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Jobs Market Recovery Now Underway?
Submitted by Leo Kolivakis, publisher of Pension Pulse.
Tavia Grant of the Globe and Mail asks When will employers start hiring?:
It's a key question for the economy this year as the recovery enfolds: When will employers start hiring again?
Though job losses have eased, so far there are few sign employers are confident enough to wade into the hiring pool again.
Insights into the jobs market will come Friday, when Statistics Canada
releases its labour force survey for January. Economists polled by
Bloomberg News expect employers added a modest 15,000 positions last
month. It's a far cry from the same month last year, when employment in
Canada plunged by 130,000 – the most on record.
The jobless rate is seen at 8.5 per cent from a revised 8.4 per cent in December.
“The
recovery in the labour market itself has not been smooth, as it has
seesawed between job growth and job losses on a fairly regular basis,”
said Millan Mulraine, economics strategist at Toronto-Dominion Bank,
who expects the labour market will stabilize in the coming months.
Canada's
labour market slumped at the end of last year, with revised data
showing the country lost 28,300 jobs in the month, rather than the
2,600 Statscan originally reported. The jobless rate currently stands
at 8.4 per cent, a notch lower than the 8.5 per cent the agency first
reported.
Statscan adjusts its labour
numbers every January to account for seasonal hiccups in the data. This
year's revisions were more extensive, going back several decades,
because the agency adopted a new model to make its seasonal adjustments.
Despite the revisions, the overall picture remains the same, said Geoff Bowlby, Statscan's director of labour statistics.
“The
big picture hasn't changed – the big story of employment falling
dramatically from its peak of October of 2008 to some time just before
the summer, and then being more stable after that. That trend hasn't
changed,” he said in an interview.
Statscan's labour force
survey is based on responses from 57,000 households, making it one of
the most extensive in the world, he said. It's about the same sample
size as that of the United States, though Canada's population is about
a tenth of its neighbour's.
Canada's jobs survey is well
regarded in terms of both accuracy and comprehensiveness, said Doug
Hyatt, economics professor at Rotman School of Managment.He outlines several reasons why the jobless rate is likely to remain stubbornly high this year.
“One of the challenges as you're coming out of a recession is that the unemployment rate
stays high, or gets higher even if we're creating jobs, because all of
those people who gave up looking for work start to come back again,” he
said. As well, “typically, employers say, ‘I could hire right now --
but I'm just not confident enough about my order book. So I'm going to
work my existing staff overtime.'”
The recession has killed about 323,000 jobs so far.
Recent
surveys on hiring suggest companies are still cautious. Nearly
three-quarters, or 71 per cent, of smaller businesses don't see a
change in their full-time employment levels in the coming months.
Fourteen per cent plan to increase their head count while 15 per cent
intend to decrease staffing, according to the Canadian Federation of
Independent Business survey released this week.
A separate
Towers Watson survey conducted last month showed four in 10 employers
are still planning job cuts, while 87 per cent plan to hire – meaning
some plan to both hire and fire this year.
Statscan will release
its survey at 7 a.m. (ET) on Friday. The U.S. Bureau of Labour
Statistics also releases its non-farm payrolls numbers Friday, at 8:30
a.m. (ET). Economists expect 15,000 positions were added last month,
with the jobless rate staying near a three-decade high of 10 per cent.
The agency will also make its annual revision to its payroll data.
There
is no doubt that employers are hesitant to hire, especially coming out
of a severe financial recession. But let there be no doubt that North
American (and even UK) labor markets will experience significant job growth in Q1 & Q2 2010.
While
everyone was scared to death following the stock market selloff on
Thursday (hope you were buying that dip), hardly anyone paid attention
to Cisco reporting dramatic sales growth and plans to hire in coming year.
And
it isn't just Cisco that plans to hire more workers. Business
investment is picking up and hiring is happening across all sectors so
don't be surprised to see some upside surprises on Friday morning.
Stéfane Marion, Chief Economist and Strategist at the National Bank of
Canada asks, U.S.: Upside surprise for payroll numbers?:
As
we look ahead to this Friday’s all-important payroll jobs report, the
latest data are encouraging. The employment component of the
just-released ISM report on manufacturing rose to its highest level in
four years in January. Also, we note that the Conference Board’s
Help-Wanted Online data series surged by 382,000 in January.
This
was the largest increase since the inception of the measure in 2005 and
brings the cumulative increase in online vacancies to 750,000 in the
last three months.
