BLS data has hit the tape, and its a bit of a yawner. As I write this, Dow and S&P are marginally in the green, Nasdaq and Russell 2000 marginally in the red — but fading.
The survey was weak enough to allow the Fed to cut, but the 50 basis point slash that so many have been begging for is now likely off the table. According to the Fed Funds Futures,
rate cut odds for a 50 bps cut next week have fallen to 28%, vs. 50% as of
The Negatives: This was the fifth sub-100k NFP report over the past 6 months.
Yesterday, we extensively discussed the birth/death model. As we noted, the birth/death model contribution continues to rise as a total percentage of new hires. It was 51k jobs this month, versus 36k
back in November ’06. It also measured Construction hires as flat, and Financial hires rising 12k. Those two points confirm our view that the B/D model is continuing to overestimate hiring.
in September and October figures brought job growth for those two
months to 214,000, or 48,000 fewer than the government had estimated a
A little less than a third of the newly created jobs were Government hires (30k of 94k). This points out a general weakness of the report; It also shows how far off the ADP number were for private sector hiring (and as we noted previously, this was likely a seasonal adjustment issue on ADP’s part).
The Positives: Temp hiring rose for the second consecutive month. Temps are usually a good leading indicator of future hiring and economic activity.
Bottom line: The labor market continues to soften, but as the Household survey shows, it still has some life in it yet. The slow motion slow down continues . . .
One of the things we have harped on for quite a long time here at The Big Picture is the flawed BLS Birth Death Model (BDM). Since 2003, the B/D adjustment has been part and parcel to BLS’ Current Employment Statistics (CES) program, the official measure of US employment. In brief, the Birth Death adjustment…Read More
Congrats to my pal Paul the K on his new web TV gig with Yahoo:
Yahoo TechTicker To Go After CNBC Crowd: The show will be called TechTicker, and it launches
in January. The goal is to attract the CNBC crowd – people who want to be
immersed in finance news all day long. The hosts include Henry Blodget (Silicon Alley Insider), Sarah Lacy (Business Week columnist) and
Paul Kedrosky, plus one additional person who
has yet to be named. The team will produce 10-20 original segments per week day,
which will be shown live on the site. When live content isn’t streaming, old
content will show on a loop.
Look out, Howard, they are coming after you!