John Hussman: The Recent "Good" Jobs Reports Have Been Among The Worst Ever Recorded

The Business Insider ^ | 9-13-2010 | Joe Weisenthal

[blam]

John Hussman: The Recent "Good" Jobs Reports Have Been Among The Worst Ever Recorded

Joe Weisenthal
Sep. 13, 2010, 12:01 PM

First off, John Hussman is still bearish.

Okay, now that we've gotten that out of the way, his latest weekly letter takes a look at some of the supposedly "good" jobs data we've gotten lately -- both on the monthly jobs number, and with the weekly initial claims reports.

In his note, he introduces readers to the notion of an impulse response -- basically the tendency of economic data to echo down the road:

To provide some perspective on this, below is a simple estimate of what economists call an "impulse response" profile for the U.S. labor market. When we deal with economic variables - such as employment - that are subject to positive or negative "shocks," it is often helpful to estimate how those shocks tend to "propagate" over time.
For employment, a 1% shock in job creation or destruction (versus trend growth) tends to be followed over the following year by an additional 1% movement in jobs in the same direction. After that, the impulse gradually attenuates over a larger period of years, as the initial positive or negative burst is followed by a trajectory back toward trend growth.
In effect, positive and negative "shocks" to job creation have very strong tendency to "cluster," propagating in the same direction for a period of about 12 months, and then gradually attenuating toward the long-term trend.

Here's what the echoes look like for a job shortfall:

So as you can see, the impact of a 1% jobs shortfall initially would be expected to lead to more job shortfalls, but then the impact fades.

Now, what does that have to do with the

[snip]

[blam]

What ever you want to hear or believe:

Get This: We're Actually Gaining Jobs At A Faster Rate Than The Last Two Recessions!!