Posts filed under “Cycles”
You may recall that last month we picked up on a troubling signpost in the divergence between temporary hiring and private sector payrolls (less temps). In that post, I produced the following chart (below is from last month’s post, not updated with most current data):
But here’s the thing: Temp jobs are now up 19.6% year over year, a record for the series going back to 1990 (when BLS began tracking it). Private sector jobs less temp jobs are still down 0.7% year over year. Historically — and I’ll admit going back only to 1990 isn’t a particularly robust data set — when temp jobs are up over 10% year over year, private sector jobs (less temp jobs) are running in the range, on average, of +2.4% YoY, not -0.7%. In the 20 year history of the series, never has the year over year gain been 10% or more while the private sector (ex-temp) has been negative.
Again, we may have a problem on our hands as the growth in temporary jobs has run away from the growth of the private sector. Now, temp jobs could continue setting YoY records — I wouldn’t rule that out at all. However, we do need to see the private sector start to kick into gear and play some serious catch up. As I’ve groused many times before, we’re starting to see late-cycle prints in some series, and we’ve barely even begun to put people to work. Very troublesome, to say the least.
Well, Temp Services declined by 5.6k this month in Friday’s NFP report, and the WSJ was all over it:
Does the Drop in Temps Signal Trouble Ahead?
Temporary-help employment is generally considered a leading indicator for the overall labor market. So July’s decline in temp payrolls is a worrisome indicator for the coming months.
Again, many metrics now have a distinct late-cycle feel to them. Temp Services, for example, is startinig to run into some difficult comps, as are many other data points (including, eventually, corporate earnings, which are still coming off a fairly low bar). Come on, WSJ, read TBP and you coulda had this story last month.
(Invictus here, friends. Please note that technical problems booted me out of this post before I was done with it, and it posted before I could get back in. Therefore I’m doing I’ve done some after-the-fact editing, which I would normally not do.) As readers may know, I have used some pixels here and elsewhere exploring what…Read More
Okay, so here’s today’s thought experiment. Instead of putting up some charts or tables and providing my own interpretation (not that I’m ever shy about doing so) , I’ve decided to post a Rorschach Chart. Below is a comparison of two data series that have a meaningful correlation (>0.70, with a lag in this case) over time. The two series are identified below the fold. For now, here’s the chart. So, what does it all mean (if anything)?
NOTE: Blue line goes to the right-hand scale, red line to the left-hand scale.
(Data Source: St. Louis Fed)
(Invictus here, boys and girls) As I have written previously here and elsewhere, I tend to look at everything through the lens of job creation. What is the correlation of a particular release to the job market, if indeed there is one. Does it lead? Lag? Is it coincident? If I can find a meaningful…Read More
The Case-Shiller Index printed this morning, so a bit of chart/table porn is in order. Below is a 20-in-1 look at the Composite 20 (both the chart and the table are NSA): 19 of the 20 metro areas showed sequential gains for the month, the only laggard being Las Vegas. Here’s a nostalgic city-by-city look…Read More
The Chicago Fed’s National Activity Index (CFNAI) printed this morning at 8:30 AM Eastern. As always, Calculated Risk covered the release, so I won’t rehash what’s covered over there. However, I will note — as I have before — that the Personal Consumption & Housing subcomponent remains mired in deeply negative territory. In fact, it has…Read More
I hate it when two people I know and like do battle. This week, it is Mike Shedlock of MISH’s global economic analysis squaring up against my friend and work neighbor, Lakshman Achuthan of the Economic Cycle Research Institute (ECRI). Mish ripped ECRI in an unsparing critique this morning: ECRI Weekly Leading Indicators at Negative…Read More
In his Washington Post column last week, Fareed Zakaria laid out the argument that Obama is anti-business (Obama’s CEO problem — and ours):
“The Federal Reserve recently reported that America’s 500 largest nonfinancial companies have accumulated an astonishing $1.8 trillion of cash on their balance sheets . . . And yet, most corporations are not spending this money on new plants, equipment, or workers . . . The key to a sustainable recovery and robust economic growth is to get companies to start investing in America. So why are they reluctant, despite having mounds of cash lying around?”
Answers to Zakaria’s questions apparently came from “business leaders” who “wanted to stay off the record, for fear of offending people in Washington.”
“Economic uncertainty was the primary cause of their caution . . . But in addition to economics, they kept talking about politics, about the uncertainty surrounding regulations and taxes . . . But all [the business leaders] think he is, at his core, anti-business.”
First, a look at the series in question:
For starters, I disagree with Mr. Zakaria’s notion of what the key is to a sustainable recovery. Since we know that Personal Consumption Expenditures comprise 70 percent of GDP, I’m not sure why “getting companies to start investing” would be considered the key. The demand problem we have on our hands is what is keeping companies’ spigots closed.
I continue to sit in the camp that says the US economy is slowing, but not rolling over. I won’t rule out a recession in 2012, but I don’t see one over the next 2-4 quarters. Here is yet another piece of that puzzle. While everyone continues to over-emphasize recent housing and employment data, ECRI…Read More
The Chicago Fed’s National Activity Index – one of my favorite measures — printed this morning. The monthly number edged down slightly, and the 3-month moving average, which the folks in Chicago tell us to focus on, rose somewhat. Here, however, is the money shot from the release (my bold): May’s CFNAI-MA3 suggests that growth…Read More