US Dec. nonfarm payrolls total 74,000 vs. 200,000 est.; unemployment rate at 6.7% vs. 7% est.

CNBC ^ | January 10, 2014 | Jeff Cox

[1010RD]

I am in complete agreement with Steve Hanke on the damage QE is doing, but not for the reasons you list. Take a look at his analysis and tell me what you think:

http://www.financialsense.com/contributors/steve-hanke/fed-policy-making-credit-crunch-worse

[sefarkas]

“Non-farm payrolls rose by 74,000 jobs month-over-month (m/m) in December, the smallest gain since January 2011, and below the 197,000 increase forecast by economists surveyed by Bloomberg. November’s initial rise of 203,000 was adjusted higher to a gain of 241,000 jobs, while October’s 200,000 increase was unrevised. Excluding government hiring and firing, private sector payrolls increased by 87,000 in December, versus the forecast of a gain of 200,000, after expanding by an upwardly revised 226,000 in November, from the 196,000 initially reported. Average hourly earnings were up 0.1% m/m, below expectations of a 0.2% gain, and average weekly hours dipped to 34.4, missing the forecast for the rate to remain at November’s 34.5 level.

“Despite a decline in the unemployment rate to 6.7% from the 7.0% in November, below the expectation for it to remain at 7.0%, there were some negative offsetting factors. The fall in the unemployment rate was due to 347,000 people dropping out of the workforce and the participation rate, the share of the working age population in the workforce, fell 0.2% to 62.8% -the lowest in 36 years. ...”

[tallyhoe]

I buy for $200 and sell for $100 and make a profit!!!

[Diana in Wisconsin]

I was thinking the exact same thing this morning; you couldn’t pay me enough to be in her shoes. Who would be DUMB enough to take that job at this point?

She’s going to be a major whipping post...and then she’ll be thrown under the 0bamabus!

[Darth Reardon]

Not funny math at all. Consider X, the number of jobs that need to be created to,for example, maintain the unemployment rate after considering all other factors. Also consider E, the expected number of jobs created. X is independent of E. X=X, no matter if X<E, X=E, or X>E.

[Wyatt's Torch]

there are a number of great books on the topic. I’d be happy to recommend some if you are interested.

[Wyatt's Torch]

I think you and I agree on the root causes of the financial crisis: government intervention into the mortgage sector requiring the banks to make risky loans. That’s the underlying disease. The risky lending (then coupled with the synthetic credit market and the raging fever which was CDS’s - absolute best book on this was Michael Lewis’s “The Big Short”) was a later symptom of the underlying disease. And to this day the Obama administration is saying the banks need to provide loans to low income people. They don’t get it at all.

IMHO the QE is mostly offsetting the massive fiscal errors and policy of the government (not just Obama but the brain dead GOP as well).

I certainly agree that the bank heads should not have skated. Their banks needed to be saved to save the economy. But they did not need to be saved.

The main reason why QE in’t as effective is that banks are hoarding the cash and building up reserves. Reserve balances have gone up commensurate with QE. Supply side monetary theory states that the excess liquidity will be leant to the market increasing economic activity. the banks are merely shoring up their wounded balance sheets.

Agree with the rest. Great discussion. Thanks.

[Wyatt's Torch]

QE (the method in which liquidity is injected into the market, is not, in and of itself inflationary. It is if there is no demand. There is tons of demand. In fact, if there is demand for money and it is not printed, you end up with something far far far worse than inflation.

The Deflation Monster

[RckyRaCoCo]

Have you ever seen David Faber/CNBC's "House of Cards"(not the follywood TV series)?

I thought it was a decent representation of the debauchery going on during that time. Of course, it's an "NBC" piece, so it's going to(at least)slant left...by simply removing characters that are, or have any affiliation with, 'rats...and thus, could potentially put THEM in a bad light.(MSM will have none of that).

PBS has been running documentaries(Frontline series)also on the subject, of course anything PBS(like NBC)I'm sure has a "leftist protection filter" on it.

[Resolute Conservative]

No, the sad part is majority do not know because they are: a) stupid, b) sheeple, or c) too busy watching football, dance moms, or DWTS, d) too busy facebooking, or e) any combination of a-d.

[Wyatt's Torch]

I saw the Frontline piece. Pretty good. The HBO drama “Too Big To Fail” is pretty good as well. All of these ignore the root cause of the government though.

[Wyatt's Torch]

Interesting comment from Business Insider this morning:

The Bullish Economic Story May Be On The Verge Of A Change

The yield on the 10-year Treasury note broke through to a new multi-year high of 3.03% on the final day of 2013, following the Federal Reserve's December 18 decision to begin tapering down its bond buying program known as quantitative easing and the attendant sell-off in the U.S. government bond market.

Friday's release of the December jobs report, however, sent yields tumbling 10 basis points in a single day, and they are now back below where they were when the tapering-induced sell-off began.

Last week, before the jobs report, we highlighted Citi's Economic Surprise Index, which stood at its highest level in nearly two years headed into the release. The surprise index measures how much better or worse economic data progress relative to the expectations of market economists, so a high number means the data are blowing expectations out of the water.

That has been the backdrop for the last few months. Economic data releases have been doing just that, especially given how low expectations for near-term economic improvement were following the government shutdown that spanned the first two weeks of October.

Usually, when the economic surprise index reaches a certain level, however, it tends to roll over. This is because economists are likely to — in light of new information — incorporate the better-than-expected data into their forecasts for the following month's data, which tends to shrink the gap between expectations and reality, causing the index to fall.

It works the same way for market participants, and strategists are beginning to warn that the downward thrust in yields could continue a little longer as a result, as Treasuries fall back into favor temporarily.

"It may now prove more difficult for data to meet the market’s heightened expectations, potentially leading to an extension of the post-payroll retracement move," says Gennadiy Goldberg, a U.S. strategist at TD Securities.

"Data surprise indicators have already curled lower, suggesting that upcoming data could be crucial in determining near-term direction in rates. In particular, we suspect that this week’s softer headline retail sales, housing starts, and industrial production data could further pressures surprise indices lower, putting additional downward pressure on rates.

Read more: http://www.businessinsider.com/economic-story-may-be-about-to-change-2014-1#ixzz2qNJ5lmE8