December Non-Farm Payrolls Report Will Give Presidential Candidates Something to Talk About (that Would be ‘Recession’)
Today’s a day to just talk about the economy - as the Presidential candidates are no doubt finding out. The verdict from the Bureau of Labor Statistics on December was downright depressing: on net, non-farm payrolls (that’s jobs, as measured by the survey of establishments) rose by just 18,000 during the month. That’s the fewest number of jobs created since August 2003, and it is way below the consensus forecast out there of about 70,000 jobs (which was fairly glum anyway). The U.S. unemploymetn rate rose to 5 percent during the month from 4.7 percent in November.
The details of the report were predictably depressing too - fewer jobs in manufacturing, construction, finance (read: spillover from the subprime crisis), retail trade and more. If you’re looking for a ‘bright spot’ it is that government hiring is up. Not that bright, is it?
Here’s the thing: when you’re looking for signs of a recession, the last thing you monitor is the labor market. Other things–manufacturing activity, the stock markets, the housing market usually turn down first - which by the way they have already. Bonds usually rally, which has already happened too. By the time you get to the point where unemployment is on the rise - well, you can probably use the ‘r’ word, or at least give it some thought.
So yes, let’s look for an interest rate cut or seven and hope the whole mess turns around soon. As it stands though, 2008 is starting out on a pretty scary note. Any ideas anyone (especially those of you who want to be President)?