As today’s Hot Chart shows (click
on image above), online vacancies rose above the 4 million mark for the
first time since November 2008. In light of these developments, we
remain comfortable with our estimate of 100,000 net new payroll jobs in
January.
Consensus is expecting US payrolls
to rise by 15,000 in January. I wouldn't be surprised if the actual
print comes in at ten times that amount. Of course, this isn't a V-shaped recovery, but it is encouraging nonetheless, and I expect a strong reaction from the bond, stock, commodity and currency markets.
So
while everyone was worried about Thursday's market selloff, I expect
Friday will be a different day. The bears were growling on Thursday but
the bulls will come charging back on Friday. Going forward, markets
will become a lot more interesting - and a lot more dangerous.
»
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Leo must have made a big buy on the Dip...
Please World, don't come to the conclusion that all Canadians are as stupid as Leo Kolivakis.
Oh baby, looks like the Nasdaq and Dow will finish in the green and solars are flying. Did you just stain your maple leaf underwear? LMAO!
Courtesy of JPM, Squid etc.
Yipee! light that pipe back up
The prosecution rests, your Honour.
No.
The 2 features of ZH that I favor most are:
So Leo, keep on doing what you do. It's what you believe and it's good to see your perspective. Personally, I do not agree with all of it, but I'd rather be challenged by you, than not. So, when you're right, you'll make money, and when I'm right, I'll make money.
Everyone, let's remember from where the real threat comes. It ain't Leo.
Thanks crosey, will do, and will try harder to avoid engaging the pricks around here.
Its Mr. Prick to you son
Household job survey:
"Hey John do you have a job?"
"Kind of, I mow my neighbors' yards"
"How many yards?"
"7"
"Thank you."
Add 7 jobs for this household, please.
From my friends at the National Bank of Canada:
The household survey from which the unemployment rate is derived showed the addition of 784,000 jobs in January (after adjusting for revisions to population). The employment figures derived from this survey, however, are much more volatile than those obtained from the payroll survey. As such, it is preferable to use a 3-month moving average to extract the underlying trend. As shown, household jobs still show a gain of 110,000 after smoothing. In the past, the household survey has led the payroll survey coming out of recessions.
theres shit on your rose colored glasses
Dear Leo,
As one of the unemployed who just got home from "another" interview. It is NOT getting better unless you think a 20% decrease in base salary is better. Keep your job it is pretty crowded out here and we are running out of blankets.
I was unemployed for the longest time and dealt with discrimination based on my disability. Keep your chin up, keep chucking away, stay healthy (mentally & physically) and don't ever let it affect your self-esteem. Work is a four letter word. The important things in life are family, friends and health. The rest is bullshit.
I was going to propose to TD and the gang that Leo be banished from the website for stupidity of the highest order, ranking equal to the bureaucrats who create the jobs fantasy each month.
But then I decided that I enjoy ridiculing Leo too much. He brightens my day much like a court jester must have done for kings and queens in Elizabethan England. Or using a modern day analogy, much like the really bad singers that auditon for American Idol.
Let's face it, without these fools, life would be a little flatter...
Please do propose it to TD. Would love to see the results of that poll.
"Please do propose it to TD. I couldn't care less if ZH bans me. You guys all sniff the same glue. Ridicule me? Hah! I will shove your tiny little testicles down your throat, ya douche!"
Yowsers, someone's losing their shit. And shirt.
Yo cowdung, I edited that comment, but you're the exact little pussy I was referring to. Grow the fuck up. Anyone can take swipes at me but that jobs report wasn't bad at all. The US labor market is turning the corner. PERIOD. And as far as solars, if you're smart, you'd be accumulating them. But since you have shit for brains, you're going to go buy gold or something else just as worthless.
Wow, talk about bitterness. Sounds like someone was on the phone with the margin clerk this morning.
I don't live beyond my means, and never bought on margin. I am not bitter in the least. This liquidity rally will take off again and you will all be holding your small balls wondering WTF is happening.
Just make sure you don't confuse alpha with beta, particularly when it comes to the solar stocks.
Then you just have bad manners. If you had taken big losses this week then your foul mood and lack of intelectual direction would be understandable.
By "liquidity rally" I assume you mean this: http://mises.org/story/2532
God, I love you Leo. The bearish mob was brought to their knees in this rally. The correction had to come. Maybe today is the greatest buying op of 2010. Maybe it will happen it March, like last year, just like every bear here is hoping. Wait a minute, they didn't buy in March 2009 either.
