Posted on 08/06/2004 5:30:25 AM PDT by RWR8189
Bad news.
Right.
Bush loses big.
Wrong.
We do appreciate the effort, though.
WHY WALL STREET IS GUESSING WRONG ON JOBS GROWTH
BY JOHN CRUDELE
August 5, 2004 -- WALL Street thinks the gov ernment will report strong U.S. job growth tomorrow. I think Wall Street is wrong. The consensus is that the Labor Department will saythat anywhere from 215,000 to 300,000 jobs were created in July when its report is released before Friday's opening bell.
Experts had predicted good growth in June but the actual number was a not-so-stellar gain of 112,000 jobs — less than half of what had been expected. The guessers apparently think some of the jobs that didn't show up in June will suddenly appear tomorrow.
With only two more monthly reports due before the election, tomorrow's number is obviously politically important.
But this report is just as vital for Wall Street because other reports are showing a slowdown in economic growth, an inconvenient development for a stock market that is already expensive. Here's my theory — and I emphasize the word "theory" — on where I think Wall Street will be wrong on the jobs figures.
Last year the government reported that the economy lost 44,000 jobs in July. Included in that figure was a guess by the Labor Department that so many companies quietly went out of business that they took 83,000 jobs with them. You could look it up: http://www.bls.gov/web/cesbd. htm. Without that guess, the economy would have gained — rather than lost — jobs last July. In other words, the Labor Department's so-called Net Birth/Death Adjustment tabulates July as one of only two months in which there are more companies dying and taking jobs away than creating new jobs.
The other month is January, when Labor takes out a massive number of jobs because it assumes a large number of companies die off after Christmas. I assume the White House doesn't understand these assumptions because the small jobs gain in January — helped by these assumptions — set off a massive amount of administration bellyaching.
But the White House was quite happy when these assumptions reversed in the spring and hundreds of thousands of guesstimated jobs were added to the monthly count. Unless the Labor Department deviates from its previous assumptions this July, the economy will have to have created an awful lot of jobs to get over the statistical hump and meet Wall Street's forecast. Or, the jobs will have to suddenly appear. *
Former NYSE chairman Dick Grasso now has two very big and dangerous bets on the table in his poker game against Eliot Spitzer and The New York Stock Exchange. Last week the former head of the NYSE sued John Reed, the new leader of the exchange, as well as the Big Board itself, for various reasons including defamation of character. Legal sources tell me the defamation claim is particularly dangerous for Grasso because it will bring his character and entire life into question during the trial. That would be OK except that the NYSE had two big scandals during Grasso's tenure — one into which he was almost dragged. So Grasso's side may eventually regret complaining about being called bad names.
In another recent development, the attorney general has asked that his lawsuit against Grasso be moved back into the same New York State court where it was originally filed. The case involves Grasso's compensation while at the NYSE. Experts believe Grasso wants the case in federal court since a previous ruling gave him absolute immunity from suits because Grasso asserted that his role as a regulator gave him special status. The irony is that immunity — if upheld — could be used to protect the millions Grasso was allowed to earn at the NYSE by claiming he was more than just a regulator.
One source that is very familiar with the immunity issue thinks the irony won't be lost on the federal court, which will bump the case back to the state. *
Thomson First Call tells me that second quarter earnings are running 4.4 percent above expectations. It says 297 of the companies in the Standard & Poor's 500 index have beaten analysts' expectations, 60 have missed and 72 are right on target. * Please send e-mail to: jcrudele@nypost.com
NEW YORK POST is a registered trademark of NYP Holdings, Inc. NYPOST.COM, NYPOSTONLINE.COM, and NEWYORKPOST.COM are trademarks of NYP Holdings, Inc. Copyright 2004 NYP Holdings, Inc. All rights reserved.
I agree with that. Overall its been a stellar year, but the job numbers have to be good. The next jobs report will come out I believe the day after he speaks at the convention in September and right before Labor Day weekend.
Yeah, the fact that here in MI we have a Democrat/Socialist Governor has nothing to do with the UE rate in the great lakes State lagging behind the rest of the nation. Of course, your comments are much like the "Proud Detroit Democrat's" comments.
It is laughable that the President is given more credit for the economy of a particular state than the Governor of that state is given. Heck, we might as well repeal all state soveriegnty and eliminate the self governence aspect of the constitution.
There is no correlation between unemployment benefits and the unemployment rate.
The unemployment rate is found through the Household Survey.
BINGO - An economy ..make that small businesses cannot sustain high energy prices for so long - We are seeing the result in the last 2 months economic reports -
Freepers on here have said I'm a pessimist over gas prices being an issue this Nov - And I've kept saying it is JUST over gas prices with regard to voters "driving" - it will have an effect on the economy as a whole!!
This is terrible news and all nightly News programs will focus on this "terrible" jobs report for the entire weekend -
In fact the word "double dip" recession will be brought back out of the basement now by the media - You watch.
How does this report make John Kerry the answer? Oh yeah, we are still at war, too. This election will be close, nomatter the #jobs created this summer.
One other thing that may not be considered in the UE rate is a spouse (such as a mom who has been staying home) who has been job hunting due to her husband's lowered pay or job loss. Or retirees needing to supplement their investment income.
Kerry will get a bigger bounce from this than from his speech. He should just stay home til november and watch the media campaign for him.
Kerry will get a bigger bounce from this than from his speech. He should just stay home til november and watch the media campaign for him.
Kerry will get a bigger bounce from this than from his speech. He should just stay home til november and watch the media campaign for him.
Public perception of the economy lags by 6 months. The Dims can scream all they want, but at election time what will actually matter is what happened several months earlier. George HW had an economy that had been surging for 4 months at election time, but it didn't help him, because of the lag. I don't think this will hurt that much, any more than the jobs created number next month being 500,000 would help him much.
Most people start new businesses out of desperation, not because conditions are that great. They create these new businesses because due to age and income they are priced out of the market for the jobs that are available. The typical employee doesnt get up one morning and decide the economy is so great Im goign to quit my job and make a fortune. Its after they have lost that job and realize that finding a new one is going to be a long, uncertain process that they will consider the create their own job scenario.
there is always the explanation about the ue rate not including those who've "given up" looking. How would they know that?
The thing voters remember is that in 4 years under Clinton, unemployment wend down 2.1% and in 4 years under Bush, unempolyment went up 1.3%.
You are crazy if you don't think high energy prices are effecting the economy - My business is seeing its bottom lined getting killed by fuel costs - This has a negative effect...Period.
The DOW is now under 10,000 - (it's August I know....we'll wait until Sept to worry) - Yep, we here are always "waiting" for more time .......Because then the "magic" will happen -
This jobs report is terrible news -period. No way to spin it. 5.5% unemployment is the only good news - but the media won't say buzz about that.
how can you have a double dip when it has been reevaluated that we did not have a recession to begin with (spin to cleanse Clinton's legacy)
Job hires are always slow in the summer. School is now going back in session for most. Vacations are over. Recent grads will either be going to college, the military, or the workforce. The numbers will start to improve. Even though 5.5% unemployment is better than average when compared to Clintons 8 years of 5.7% average. The media can spin any positive news into a negative story. Remember, only the accidents get reported, not that millions arrived safely to work this morning.
I know they include teen-agers in it starting at 16 years old. That's a clear distortion, imho.
Very few of those jobs are for supporting families.
If Mr. Andrea Mitchell raises interest rates this month, he ought to be tarred and feathered. This will finish off any chance of a recovery.
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