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Job growth and economic improvement are for REAL
Just a few thoughts and facts before the employment report for March is out. No time like just before the report to issue some thoughts so that the next day you can be shown to be horribly wrong, but here it goes.
I see on ZH a lot of antipathy for government data especially on jobs. Interestingly this week a number NON GOVERNMENT reports have been very up-beat
The ADP, a well-known private sector report based on a blown up sample from actual data from a payroll-services company continues to pour out evidence of over 200K jobs per month being created.
Private sector source…
The Challenger Gray and Christmas issue a report that looks at firms’ announced corporate layoffs from notices (medium-sized and larger) firms are required to post each month. The report for March shows us the 16th lowest announced corporate layoffs in March among the last 19 Marches. Since data are NOT seasonally adjusted (some of you will like this report even more because of that) this is an objective way to assess its strength/weakness. This lay off indicator is low.
Private sector source…
A Bloomberg Survey on consumer comfort has just shot up this week to show a one week increase in ‘consumer comfort’ with a jump so large that it occurs less than 6% of the time. In this weekly series going back to 1986 the 17-week change in the Bloomberg index has been surpassed only three other times (all of these were the product of the same 1998 episode). This is a twice in a 25-yeear experience.
Private sector source…
So put it together and SOMETHING is happening.
For those who belong to that shadowy group ‘weather-o-nomics’, yes weather has had an impact on data but it has had pluses and minuses- try talking to someone who runs a ski resort or a winter lodge business. I think the weather thing is overplayed for its impact.
On balance the big problem we do not seem to ever to be able to agree on is unemployment and this fine. We can all have our own favorite measure. Just be sure to plot it back in time and to compare today’s figures with the same definition and its higher numbers at all points in the past.
Everything is relative here.
I am encouraged that the ADP shows that private small services businesses have brought their employment levels back up to where they were Pre-Recession. Some small businesses are making great strides; some are not..
Of course the goods sector is challenged. Despite some good-looking recent MFG reports recently, the fact is that although the calendar year of 2011 was the first year in a decade in which MFG gained jobs the sector is lagging woefully behind in creating jobs in this recovery cycle.
The job market is a hodge-podge and it is not in good shape but it is improving. The improvement is quite good compared to what had been in train, previously. There is a long way to go. But let’s recognize progress without being satisfied by it.
And we’ll see if the ‘official report’ reflects that progress tomorrow. I expect it will. Also note that two government surveys one of firms’ payrolls and the other from the more inclusive household survey are showing job growth that is in step with the private sector ADP report.
Stay tuned for a 240K sort of gain in Private jobs for March.
Remember do not ever forecast a job number unless you are prepared to be wrong. There is nothing that breeds humility like making a forecast.
Well posting comments on ZH…and reading the blow-back is right up there.
Good luck any of you market junkies that bet on this number.
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The hoping you are having is being with much foolishness. Many peoples here are being offended by any words that other peoples are speaking no matter what the speaking words are they are using. Many peoples here are having no other reason for being here than to finding words to be offended by. But I am not being offended by your speaking because it is trying to be speaking that is not always having a bad feeling to it.
I am being sorry for posting the same words not only one time. I am having blame for the computer and not for what I am doing.
Those were good points GCT & I totally agree with the 'contrarians welcome' attitude. I would say the only thing missing from ZH are high quality contrarian (from a ZH-centric pov) views/postings - I would absolutely love to have serious food for thought that went against my ZH 'normalcy' bias view of the world. I don't say that as a woolly-liberal-loving-equality-freedom-of-speech-for-all type either - I really want to react to this financial & social context we find ourselves in in the 'correrct' or most useful-to-my-survival way as possible.
I entered the theatre & suspended my disbelief when reading RB's posting, but his subsequent responses showed (to my satisfaction at least) the thinness of his arguments & questionable sources - no disrespect to RB in that, as I'm sure he is an honest & sincere person & really believes what he says. So please come forward you mainstram economists, journalists & pundits et al - post here & run the Socratic dialectic guantlet with us - I'm really looking for a good reason not to hold gold & de-prep.
Look, I'm all for different points of view. I'll give you a view: how about looking under bridges in Fresno, CA? How about you look up "Slab City?" Damn rosy view!
Agreed on HuffPuff and Red State, and would add DKos and Free Republic. I read them from time to time to see what the pure party line idots are blabbering, but too much at any makes me feel like I need to spray my brain with disinfectant. The smart ones there are lucky to break triple digits on an IQ test and theyre all very much high school clique type echo chambers.
Not that I'm totally disagreeing with you GCT, but is there a point where we've lowered the bar so to speak, so far that the "quality" and ultimately value (in terms of thought provoking well researched analysis) becomes so low that we begin to lose the more critically thinking among us? Just some food for thought here.
