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Goldman On The Catastrophic NFP Number: "Basically No Positive Offsets To The Poor Headline Results"

Tyler Durden's picture


Ladies and gents: presenting Jan Hatzius.

Across The Board Weakness

BOTTOM LINE: A very disappointing Employment Report. Suggests some downside risk to our second half growth forecasts.


1. Nonfarm payroll employment increased by 18k in June, significantly less than expected. Employment growth for the previous two months was also revised down by a net 44k. Weakness was broad-based across industries: manufacturing employment rose by just 6k, after declining 2k in May; total private service-providing employment increased by 53k, down from +70k in May; the temporary help component fell by 12k after falling by 2k in May; and government employment declines by 39k after a 48k drop in May. Other details from the Establishment Survey also disappointed: average hourly earnings were unchanged month-over-month; the average workweek declined; and the diffusion index representing the percent of industries reporting job gains fell to 53.4% from 54.1%.

2. The unemployment rate rose unexpectedly by one tenth to 9.2% in June, despite a one tenth decline in the participation rate to 64.1%. Household employment declined sharply by 445k, pushing down the employment-population ratio by two tenths to 58.2%. The U-6 measure-which captures other types of labor underutilization-increased by four tenths to 16.2%.

3. The preliminary June reading for our Current Activity Indicator (CAI) was 1.2%, down from 1.7% in May (Technical note: we made a small methodological change to the CAI, separating the aggregate hours index into its two components--private payrolls and average weekly hours).

4. Overall the June Employment Report was quite disappointing, with basically no positive offsets to the poor headline results. The best we can say is that other data have shown better signs in recent weeks, including jobless claims, chain-store sales, gasoline prices, and auto production. Nevertheless, the weak trend in payroll employment indicates some downside risk to our second half growth views.

We will bring you details of the Joe LaVorgna pink slip as soon as it hits the tape.


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Fri, 07/08/2011 - 09:47 | 1436132 johngaltfla
johngaltfla's picture

 Suggests some downside risk to our second half growth forecasts.


Gee, duh, ya think.

I still say we enter a recession towards the end of September through Q1 2012 when the Fed kicks into MONETIZE YOUR MOMMA V1.0.

They'll print money everywhere. Hell, they'll offer tatoos you can use on your butt with this next monetization.

Fri, 07/08/2011 - 09:53 | 1436170 Dreadker
Dreadker's picture

Hell, they'll offer tatoos you can use on your butt with this next monetization


Dammit!  I don't like needles so i guess i'll be broke lol

Fri, 07/08/2011 - 10:00 | 1436222 anony
anony's picture

Not in an attempt to assure the re-election of theBamster??

You're so cynical.

Fri, 07/08/2011 - 10:17 | 1436329 Freebird
Freebird's picture

A W on each cheek?

Fri, 07/08/2011 - 09:49 | 1436141 Misean
Misean's picture

Well...positively abyssmal.


Fri, 07/08/2011 - 09:49 | 1436144 Ivanovich
Ivanovich's picture

The Jobs data had no positive offsets, except other data previously in the week like jobless claims.

Is this yambag for real with comments like that?

Fri, 07/08/2011 - 09:50 | 1436147 SheepDog-One
SheepDog-One's picture

Gee really Goldman? Wow youre genius.

Fri, 07/08/2011 - 10:04 | 1436255 Oh regional Indian
Oh regional Indian's picture

SD1, when "they" report bad news like this, it's because it's time, ne?

So, the big question is, what happens next week? 

Stocks down? If they crash, margin calls will cause a huge metal dump.

If stocks keep up their H(igh) F(lying) T(rajectory), Metals are peobably safe.

But Oil? Demand destruction at it's finest, statistically speaking anyways. Will they use this as an excuse for another SPR release, so struggling americans can go get greeter jobs at minimum wage, getting there in their Silverado to boot?

Hmmmmmm..... innteresting. My sense says trigger weekend is the next one.

July 15th. Boomday.


Fri, 07/08/2011 - 10:16 | 1436322 SheepDog-One
SheepDog-One's picture

It is quite interesting to ponder what they do next, theyre truely damned if they do and damned if they dont....smells like spectacular false flag to me!

Fri, 07/08/2011 - 10:28 | 1436397 equity_momo
equity_momo's picture

Ori , whats special about Jul 15th?

