Unemployment stands at 8.9%

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cat233's picture
cat233
Status: Platinum Member (Offline)
Joined: Aug 20 2008
Posts: 575
Unemployment stands at 8.9%

 

April Average Hourly Earnings y/y +3.2% vs +3.3% consensus
 
April Unemployment Rate 8.9% vs 8.9% consensus
 
April Nonfarm Payrolls -539K vs -600K consensus; prior revised to -699K from -663K
 
April Average Hourly Earnings m/m +0.1% vs +0.2% consensus
 
Employment Report Not Good
The April decline in payrolls of 539,000 was a smaller decline than the published economist median expectation of 600,000, but still represents bad economic news. Part of the smaller decline is explained by a 72,000 jump in government payrolls, which hardly helps the wealth-producing private sector. There, widespread losses occurred, including a drop of 149,000 in manufacturing and 110,000 in construction... It is hard to derive a positive spin from the recent market argument that at least the rate of decline in economic data is slowing. The increase of 0.4% to 8.9% in the unemployment rate was in-line with expectations, but also noteworthy. The 2009 Obama administration budget (ended Sept. 30, 2009) called for a $1.7 trillion deficit. The economic assumptions assumed an 8.1% average unemployment rate for 2009. That looks like a very long stretch at this time, as the rate is likely to move higher the next few months. That implies that the deficit this fiscal year will be higher than forecast. Hourly earnings growth did not add much to consumer buying power. Hourly earnings were up $0.01 to $18.51 an hour, which is reported as a 0.1% increase... There have been hopes recently of a steadying in consumer spending leading to a stabilization in economic trends this fall or later this year, but the data does not provide much support for that argument. These are still massive job losses and wage gains are minimal. Granted, payroll trends do lag overall economic trends, but unless businesses start to show a willingness to hire and not just to lay off fewer people, the market may be ahead of itself in looking at the recent economic data as harbingers of much better trends.
 
Source:  Briefing.com

 

cat233's picture
cat233
Status: Platinum Member (Offline)
Joined: Aug 20 2008
Posts: 575
Re: Unemployment stands at 8.9%

Source:  Briefing.com

 

Highlights

  • The April decline in payrolls of 539,000 was a smaller decline than the published economist median expectation of 600,000, but still represents bad economic news. Part of the smaller decline is explained by a 72,000 jump in government payrolls, which hardly helps the wealth-producing private sector.
  • Widespread losses occurred in the private sector, including a drop of 149,000 in manufacturing and 110,000 in construction.
  • The 0.4 increase in the unemployment rate to 8.9% was in-line with expectations.
  • Hourly earnings growth did not add much to consumer buying power. Hourly earnings were up $0.01 to $18.51 an hour, which is reported as a 0.1% increase.

Key Factors

  • It is hard to derive a positive spin from the recent market argument that at least the rate of decline in economic data is slowing.
  • The increase in the unemployment rate is noteworthy for other reasons.  The 2009 Obama administration budget (ended Sept. 30, 2009) called for a $1.7 trillion deficit. The economic assumptions assumed an 8.1% average unemployment rate for 2009.  That looks like a very long stretch at this time, as the rate is likely to move higher the next few months.  That implies that the deficit this fiscal year will be higher than forecast.
  • There have been hopes recently of a steadying in consumer spending leading to a stabilization in economic trends this fall or later this year, but the hourly earnings data does not provide much support for that argument.
  • These are still massive job losses and wage gains are minimal.  Granted, payroll trends do lag overall economic trends, but unless businesses start to show a willingness to hire and not just to lay off fewer people, the market may be ahead of itself in looking at the recent economic data as harbingers of much better trends.

Big Picture

  • Employment conditions have worsened significantly in recent months.  Through August 2008, payroll declines were moderate, and not at recessionary levels.  The September and October declines were much larger and established a new trend.  Employment conditions are not likely to improve for quite a few months, particularly as employment picks up only after an increase in overall demand.
Category APR MAR FEB JAN DEC
Establishment Survey          
Nonfarm Payrolls -539K -699: -681K -741K -681K
  Goods-Producing -270K -318K -295K -405K -282K
    Construction -110K -135K -113K -135K -98K
    Manufacturing -149K -167K -172K -262K -180K
  Service-Providing -269K -381K -386K -336K -399K
    Retail Trade -47K -64K -57K -46K -88K
    Financial -40K -43K -56K -56K -33K
    Business -122K -130K -176K -151K -132K
       Temporary help -63K -72K -73K -90K -73K
    Education/Health 15K 10K 19K 39K 36K
    Leisure/Hospitality -44K -42K -32K -36K -40K
    Government 72K -6K 7K 8K -11K
Average Workweek 33.2 33.2 33.3 33.3 33.3
  Factory Workweek 39.6 39.4 39.5 39.8 39.9
Factory Overtime 2.7 2.7 2.7 2.9 2.9
Aggregate Hours Index -0.6% -1.0% -0.6% -0.7% -0.9%
Avg Hourly Earnings 0.1% 0.2% 0.2% 0.2% 0.3%
Household Survey          
Civilian Unemp. Rate 8.9% 8.5% 8.1% 7.6% 7.2%
Civilian Labor Force 683K -166K 498K -731K -173K
Civilian Employed 120K -861K -351K -1239K -806K
Civilian Unemployed 563K 694K 851K 508K 632K

 

mpelchat's picture
mpelchat
Status: Silver Member (Offline)
Joined: Sep 10 2008
Posts: 214
Re: Unemployment stands at 8.9%

And the "stress tests" were run at 7.9% unemployment.  WOW only 1% off, guess that is what you mean by "close enough for government work".

Nichoman's picture
Nichoman
Status: Gold Member (Offline)
Joined: Nov 1 2008
Posts: 422
Re: Unemployment stands at 8.9%

The government also revised February down by 30,000.  Add March revision down of -36K....example of Government massaging of Data...again not picked up and/or emphasized by conventional media.   That's a -605K job loss...versus advertised 539K.

Now...add data from Fannie Mae...

http://market-ticker.denninger.net/archives/1027-Green-Shoots-Not-According-to-Fannie.html

Are we getting better?  Recession ending?

 

Nichoman

 

Ragnar_Danneskjold's picture
Ragnar_Danneskjold
Status: Silver Member (Offline)
Joined: Feb 23 2009
Posts: 100
Re: Unemployment stands at 8.9%
cat233 wrote:

Part of the smaller decline is explained by a 72,000 jump in government payrolls, which hardly helps the wealth-producing private sector.

So, basically, we would've seen another 600K loss if gov't wasn't hiring for the census, which are low paying, make work jobs for the most part.

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1443
Re: Unemployment stands at 8.9%

Just wait until the 2010 census kicks in.....they plan on hiring over 1M people to do the counting.  It was stated that is double what was hired in the previous census.  Short term job placement to increase the spin.

mikek31's picture
mikek31
Status: Member (Offline)
Joined: May 3 2009
Posts: 15
Re: Unemployment stands at 8.9%

We're giving the old USSR a run for its money with the amount of propaganda being spewed about.  Next up: currency exchange controls, trade protectionism, and black markets.

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