Just WHAT is everyone on ZH waiting for before going long? Noone has to trade to insolvency if they don't want to.
Great point about the really bad American Idol singers.
That is the only portion of American Idol I watch, just to confirm how
delusional people can be.
I worry about Leo though, the combination of loosing your ass through
averaging down and taking a beating from this brutal bunch is
probably more than one human should be forced to endure...
Its not doom and gloom, its reality. Take that walk Leo...
Don't you worry about me bud, I got more fortitude than all of you put together.
As far as you know
I am really, truly glad to hear that Leo.
Really.
Because I think the wheels have finally started to come off this perpetual motion financial machine we all have been riding or hiding from.
Enjoy the weekend Leo
From the Council on Foreign Relations:
The unemployment figure of 9.7% released this morning shows that the labor market continues to lag behind the rest of the economy. A new chart book on the economic cycle from CFR's Center for Geoeconomic Studies (www.cfr.org/cgs/) demonstrates that the increase in unemployment since the start of this recession is worse than any unemployment spike in the post-war period. It also shows that:
- A recovery is under way, but because of the depth of the recession many metrics remain worse than in other post-war cycles.
- The "Cash for Clunkers" program helped clear auto dealers' inventory. However, in a sign of what could happen as other forms of stimulus run out, sales fell quickly when the program expired.
- The fast policy response and sharp economic downturn led to an expansion in the federal budget deficit far sharper than anything experienced previously, either pre-war or post-war. The deficit has stabilized, but at a very high level.
- The collapse in real estate values has been even more severe than in the Great Depression, and shows only modest signs of recovery.
The full chart book can be downloaded here: www.cfr.org/content/publications/attachments/2009OutlookFinal_Long.pdf
Meanwhile, to combat rising unemployment, President Obama has set a target of doubling exports over five years. CFR's Geo-Graphics (blogs.cfr.org/geographics/) blog argues that this goal is over-ambitious: blogs.cfr.org/geographics/2010/02/03/exports/
Just a warning. Take it anyway you like but if you are going to, don't smoke that pipe in an unventilated room especially if there is electric heat.
Oh and by the way, the CFR are a bunch of trust funders, Trilateralists and Bilderbergers.
Are those solars a long term bet or are you in and out?
Spinning numbers to fit the agenda isn't recovery.
Kinda like Kim Jong Il's decree to produce more soap. http://www.globalpost.com/dispatch/worldview/091204/north-korea-economy
Thanks for your thoughts Leo. I don't agree but
we did see YAHOO sell HOTJOBS off - admitting it
has been a loser for them. Many of us would
visit those sites each evening a few years ago.
My first thought when I heard this was - OK that
may finally mark the bottom on this.
Let's not forget that the payroll number is going to be skewed for next few reports. The census bearue is adding some 750,000 plus jobs. Now that's what I call a solid recovery. Again, it will only have a temporary impact. You need to change the flavor of Kool-Aid your drinking Leo. The State budgets are imploding before our eyes (sales tax revenues), the American consumer is still in a coma and up to their eye balls in debt. Just look at Corporate revenues being reported when you strip out the financials. What came first the chicken or the egg? Neither; The consumer did. What's holding the consumer back? Debt. Drink up.
First of all, Leo deserves respect, and to be listened to, and only then made fun of and poked at with sticks.
Leo: Listen - There is no massive recovery in jobs in the wings, dude, unless you regard the pronouncements of the BLS, as adjusted, as accurately reflecting reality. BLS may vomit up a foul-smelling pack of lies that confirm your prediction at some point this year, and maybe if enough people believe the lies, it will be a valid trade. The government will add something like 1 MM jobs that will pay the equivalent of a car wash attendant's wages for the Census, but if that is a green shoot, it is a weed. You are basing your predictions on manufactured statistics that purport to show green shoots. Dude, whatever signs you see are just the corpse twitching in response to electrical stimuli. I'm serious. Put down the ganja and get real. My neighbors called me to thank me for telling them to move out of equities in their 401k 2 weeks ago, when I told them "sub 10,000" was coming soon as reality begins to take hold, and "hope" and "propaganda" fade. I'm no genius, but this is all as plain as day. 2010 will not be a recovery year. Period. Best hope is to hunker down, hold on, and tread water - that's it.