Fri, 07/08/2011 - 12:05 | 1437018 Oh regional Indian
Oh regional Indian's picture

e_m, the day before July 16th, 66th anniversary of Trinity Explosion.

Too many nuclear markers going off everywhere for this one not to be special

I'm expecting a nuclear event (literal or figurative) right about then.

Someone pointed out to me that July 3rd week has always been a strange one. I looked it up:

India performs nuclear Test (!!!!!!!!!!!!!!!!)

Fascinating eh? And this is just July 16th!!!!!

See more here:

That. Then there is Dodd/Frank coming into effect. Whump! No one is sure, uncertainity si bad. Regulatory uncertainity is the worst, eh?

It is the first overt layer of th efence coming around the US (later to us all probably).

It's always a charged time, high summer. The Sun is in full alignment. August 4th-6th 9the other end of this bracket, note Hiroahima was 6th August, was the period for th ehelical rising of Sirius at the Great Pyramid site which signalled the annual flooding of the Nile.

When too many big events happen on a date, it's good to pay attention. Going Nuclear has been the defining undercurrent of our last 66 years, ne? Given Fukushima and Indian Point and Calhoun and Deepwater Horizon and shaky earth loaded with hardly "spent" nuclear fuel.

Los Alamos incident.

Like that.


Fri, 07/08/2011 - 09:51 | 1436151 TexDenim
TexDenim's picture

Don't tell me Goldman Satan didn't see this coming. Who was fueling this insane rally we've been having for the last few days. Looks more like the early 1930s than a real improvement in equities.

Fri, 07/08/2011 - 09:57 | 1436199 johngaltfla
johngaltfla's picture

You can see it on GS' chart. Look at the technical pattern and tell me that isn't going to be a sub century stock soon...

Fri, 07/08/2011 - 09:51 | 1436153 Cash_is_Trash
Cash_is_Trash's picture

I'm delightfully chipper right about now about being of the Austrian School.

Fri, 07/08/2011 - 10:16 | 1436326 White.Star.Line
White.Star.Line's picture

I'm downright worried being from the Austrian school....

Fri, 07/08/2011 - 09:51 | 1436155 j0nx
j0nx's picture

Enter a recession?? I wasn't aware that we ever left the original depression.

Fri, 07/08/2011 - 09:53 | 1436169 SheepDog-One
SheepDog-One's picture

Never did, just the worlds biggest ever wallpapering job over the 800 lb rabid gorilla depression.

Fri, 07/08/2011 - 09:52 | 1436156 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

GS arsewipes in retreat...but this is a manipulated market where doing God's work works 'green close' miracles...

Fri, 07/08/2011 - 09:52 | 1436159 SheepDog-One
SheepDog-One's picture

Summer of recovery is HERE! I got my flip flops my beach umbrella and my Mai Tai! Looks like I better bring a few gallons, this is going to be one tough summer!

Fri, 07/08/2011 - 09:57 | 1436204 Caviar Emptor
Caviar Emptor's picture

Been sayin' it bro: we'll be slumping along into this long, hot summer. Looks like it's happening on both sides of the ponds too

Fri, 07/08/2011 - 09:54 | 1436160 Cognitive Dissonance
Cognitive Dissonance's picture

Now we know why the market pump was going full blast the last two weeks. I am quit certain the NFP numbers were expected to be poor when they first started sampling and the word went out.

"Put your backs into those oars boys or there will be no liquid supper for the lot of you."

Row, row, row your boat gently up the sewer..........

Fri, 07/08/2011 - 09:53 | 1436162 Peter K
Peter K's picture

It's official. Socialism es Muerte;)

And that's from people doing God's work.

Fri, 07/08/2011 - 09:59 | 1436195 wandstrasse
wandstrasse's picture

muerte, putas! err.. putaz!

Fri, 07/08/2011 - 09:54 | 1436174 kito
kito's picture

weathermen and economists, great jobs to have. 

Fri, 07/08/2011 - 09:54 | 1436176 equity_momo
equity_momo's picture

Jan , you like Cherry blossom?

How you like that cherry blossom?

Fri, 07/08/2011 - 09:55 | 1436180 Dreadker
Dreadker's picture

I don't see how telling the truth about where this economy is heading is not positive... Watching all this is like the end to 'The Life Of Brian'....


Always look on the bright side of death...

Fri, 07/08/2011 - 09:55 | 1436185 Caviar Emptor
Caviar Emptor's picture

Private sector is not creating jobs, and government shed over 900K jobs in the last 13 months. 

