:

    @socaljoe Says:

    “As a former entrepreneur and employer, I can tell you I would not want to hire anyone in this country’s economic, regulatory, and legal environment… and if I had to hire, I would prefer to do it in a foreign country where I am treated better.”

    That just tells me how ignorant you are. Little regulation cuts both ways. Yes it allows you to exploit people….
    But it allows the government to confiscate your business when they so desire with no compensation to you. So by all means pack and set up shop in another country. BTW in some of those countries the owner is indistinguishable from the corporation and when there is wrong doing (real or imaginary) the owner goes to jail until proven innocent.

  41. Lukey says:

    Dedude,

    That sounds almost like you are suggesting government spending pays for itself in higher tax revenues. Isn’t that just the flip side of the ridiculous supply side claim that tax cuts pay for themselves? Demand stemming from government spending is just demand stolen from the taxpayer. How do you know there’d be no demand from the taxpayer if the government wasn’t reaching so deeply into their pockets? I hear that demand side argument all the time and it just sounds like a rationalization of big government. You listen to the entrepreneurs and they tell you they’d rather not hire in the US currently because government is so obtrusive. At some point I think we need to start listening more to them and less to the academic types pushing Keynesian snake oil…

  42. nofoulsontheplayground says:

    The put/call ratio has been very high all day long and the VIX has reversed from the AM highs. S&P 500 Put/call ratio is a little above 2, but it is still well below the 3 area where you get indications that smart money is selling.

    It looks like the initial test of 1295 SPX is over with, and we should bounce into Monday.

  43. Vergennes - VT says:

    This ‘situation’ we are in is the result of a complete political failure. Between the massive special interest lobbying, rampant nondisclosure of conflicts of interest and generally weak and mean politicians , dodging obvious blame and accountably, the outlook for everyones (but a few) well being is not good. Should have let those Bush tax cuts expire because cutting taxes discourages business investment as recent history shows.

  44. nofoulsontheplayground says:

    5-day ARMS (TRIN) is close to the 10 area, a number that typically has indicated a bounce is near.

  45. wnsrfr says:

    New perspective on the effect of higher taxes on job creation: small business owners that have success, i.e. strong positive cash flow, can build their wealth a number of ways. If they choose to take the positive cash flow as personal income, they will be taxed…and will have to grow their wealth through after-tax income. If they put the positive cash flow back into the business to grow it through hiring, they will not be taxed on the growth…and will be investing in something they have better control over than a mutual fund.

    If taxes are higher, the incentive to keep the positive cash-flow in internal growth (hiring) is higher. If taxes are lower, just take the cash and buy a new Mercedes.

    As a perspective, my cash flow just turned really positive this year, and I can keep it or finally hire some help, but with the tax rates so low…?

  46. DeDude says:

    Lukey;

    In certain situations there are certain types of government spending that pays for themself, when all is counted. The government taxing only takes away demand from consumers if it taxes consumers; so tax the rich and the investor class not consumers. If government taxes people speculating in oil, that taxing in reduce that speculation, lower prices, and increase consumer demand by lowering the amount of their income they are forces to pay for gas. If that tax revenue is invested in infrastructure it would help the economy and both increase income tax revenue as well as reduce unemployment cost for government. I agree we should listen to the businesses, and they have laud and clearly stated that what they need to expand are more costumers.

    The issue of “obtrusive” government is really not an issue of spending. You can have a large non-obtrusive government (spending no money on “obtrusiveness”, and a lot on infrastructure) or a small very obtrusive government (spending all its money on “obtrusiveness”). We don’t have to destroy the economy with policies that have demonstrated their failure before, in order to make government less obtrusive. I support the idea of making a long list of what businesses consider obtrusive government and evaluating if those things can/should be removed or their objectives can be obtained in a less obtrusive way.