TSA I understand the disagreement. Robert not replying to my questions brings me to further disagree with him. Critical thinking skills allows us to examine this blog to start with. The blogger's replies shows he is basically in academia and they tend to believe the party lines. A PHD does not make one an expert nor smarter then you. All it shows is he is better educated and I know alot of over educated idiots as you may well know as well.
There are articles here people agree with that are not well thought out to be honest. People tend to over look research when they agree with something. I do not like robert's responses as he sounds like a commenter here instead of a person that will actually defend his views. Attacking commenters disagreeing with his blog is a typical party line tactic. This does indeed lower the quality of the blog. But you and I know that already TSA. I still prefer to have some contrary views as it comfirms what most here already know. Why did you come to that conclusion? Because you can now critically think or because he is not doing the typical ZH article and we are mad becuase ZH allowed him to post here. So we are now upset and not critically thinking.
We need in your face blogs to keep us critically thinking. If this site just posted blogs everyone agreed with, we would be sheeple of a differrent nature. Thanks for posting by the way.
200,000 doesn't even keep pace with population growth and a "job" is NOT a "JOB". 'Cause flippin' burgers at Mickey D's or making subs at Blimpies for 20 hours a week at minimum wage is not going to pay the bills or do shit for the economy. Meantime we have fewer and fewer working age adults even being counted in the stats. Roll those numbers back and we're looking at 25% unemployment, or worse than the "great depression".
Don't bring that "rah-rah" crap 'round here, it won't wash.
Forgive me if I'm wrong, but it seems like this article is chock full of positive outlook analysis of cherry picked numbers. I have not seen, nor heard of any Fed legislation that relieves any of the significant costs and red tape that would promote small to medium businesses to hire. Cmon' Bob, you should know your audience. Most people here are awake and can still think critically.
Melon-head.
but a pondering melon head. see his hand? That is him thinking deep thoughts.
Hmmm, PMH. Perhaps a new malady for the times... =)
300K
A big factor in labor participation rate dropping, thus lowering the UE rate is DISABILITY CLAIMS(FRAUD?) since 2008, disability SS insurance for MENTAL ILLNESS has gone from 33% to 43% OF ALL CLAIMS! Chew on that Mr. Robert. And these people almost never get off disability once on. Think, JETBLUE PILOT, FOLKS. (my guess)
Brusca says it's "real." I'll tell you what's real: Brusca. He's a real tool............
Hey Bob, how much further in debt did your beloved goverment pile on top of my kids and how much garbage did the Fed buy to get us this "real" recovery??????
I have no idea why TD and ZH allowed this guy on as a contributor............disappointing.
...I have no idea why TD and ZH allowed this guy on as a contributor............disappointing........
......for tossing live bait into the tank?
Well please allow me to take this opportunity to sincerely thank TD and ZH and all the fine commentators for chumming the water with fresh Brusca
Good point............
"I love the smell of napalm in the morning. Smells like, victory."
With that piece of crap report we got (household down, avg workweek down, big miss on headline, NILF at new high), I'd say that the napalm hit as predicted and Brusca was at ground zero.....................VICTORY!!!!
http://www.youtube.com/watch?v=sBksHaTQCbU
There is nothing that breeds humility like making a forecast.
People forecast for the purpose of self aggrandizement owing to the small percentage of those times they can claim to be 'right' (which usually means "close"). Folks with a risk (or "reality") orientation recognize that deterministic views are virtually always wrong; so we don't bother forecasting but instead concern ourselves with constraining the possible outcomes to what is tolerable.
As Taleb says, "it's not the frequency with which you are right, but the cumulative effect of your losses that counts."
Robert -
Thanks for bringing this to our attention. But it seems to contradict other souces of information. For example, are you suggesting that labor force participation has now turned the corner? Because it fell off a cliff.
http://i.huffpost.com/gen/328235/LABOR-FORCE-PARTICIPATION.jpg
But it seems to contradict other souces of information.
Yes - like the fact that commute times in major metro areas are down 10%...nobody is working.
The "data" in plain sight is pretty compelling.
Or that most of these jobs aren't part time? Or that the Feds haven't subtracted several million workers from the workforce when, in fact, it has obviously grown?
Most of the jobs are min wage, and last 28(?) months in a row of INVENTORY BUILD has hit the wall. Profit margins have peaked due to ZIRP, layoffs, stock buybacks using junk bond issuance($425 BILLION in latest Quarter!)(ZIRP - monetary supression), there is NO GROWTH in GDP, maybe .5% is actually real, if that. Debt, money supply, stock prices, inventory is one sickass economy, Mr. Robert chase stocks at p/e21 (Crestmont) like the Sheeple, be my guest.
