I have over the years discussed what a poor economic recovery this cycle has been in terms of job creation. Given the lack of robust job creation, its not a huge surprise that layoffs typical of most recessions have yet to appear.
Merrill Lynch’s David Rosenberg notes it has become "economic myth" that the April employment report was benign. In particular, he notes that hours worked, one of the employment metrics reported by the BLS, is rapidly declining. In the April NFP release, hours worked plunged:
"Companies did not cut as many positions as expected, they cut the hours instead. The average work week plunged 0.3% (and, aggregate hours worked were down at an annual rate of 1% in the past three months), which, by the way, would be the equivalent of 400,000 job cuts.
This is a sign that labor market conditions and domestic demand are far softer than the headline suggests. What drives consumer spending inevitably is income growth. Average weekly earnings fell 0.2% sequentially in April in what was the largest decline in two years. This dragged the year-on-year rate down to 3.1% from 3.3% in March, 3.7% in February and the nearby peak of 3.8% posted last November in what is clear disinflationary trend in wages.
The rebound in the Household survey was all in part-time employment. While there was a nice rebound in the Household Survey, it was all in part-time employment – that is not the driver of confidence and spending. Growth in full-time jobs is what drives those things. And, full-time employment actually fell 375,000 in April and is down 572,000 year-to-date; of the folks who were working part-time in April, the number doing so because of “economic reasons” (mostly slack business conditions) surged 306,000 or 6.3% – again the steepest runup in two years. The diffusion indices fell through the floor to 45.4 in April from 48 in March – this measures the share of industries adding to payrolls and shows that even though the headline job loss was lower than expected, the decline was very broadly based across sectors. (emphasis added)
In case you missed the underlined text, employers cut back so many hours that it was the functional "equivalent of 400,000 job cuts."
This is not the sort of data you associate with economic recoveries.
Macro viewpoint: Debunking five myths
David A. Rosenberg, North American Economist
Merrill Lynch, 09 May 2008
Job Creation: Post-Recession Recovery Cycles April 05, 2008
We have previously reviewed the Uncle Sam’s withholding tax data as a read into the overall health of the economy. The most recent data point (March 13) shows W/H tax reaching a 23 month low. But we don’t like to rely on any single data point, especially one from a volatile series. Instead, look at…Read More
Another appearance on Kudlow & Co. tonite, from 7:00 to 7:30pm (ish).
Also on tonite: David Malpass, Bear Stearns chief economist, Jimmy Pethokoukis, senior writer at U.S. News & World Report, Andy Busch, global FX strategist at BMO Capital Markets, Jim Awad, chairman of WP Stewart Asset Management, and Don Luskin, chief investment officer, Trend Macro.
Note that Jimmy Pethokoukis and I have a bet as to whether or not there is a recession or not.
UPDATE: May 14, 2008 11:47pm
Considering it was 4 on 1, I thought I held up pretty well.
Its that time of year: New York City is flooded with tourists. Thanks to the weak American Peso, the place is just thick with ‘em.
There are lots of standard guides you might find helpful to use (i.e., NYC Guide for Tourists), but they are primarily designed for that gullible visitor, the double decker riding, Hawaiian shirt wearing, one born every minute visitor — the Rube.
That’s not you. You are much hipper than that. You want to be in the know, plugged in, well connected. Well, ya came to the right place. I’m going to give you the straight dope, the inside info that the guidebooks don’t tell you about. This is real insider trading, "Blue Horse Shoe Loves Anacot Steel" type stuff that people go to jail for. Not you or me, but people. Some people. Mostly tourists.
Anyway, instead of relying on a Fodors or Let’s Go NYC, consider these suggestions from a born and bred Nu Yawkah (I even got dah aksent dat gos wit da place). A Brooklyn born guy who works in finance and has worked in NYC most of his Adult life, this guy knows a thing or two about Gotham.
These suggestions will help make your stay in the city enjoyable and safe. It well help you get the most out of your visit here. As an added bonus, I get to keep all of you birkenstocked, rucksack wearing, slow walking, camera snapping touristas out from underfoot of us locals.
A New Yorker’s Guide for Tourists: 20 Ways to Make Your Stay in New York City More Enjoyable
1. DO NOT DRESS ALIKE. This is for your safety, as well as for the benefit of the typical New Yorker’s highly refined aesthetic sense. At all costs, avoid wearing identical
matching outfits. Worse than looking like hicks from the sticks, you will look like a group of out-of-towners begging to be mugged.
I don’t mean literally mugged by a criminal element, but rather, robbed by
unscrupulous taxi drivers and retail merchants alike. They will spot you
as a rube, and be all too happy take advantage of your apparent
naivete to lighten your wallets.
You might as well carry a sign that says "Rob Me!" — and they
The corollary to this is to avoid festooning every item of clothing you have on with "New
York, NYC, or Yankees" logos — No one is THAT big of a fan — for the same reason as above.
2. BATHROOMS: Here’s the thing: There just aren’t many public bathrooms in NYC.
Why? Its a long story, which I don’t have time to go into, but there just aren’t that many. Plan accordingly.
Barnes & Noble/Borders Bookstores
The nicest public toilet in the city is Bryant Park at 42nd Street between 5/6. Sometimes there is a wait.
For those of you who have real, um, reallygottagonow issues, its best that you plan ahead. Get a copy of Where to Go: A Guide to Manhattan’s Toilets. Thats right, the NYC toilet situation is so absurd that someone wrote a book about it.
On the plus side, the Rainbow Room and the Grand Havana Club have some of the nicest bathrooms I’ve ever been in — floor to ceiling windows, right next to the urinals!
3. Tipping: The city has a service-based economy, and tipping is encouraged/demanded/insisted upon.
Some basic suggestions: 15% of the bill for "Fair" service, 20% for
"Good" service. This applies to waiters, waiteresses, bartenders, cab
drivers, call girls, etc. Note that you can easily ballpark 15% by
doubling the tax (~16%). Chamber maids should get $5 per day.
Leaving a 5-10% tip is considered a complaint — but stiffing
(leaving nothing) is not perceived as a complaint, but as a sign of
Note that for large parties (6 or more) some restaurants
automatically add the tip to the bill, so double check that bill (don’t
4. See a LIVE TV Show: This requires some advanced planning, usually 6 months to a year ahead of time. I suggest Late Show with David Letterman, The Daily Show, The Colbert Report, Late Night with Conan O’Brien, and Saturday Night Live (email SNL TIckets).
If you did not plan in advance for this year, no worries: Just diary this for next December or January to order tickets for Summer 2009.
Imagine where the US Dollar will be then — we’ll practically be paying you to come here!
5. Do a bunch of local New York things: Hang out in
Central Park, Explore Brooklyn, wear black, enjoy the
free WiFi in Bryant Park (use the bathroom there — nice). Attend a
lecture at the 92nd ST Y, go to
Chinatown in Queens. Buy junk at a street fair, and eat street meat (don’t ask). Have a cigar at the Grand Havana Room (members only). Catch an author speak at a Barnes & Noble (use
the bathroom while you are there).
Spend a weekend at Fire Island or the Hamptons (make arrangements first). Go to a designer sample sale. Do the NYT crossword puzzle on mass
transit. Jog around the reservoir in Central Park. Go to a
Woody Allen retrospective. See the Mets at Shea.
The ultimate New Yorker
activity? Buy the Sunday NY Times late Saturday night; skim it, then
lounge around early Sunday morning, with the paper — and a pot of
strong coffee — in bed Sunday morning. Heavenly!
6. iPod walking guides