Friday, May 8, 2009

Understanding The True Employment Numbers

This post is for those of you that believe things will get worse and want some validation, for those of you that refuse to believe that the numbers are manipulated and should know better and for those of you that may need to realize that the jobs numbers are leveling off and this may be a signal that the bottom is in should get a life.

Many of you suspect the employment numbers are manufactured to reflect the current needs of the market makers. Others think the government officials need to control the "fear factor" regarding the economy and to validate that the bottoming process of this recession is actually occurring. Some of you just read and accept the numbers as real and move on (note: this group most likely does not include you dear reader) blindly accepting the government's official account and believing that all is well and getting better in the land of O.

Lets start with a more positive (if you can call it that) post from Mish where he covers the ADP reports with some great charts and data from ADP. Mish notes that, "This will be the 16th consecutive months of jobs lost with no end in sight."

Seeking Alpha has a whole section titled "Job Stats Not Worse, But Not Good" devoted to the job loss topic. Please read the articles by Durden and Iacono to get the best feel for what's really going on. Iacono states in his post Jobless Rate to 8.9%, Though Jobs Fall Less, "Over the last six months, a total of 3.9 million jobs have been lost and, since the recession began in December of 2007, the U.S. economy has shed 5.7 million jobs." Folks, that's 5,700,000 jobs lost and we're still shedding them at a pace that is not acceptable. The title of the article says enough doesn't it? It should have ended with a question mark IMO.

My favorite post on jobs comes from Tyler Durden at Zero Hedge. In The Real Memo Out Of The Bureau Of Lies And Statistics Tyler mentions, "I will bet one double Quarter Pounder with cheese and bacon that next month, the revisions of the April numbers will be on the order of an additional 85,000 unemployed. My guess is that, discounting the Census Bureau hirings, April saw 680,000 newly unemployed workers."

I'll finish with one for the optimists that point to the bottom of the job loss cycle as the bottom of the recession (depression IMO). From Seeking Alpha a nice little diddy Job Loss Peaks and Stock Market Lows chronicling the past periods of significant job loss and their correlation to market recovery.

My take on all this. We've lost more than 5 million jobs and we're still cranking them out at a > 500k pace with little sign of significant recovery. So WTH are you optimists thinking that are buying this theory that as jobs bottom so does the recession (again - depression)? I know, historical precedent as mentioned in a link above. I get your point, but this is a FINANCIAL DISASTER that is in its infancy IMO. We have not gotten to the inflationary period that totally devastates everyone. Heck, that is putting the cart ahead of the horse by about a year or two (yup I said a year or TWO). This post is about job loss only. I'm not covering the devastation of wealth thru imparted pension plans, investment accounts, 401(k)s or home ownership or the multitude of other issues (insolvent banks for one). When you add it all up wealth destruction compounded by historical job loss and further compounded by the impending inflationary environment, it's not a pretty picture. So you believers in the job loss signals the bottom group, you better be prepared for a hard dose of reality cause just like the market consider this slight bump up as a corrective move leading to further downside. Let's just hope this is a corrective wave in a three wave move down and not a five bagger.

UPDATE: Mish finally got his employment writeup out. It is the best on the web. Read it HERE.

Note: I obviously figured out the linkable post thing, but I am not sure how to make that link send you to a new page and keep this one up. Any hints there from a Blogger expert would be great.


  1. I read most of these too. Still, we go up and Benny boy says we start growing by the second half.

    Why doesn't someone slap him?

  2. the links : peeps can just right click the link and choose "new page"

    in your html you can possibly add link="new"

    thanks for your work!



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