David Rosenberg Explains Why The Jobs Report Was Even Worse Than It First Looked

The Business Insider ^ | 6-4-2010 | Joe Weisenthal

[blam]

David Rosenberg Explains Why The Jobs Report Was Even Worse Than It First Looked

Joe Weisenthal
Jun. 4, 2010, 1:02 PM

With no need for introduction, here's Gluskin-Sheff's David Rosenberg on why the jobs report was even worse than the headlines suggest:

This is probably the first time on record when a 431,000 surge in U.S. nonfarm payrolls was viewed as a terrible employment report. Perhaps this is because 411,000 of those jobs, or 95% of the tally, were in Census hirings, which everyone knows are temporary.

Private payrolls were the real key for the market and the consensus was completely giddy believing that we were going to see a +180,000 print today. Instead, we got a putrid 41,000 increase, which is hardly significant in any statistical sense — for once, the ADP survey looked optimistic. And of course, state and local governments are moving aggressively to get their fiscal position back into black ink and that means massive cost cutting. In May, this belt- tightening translated into a 22,000 retrenchment in employment in this part of the economy, which is 50% larger than the federal government.

Not only that, but a big red flag was clearly waved by the Household Survey, where total employment actually fell 35,000 — the first decline of the year and a splash of cold water on the widespread view that this recovery was gaining steam. Note too that the 41,000 increase in private payrolls marked a huge slowing from +218,000 in April and +158,000 in March, and the diffusion index sank like a stone, to 54.1% last month from 66.7%, so we have a situation where nearly half of the universe of employers were either cutting their payrolls or leaving them stagnant last month.

[snip]

[ClearCase_guy]

I don't think the media is quite there yet. They still think that there is a recovery. We're still "getting better", although these numbers may indicate that we're "losing steam".

At some point over the summer, I think the media will have an "Aha!" moment and decide that we're screwed.

[SouthTexas]

Perhaps this is because 411,000 of those jobs, or 95% of the tally, were in Census hirings, which everyone knows are temporary.

And maybe because WE are the ones paying for those jobs?

[wiggen]

Actual figure of 431 is composed of 411 census and 41 private(all 1,000’s). Now if the govt is 411 and private 41 which totals 452 but only 431 were created something must be off. Did the govt shed jobs away from the census? If the 411 is correct and the 41 and we have no reason to believe not then the govt shed 21,000 jobs away from the very temporary census jobs. Government hiring is all that stood between us and an unemployment rate well above 10.

[blam]

The Employment News Is Better Than It Looks

[Oldeconomybuyer]

 

[jacquej]

blam, do you know how long these “census” employees are going to be on our payroll?

[Neidermeyer]

1M census workers , 350M Americans ... How long does it take to count to 350?

[griswold3]

The minimum wage goes up in July and Harry Reid plans to reintroduce cap and trade that month too.

The unemployment numbers ARE good, compared to what they will be the next quarter.

No faith, trust or confidence in the government to implement growth policies. The death debt spiral continues.

[Beowulf9]

By the third year of Obama’s administration we will be back to the 1970s inflation and high interest rates. The fourth year will be all promises. I imagine the libs will swallow it whole.

[grey_whiskers]

Sounds like the "Hide the Decline" moment of the Economy...

Cheers!

[blam]

"blam, do you know how long these “census” employees are going to be on our payroll?"

Sorry, no.