On the other hand, I have no knowledge how Chinese solar might play out, and view that as good a casino bet as anything, with one precaution: I do not trust the USA "official" statistics, and view China as much worse - a totalitarian state where no pronouncement can be trusted, and every investment is subject to 100% loss at any time and for any reason. Confidence in Chinese managed economy = zero.
A "next leg down" in very much in the cards for new homes.
+100.
For a long time I wondered, and openly questioned, why ZH includes Leo's posts. I've concluded that they include someone whom they disagree with because it promotes discussion and helps avoid group think. And while I disagree entirely with Leo's Keynesian conclusions, I would venture to say that those are Leo's most valuable posts, because ZH is a great forum for people like you to post insightful responses for many eyes to see.
+1 to you. I like reading Leo's posts because they give me some insight into the stuff my IRA guy tells me. I'm not an expert in things market, but I like different perspectives. My work puts me in a position to hear some "inside scoop" stuff which does me little good, but combined with the wisdom of others helps me prepare for likelihoods. I don't often agree with Leo's expectations, but I like to read how he comes to the conclusions he does. And I think it's important to remember that he's working in an area where one thinks in 20+ year increments, not short-term frequent trading.
Plus it's fun to read the witty comments from people Leo pisses off.
Y’all should stop picking on my little buddy, Leo. You’re just upset because Leo isn’t peddling doom-and-gloom. There’ll be plenty of time for gloom-and-doom, when there’s… er…when it’s gloomy and stuff. It doesn’t matter anyway! The market is gonna do whatever the market is gonna do, regardless of any bogus government numbers or phony-baloney corporate earnings or any of that other hoopla. One of these days, Leo is gonna be right, and you’re gonna say, “Hey, Leo was right.” He has his balls out (or something) and you don’t. Obamanomics is lucky to have a loyal, enthusiastic supporter like Leo, even if his loyalty and enthusiasm are... um…a little bit off-base. Hang tough, Leo. Right on, buddy!
(You’ve got to humor them.)
Yes, but when that day comes that Leo is right, Leo
won't have any dry powder!
Averaging down is a bitch, learned that the hard way,
in the prior century,
before Lynch taught me proper.....
Leo go out for a walk. Talk to regular folks. The economy stinks for the average Joe. Four/five years ago when I wanted to hire a fulltime sitter for the kids all I could find were young women from eastern Europe who wanted a lot of cash. Half could barely speak English. Now college educated, American, women in their mid 20's are desperate for the same gig. Take a look a Craig’s list. People are in real trouble. Will there be a recovery? Sure, but no time soon.
Out of curiosity, do you ever sell? How much of your stake, by percentage, is in cash or equivalents?
Me, I am about 50/50 having dumped most of my financials stock/etfs in the past few months.
Seriously TD, can we get this crap off the site?
I second that.
How does unemployemnt drop .3% when you need a 120K job gain in a month just to keep up with population growth ?
Are they paying these household survey callers extra money to record a "I have quit looking for work response" ?
don't agree the trend on the jobs is positive, its very hard to dispute that. however the slope of the jobs recovery seems quite flap, judging from nfp. it will take more time for the economy to really be creating jobs. on the other hand what matters is unemployment and if that came down, it can't be bad.
re- europe, don't get too worked up folks, there is much less than meets the eye. as soon as the eu decides to take action, the shorts will get CRUSHED. now the question is when....
Leo, Thanks for being the lone, sane voice in a sea of paranoid, goldbug loonies. I appreciate your objective outlook and, thanks to you, have made a killing the past few months following your sage advice. Next week (2/8 - 2/12) bears are going to get totally destroyed as I predict the equity markets will be up some 4% from here. Watch and be amazed :))))
Love and kisses,
Mom
Pass me that blunt, homey!
Payrolls dropped 20k,and were revised downward drastically for the prior few months. In other words, the total number of jobs declined. Bad, very bad. But because the Govt bureaucrats claim fewer people are looking for work (with little or no basis), the unemployment RATE allegedly declined. In what alternate Universe is this a good report?
Leo...are you connecting the expected increase in Census Workers (a temporary job) to be the causal factor in a broad economic recovery?
I am sorry...I just cannot come up with a plausable way to support your opinion. I understand its an opinion you hold. I just have never, despite all your posts stating your conclusions on the subject, understood how you think the conclusion is actually going to actually come true