...the ratio of corporate profits to GDP is presently nearly 70% above its historical norm. Of course, the most common valuation methods used by Wall Street analysts (whether they use the "Fed model" or "forward operating earnings times arbitrary P/E multiple") rely almost exclusively on estimates of year ahead earnings. Embedded in these toy models is the quiet assumption that current profit margins will be sustained indefinitely.(Hussman)
Hmmmmm,
Time to cut to the chase.
So, what are you saying? More importantly, what is the net result?
I will take a kick at it.
Are you confirming that the overall devaluation of our "Western Society" is taking a greater hold? After all, the net result IS, lowing paying jobs are replacing those ONCE higher paying jobs.
Why just think about it, when an individual can think it through.
Ps. Thank-you Zero Hedge. You are the first site, to where I have decided to become a member. Cheers.
Interesting self-question and self-answer.
I have said nothing abut standard of living just about job creation. And about the new data on Consumer Comfort which is improving like gangbusters!
We get added metrics on wages with the reports on Friday.Unless you reject government numbers.. in that case Friday is nothing to you.
Brusca, listen up: you seem like a nice guy. Whatever: I don't begrudge you your thoughts and opinions.
But I do not think you understand what is happening in the financial and economic world right now, and I think your writing, filled with bland suppositions and milque-toast retorts, is unsuited for ZeroHedge. I think that you just don't get it. Your analysis is flat-out wrong, but worse, you don't seem to be grasping the fact that we are in a shaky canoe and the roar of hostile posts you hear from detractors on ZeroHedge is really the roar of a might waterfall - over which we as a society are about to plunge.
Collapse! Do you get it?
There is no recovery, there is no favorable BLS number, there is no favorable ADP number.
It's time for you to move on. Respectfully, I think you should post on another site, not this one.
"Consumer Comfort"
Just what we need! Another meaningless analysis of a highly modified Hedonic.
btw Does the CC measure Barca-lounger and Lazy Boy sales ?
"Unless you reject government numbers.. "
Ever heard of Shadowstats?
"Unless you reject Soma"
"Unless you reject Big Brother"
"Unless you reject government numbers.. in that case Friday is nothing to you."
Where the hell do you think you're posting, CNBC? Of course we reject government numbers here, it's almost obligatory because the truth reigns at ZH, dumbass!
consumer comfort because they realize big bad bama isn't going to - take the snap cards away, evict them from homes they haven't made a payment in 3+ years and lend them any amount of money to buy a new car and further subsidize them with any amount to go to a 'community college' where they can continue to shoot hoops and hope to somehow get a major league contract.
ouch. the truth hurts. oh - did i forget the free health care?
who was it said 'vote for me, i'll set you free?'
"Ball of confusion" Temptations. I think 1968.
So taking money from the productive and giving it to the unproductive works? Is that how you fix an economy?
Does money create wealth? Or do productive people create wealth? Are there productive people and unproductive people? Are companies and individuals that go bankrupt productive or unproductive? Did the money in the bailouts flow to bankrupt individuals or people who create profits and savings?
Does more debt fix the symptoms of too much debt?
Do you ever look outside the statist prism you live in?
Hey great Robert, maybe all the jobs are in North Dakota, Alaska or some other place I'd like to go to one if I can every afford a vacation again. I live in Sacramento, come on here buddy, trees are in bloom, plenty of wineries to go visit. 200 applications hitting every Craigslist job post. My industru in high end architectural coationsg products and services....collapsed! I have 7,000 plus YouTube looky loo views on my product video in one, TWO ORDERS! I normally sell 4-6 pallets a month and live pretty nice. Got back into contracting, bidding jobs for 1990 prices when fuel was $1.25 here, now it's $4.50! Breakfast at McDonalds yesterday was $6 for a number 3.
Go pound sand dude, or go talk to people in North-Fucking-Dakota where they moved from Bum Fuck USA to send their $18.75 an hour home they make!
After expanding their balance sheet to absurd levels, the Fed has managed to inflate the stock market and make the very rich bankers yet richer. The average retail mom and pop investor packed up long ago and has not participated in the rally ( just look at bond fund inflows and equity fund outflows, trading volume etc etc). As far as the other side of their ridiculous dual mandate, full employment, they have failed miserably. If after a trillion dollar ++ in stimulus all that we get are a couple of hundred thousand jobs per month, we are in serious trouble because this is not going to make a dent in long term unemployment. The fact remains that monetary policy cannot make a dent in this massive hole unless it is accompanied by fiscal discipline. How much more can the Fed grow their balance sheet? If last year they were responsible for buying 60% of new issue Treasuries, what is in store for this year 70, 80 100%?? sterilzed actions (twist, european LTRO etc) are a gimick and really do not solve anything. For proof of that just take a look at Euro spreads blowing out this week.