But what I think is even more revealing under the radar is that hourly earnings edged down a penny. Biflation, brothers

Fri, 07/08/2011 - 10:08 | 1436275 NorthenSoul
NorthenSoul's picture

With governments shedding jobs like that, let's see how well this "much needed fiscal austerity" works for the economy as a whole.


What never cease to amaze me from the apostles of cutting the deficits now, now, now is how impervious to reality 101 they can be. I mean, if a lot of people don't have jobs and none are created (well, no net positive that merely absorb the population growth) where will the demand come from?

These fuckers can NEVER answer this simple question with facts; only with vacuous talking points. Yet, the austerity bullshit come back EVERY time we have a big big recession.

Fri, 07/08/2011 - 12:48 | 1437191 ElvisDog
ElvisDog's picture

Here's a little fact for you to explain: Since 2007 when the U.S. started running 10-12% deficits and record government stimulus the number of people with full time jobs in this country has fallen by something like 8 million. You act as though the stagnant/awful employment numbers were the result of austerity/deficit cutting when in fact they occurred during a massive Keynesism response. You truly are an apostle of Krugman - if stimulus fails and continue to fails to generate organic private sector economic growth just do more of it.

Fri, 07/08/2011 - 09:55 | 1436188 bankonzhongguo
bankonzhongguo's picture

Goldman Sachs says, "The raping will continue."


Fri, 07/08/2011 - 09:55 | 1436189 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

AAPL's CAN eat iPads!!

Fri, 07/08/2011 - 09:55 | 1436190 101 years and c...
101 years and counting's picture

after they wrote the NFP last weekend, they did some blow and then began work on writing their response to the NFP.  all in a day's work.



Fri, 07/08/2011 - 09:56 | 1436192 Ponzi Unit
Ponzi Unit's picture

Death with dignity.

Fri, 07/08/2011 - 09:56 | 1436198 10kby2k
10kby2k's picture

Market can't even erase ADP gains. Yawn.

Fri, 07/08/2011 - 09:58 | 1436202 No Mas
No Mas's picture

Don't look now, but the beast is creeping up...

Buy the dip gentlemen.

Fri, 07/08/2011 - 09:58 | 1436205 nobusiness
nobusiness's picture

I never understood why people go postal.  I'm starting to see the light.


When the world moves opposite what you would expect and assholes (who benefit from the lies) come out trying to explain the madness it really can make you nuts.

Fri, 07/08/2011 - 09:58 | 1436210 buzzsaw99
buzzsaw99's picture

it's a man baby

Fri, 07/08/2011 - 09:59 | 1436211 The Axe
The Axe's picture

Jan...nuts   Easter fell on a Sunday..that's why the number is off.....AAPL plus...rally back on....I am going out to drink and play golf....computers win again.

Fri, 07/08/2011 - 09:59 | 1436214 NorthenSoul
NorthenSoul's picture

Suggests some downside risk to our second half growth forecasts.

Like saying that after hitting an iceberg, the Titanic became increasingly moist.

Fri, 07/08/2011 - 12:00 | 1436997 sleepingbeauty
sleepingbeauty's picture


Fri, 07/08/2011 - 10:00 | 1436217 Caviar Emptor
Caviar Emptor's picture

It's time to preach small government....make that medium government and large oil companies...make that medium oil companies

Fri, 07/08/2011 - 10:00 | 1436220 Franken_Stein
Franken_Stein's picture


After I had watched this movie, I knew that this capitalist model will end up in a disaster and that New York is at the heart of it:


Fri, 07/08/2011 - 10:00 | 1436221 Atlantis Consigliore
Atlantis Consigliore's picture

one man one vote is that really REAL,

the name of the game is lets make a deal;


the people got their problems the have the have nots, but the ones with $ 1 B campaign funds and lobbyists make me listen and pay my

30 second, um um um ummmm.


bankamerica jpmorgan goldman and ge your so very dear, you pimp and Anal-yst the jerks on tv so loud so they can hear,

but when the mkt tank and the foreclosures do a wipeout,  the FED Reserve will pour the mush and print and do to Watusi bailout,

bailout bailout bailout do the Watusi bailout.