  47. napster says:

    So says the Lukey:

    That sounds almost like you are suggesting government spending pays for itself in higher tax revenues. Isn’t that just the flip side of the ridiculous supply side claim that tax cuts pay for themselves? Demand stemming from government spending is just demand stolen from the taxpayer. How do you know there’d be no demand from the taxpayer if the government wasn’t reaching so deeply into their pockets? I hear that demand side argument all the time and it just sounds like a rationalization of big government. You listen to the entrepreneurs and they tell you they’d rather not hire in the US currently because government is so obtrusive. At some point I think we need to start listening more to them and less to the academic types pushing Keynesian snake oil…

    @Lukey:
    Really?

    You say some ridiculous things and appear more interested pursuing a paradigm that actually engaging in a dialogue. Saying someone “sounds almost like [they] are suggesting” an idea and then attacking that someone for the idea you say they are suggesting is what rascals with ulterior motives do.

    You think everything is just a “rationalization of big government” and eschew all of the discussion contrary to your paradigm as “academic types pushing Keynesian snake oil..”

    Others have made some poignant statements and have added thoughtful insight about this topic, so I don’t really need to comment. The sad fact is that Lukey cannot seem to understand anything at all because he prefers to lambaste false arguments. He relys upon heavily loaded political stereotypes to characterize what Lukey “suggests” is the opposition, because he doesn’t understand the depth and magnitude of the issues he pretends to defend. He’s an ignorant fool tosses spit-balls without paying attention to the class discussion.

    Lukey, you are the one who is obstrusive. Your ignorance is also more woefully because it is contrived.

  48. kenny powers says:

    Rootless: My (stupid) bad. I stand corrected.

  49. DeDude says:

    @napster;

    I think the problem is that people who reject Keynesian theories do so on the emotional level. They hate its implication, but since it basically is just a restatement of the GDP formula they cannot argue against it on the facts. You can hate the facts but you cannot argue against them. The best “argument” against it I have seen is that it has so far not been fully implemented (politicians fail in the “pay down debt” part), but that is not an argument against Keynesian theory, but rather against our politicians.

  50. kenny powers says:

    Personally I don’t reject all parts of Keynesian theory, not at all. The man was brilliant, and a very interesting and competent speculator as well. But one problem I have with Neoclassical economists today is the politization of Keynes, and that some are using their own mutant take on Keynesian economics to justify a social agenda. Keynesian thought has spawned great things and great economists, too (Steve Keen for example is brilliant and is one of my favorites among the post-Keynesians). The same goes for dismissing Keynes completely because of a libertarian agenda which is equally ridiculous.

    I am personally wholly unemotional about economic theory unlike many on this forum. It is after all, just theory. DeDude seems almost to equate neoclassical economics with physics, and claim all economic theory (well that which belongs in his camp, anyway) as scientific fact. That seems largely unsubstantiated, excessive and quite dangerous to me. There are differences between the results of economic modelling and real life outcomes as we keep learning.

    Economists like to say that “economics is hard.” Yes it most certainly is. But reality is infinitely more complex than economic theory. Hence the horrible track record of economists trying to predict the future. Chaotic reality gets in the way of neatly defined parameters.

    For those of us who try to learn about the market and economics, keeping an open mind to ideas from across the economic spectrum and focusing on empirical evidence instead of elegant theories only might be the best route to some insights to what the future might bring.

  51. DeDude says:

    I will agree with you that there are parts of Keynesian theory that has been twisted, bastardized and abused for peoples own agendas. I also agree that not every single word of Keynes is a fact. However, there are parts of Keynesian theory that is a fact and may leave some people uncomfortable (and in denial) because of its social implications. It is beyond denial that our GDP is 70% consumer spending and that anything impacting consumer spending would have to be considered the main concern for affecting our GDP (unless you could find something that had a huge impact on one of the components of the remaining small, 30%, piece of the equation). It also should be beyond debate that the cycle of: increased consumer spending -> increased business investment -> increased employment -> increased consumer spending -> -> -> can only be primed at the consumer spending level (businesses do not invest until the consumer demand is clear). Those who deny these simple fact do so based on an emotional political aversion against their implications in favor of helping the poor and favoring a less skewed income distribution. There simply are no practical examples or theoretical basis for rejecting the above, although it admittedly can quickly be overinterpreted.