To Bob's post. Its not that most of us do not believe the ADP numbers. From a pure headline perspective, we are getting a pick up in jobs but at what cost? is it sustainable? Someone made a comment above about 10 $5.00 an hour jobs not being the same as one $50.00 an hour job. Well it certainly isn't. The 10 people on $5.00 an hour cannot afford to spend and contribute to the economy because at $5 an hour you are barely feeding yourself. The $50.00 and hour employee can afford to spend and contribute to the economy. That is why the headline numbers mean little without digging in to the data.
Until the politicians get their act together and contribute to the solution instead of contributing to the problems we will not get any meaningful resolution to the economic problems facing the country. This recession/depression is not one that the Fed can manage alone...There is not enough ink in the printing press to get us out of this hole! In the end, we have to face the fact that we are in trouble and deal with the consequences. Only then will we begin to rebuild.
Economic improvement as long as interest rates stay at 0% forever and you dont mind the US downgraded to AA....hey enjoy that sign spinning job.
This "recovery" is just another "over sold" rally within the secular downtrend for US economy.
Lower low, lower high.
Okay Robert...let's say you are right. What does it prove? To me, all it proves is that all those billions and billions of QE1, QE2, Twist, etc. are doing what they are designed to do. I think of a submarine at 800' deep...designed for only 500'...but it's holding together. A bit creaky, but all is A-OK....until it is smashed in a millisecond by the pressure. We're in the eye of the huricane...running out of options and the backside hasn't hit us yet. The sky is blue, birds are singing and all seems to be improving. One pesky problem though...it isn't REAL. It is fantasy...a stage set. Sorry....I'd like to believe the whole "recovery" thing. I'm simply not buying it.
maybe over the weekend, i will do the math. maybe somebody has, i haven't seen it yetm here, but somebody probably did it.
divide the printed money by the population (again pick a number. 320,000,000? let's not get picky) hand that to the people as cash. consumer spending up. but it's harder to get that into banker hands as it has to go to retail first. this has and will be all about banker bonus retention. the fed is owned and does the banker bidding.
Nice analogy, Sky. I'm initially attracted to ZH by their articles, but I linger for the beautifully written responses on the comment thread. Some better than others, but always thoroughly enlightening and entertaining. Thank you, fellow members, for the education.
So long as the U.S. is borrowing $3.5+ billion per day, "recovery" will remain illusory.
OK..
except for one thing this 'submarine' is surfacing. With each better report it is as though we are coming closer to the surface or up toward our point of theoretical implosion. If it (our 'sub')holds together we survive.
That's the difference.
"I disapprove of what you say, but I will defend to the death your right to say it."
Although I disagree with you on many points, I must give you credit for having the intestinal fortitude to stay on the threads and defend your position with those who give you a cogent rebuttal. Bounded rationality is pervasive in the financial community and it is essential to entertain arguments from both sides, and then draw ones own conclusions.
You forgot the gigantic submarine of Americans "not counted" anymore in the BLS-BS "reports" - or are you simply ignoring the mass-graveyard of millions. I believe so.
Aaaaugggha! Aaaaugggha! Dive! Dive!
"Just be sure to plot it back in time and to compare today’s figures with the same definition and its higher numbers at all points in the past."
this comment is astute and should be considered quite acutely by analysts....thus shadow statistics report of nearly 25% unemployment which undoubtedly is more accurate than the government....also decile calculations are important to keep in mind.....while the poor bear the brunt of unemployment, the white collar and senior job holders are doing quite well thank you while they turn a blind eye to those who suffer...those people can go fuck themselves....
"Job growth and economic improvement are for REAL"
These data points are for REAL... and they do not bode well:
Between January of 2007 and January of 2012, the US saw over 20 million added to SNAP (from 26,367,174 to 46,449,850). That is a ~76% increase in 5 years.
http://frac.org/wp-content/uploads/2011/01/snapdata2012_january.pdf
Between April of 2008 and April of 2012, the US national debt has grown by ~$6 trillion (from ~$9.6 trillion to ~$15.6 trillion). That is a ~63% increase in 4 years.
http://www.usdebtclock.org/2008.html
http://www.usdebtclock.org/index.html
Between April 2, 2008 and March 28, 2012, the Fed's balance sheet grew by ~$2 trillion (from ~$885.4 billion to ~$2.880 trillion). That is a ~225% increase in just under 4 years.
http://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
Yes digging our way out now..It's just begun
Do not look ahead by looking in the rear view mirror that is a fallacy.
I believe one would be mistaken if they think the US will be able to repay the national debt. The GDP is not about to grow at a pace close to the pace the national debt is growing. Neither political party has the will to make sufficient spending cuts to produce a budget that is close to being balanced. Many project the national debt to exceed $20 Trillion within the next 4 calendar years.