Foreclosures spin the bottle throw the dice, you make it clear, it aint responibility its spread the wealth you wanna hear,

but when the fraud and crimes blow up and regulators do the slowburns,

the regulators/advisors pimps will leave and join the Wash law firms,

let me hear yasay it, Crony capitalism, payoffs, lobbyists, fraud corruption, kick the can down the road,

What we have here is a lack of communication:


Message no taxes stupid, cut the spending stupid,   get ready to vote them all out, on

a GREECE love boat without a paddle,

all of them,  even the one that cries.

Obamacare, Dodd Frank, NLRB,

Fri, 07/08/2011 - 10:02 | 1436239 RobotTrader
RobotTrader's picture

Wow, AAPL now green.  LULU and FOSL barely down.

Oil getting blowtorched again, so consumers are absolutely giddy.

Momentum is too strong to stop right now.

Fri, 07/08/2011 - 10:05 | 1436257 RobotTrader
RobotTrader's picture

As usual, apartment and shopping center REITs like SPG and BRE are unfazed from the jobs report.

Fri, 07/08/2011 - 10:21 | 1436353 SheepDog-One
SheepDog-One's picture

All this junk will be 'fazed' one morning soon, then watch as Robo comes around claiming he shorted it all.

Fri, 07/08/2011 - 10:09 | 1436285 Lady Heather...UNCLE
Lady Heather...UNCLE's picture i said on a previous pst, AAPL proving you CAN eat iPads. Personally, I think AAPL is a beautiful head fake (and mind fuck)

Fri, 07/08/2011 - 10:11 | 1436296 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

The PPT are AAPL-centric

Fri, 07/08/2011 - 10:15 | 1436316 CrashisOptimistic
CrashisOptimistic's picture

After the dust settles, folks will look out at California's budget deal that imagined $6 billion new revenue from improving employment and ask them when they will fire more people to make up for that $6B that isn't going to show up.


Meredith Whitney is right.

Fri, 07/08/2011 - 10:15 | 1436321 SuperRay
SuperRay's picture

hide your gold, bitcheez, they'll be coming for it soon...

Fri, 07/08/2011 - 10:17 | 1436331 A Man without Q...
A Man without Qualities's picture

Corporate socialism - give the peasants just enough money to continue buying what your corporations sell. The beauty is, the corporations can move operations overseas, so they neither have to worry about creating jobs nor paying taxes to cover the debt.  Then, when the government can no longer increase borrowing, cut the entitlements you've promised them, and they have paid for, so you can keep on getting money to the precious corporations.  When you have a large enough pile of money overseas, demand a tax holiday, so you can bring it home, promise to create jobs (tee hee) and invest (tee hee), but

Accuse anyone who challenges this of being a socialist or whatever, but never forget the objective - control of all assets, no taxes, compliant government and no pesky middle class.

Fri, 07/08/2011 - 10:18 | 1436338 fbrothers
fbrothers's picture

It is not like it is real. It is just government statistics. We can still raise the budget limit and fight three wars. Who cares about the deduction on the Jets?  We lease'em anyway. Let them eat cake.

Fri, 07/08/2011 - 10:20 | 1436342 White.Star.Line
White.Star.Line's picture

Since when is Goldman not ecstatic over high unemployment numbers?

After all, this will translate into higher corporate profits.

Fri, 07/08/2011 - 10:20 | 1436347 monopoly
monopoly's picture

No change in my plan. On track. Just be patient. Will take some time.

Fri, 07/08/2011 - 15:20 | 1437758 AldousHuxley
AldousHuxley's picture

When is goldman sachs going to lay off its bankers to boost the stock price which is at 2 year low. I'd also like to see the executives replaced with cheaper executives from China and India using H1B....or offshore the entire banking industry. It is all via the internet anyways

Fri, 07/08/2011 - 16:35 | 1438207 fxpert
fxpert's picture

I don't get it, why is GS bullish on commodities when they're heavily shorting Italian banks, hoping for a major sell off? Their recommendations are absolute shit. I'm not only shorting commodities (except gold), I'm shorting the squid fuckers as wel. 

Fri, 07/08/2011 - 20:56 | 1438824 Beancounter
Beancounter's picture

Liz ann Sonders at Schwab, the quintessential contraindicator who said no double dip,  has recently called for recovery, that was enough to send me running for my guns, SOS meals, and potable water.

Fri, 07/08/2011 - 21:15 | 1438859 Elliott Eldrich
Elliott Eldrich's picture

I've seen puddles of sick that looked better than today's NFP.

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