16 Reasons Why David Rosenberg's Not Buying Employment Report

Tyler Durden's picture

Via Lance Roberts of Street Talk Live,

I went through the January data one last time with a fine tooth comb. I fail to see what got everyone so excited, beyond the upward revisions to the back data. That only proves that productivity has been weaker than initially thought. And the income from those upward job revisions has probably already been spent. But as I highlighted yesterday, the broad-term trends are slowing down and doing so discernibly.

There were a variety of sobering developments in the latest data report.

1) Let's not forget that the 157k headline print was below consensus and 22% lower than the 201k average of the prior three months. That's the problem with upside revisions — they go on to exaggerate the slowdown.


2) Private payrolls have slowed for two months running — 256k in November to 202k in December to 166k in January. This was actually the lowest print in four months and fully 26% lower than the three-month average. So get with the program — the pace of private sector job creation is slowing down, not speeding up.


3) Temp agency employment fell 8k in January, the first decline since last September. This sector is widely viewed as a leading indicator of labor demand.


4) Self-employment in the nonfarm sector plunged 189k, the sharpest decline since last February and down now in three of the past four months. This too is a leading indicator and moving in the wrong direction.


5) Average hourly hours for production and nonsupervisory fell 0.3% in January after a flat December. Another leading indicator heading in the opposite direction as escape velocity.


6) As for incomes, or lack thereof, average weekly earnings dipped 0.1% for production and nonsupervisory workers.


7) Household employment came in at the grand total of +17k. That is an 85% haircut from the average of the prior three months. Why all the exuberance over this report. The peak in Household employment was in October. How has that been missed by the masses, especially since it is this metric that leads at turning points?


8) The population and payroll comparable number from the Household Survey showed a 351k plunge, the second such large decline in the past three months.


9) The most cyclical component of payrolls is durable goods manufacturing - the grand total of +3k in January or 67% lower than the three-month average and the weakest tally since October. This widely-held view of "escape velocity" comes from where exactly? The front cover of Barron's?


10) Education/health/leisure/professional services accounted for half the job gains last month. This is why the diffusion index for private payrolls slid to 59.6 from 64.5 in December, a four-month low. And in the mother of all non-ratifications, as it pertains to the ISM index, the diffusion index for manufacturing (which measures the breadth of the job gains) dropped from 54.9 to 48.1 in the first sub-50 reading since last September.


11) The markets rejoiced a report on Friday that revealed a 126k increase in the ranks of the unemployed in January and this followed a 164k pickup in joblessness the prior month. Try and convince these folks how great the economy is doing, Ditto for the 169k that dropped out of the labor force.


12) Of the increase in unemployment - those who were job losers jumped 229k, the sharpest advance since November 2010. Job leavers fell 2k and down in two of the past three months — a sign of receding worker confidence. New entrants dipped 4k after a 35k falloff in December. And re-entrants fell 72k, In other words, the churning or turnover in the labor market was left for wanting in January.


13) The manufacturing workweek slipping 0.25% to 40,6 hours from 40.7 and overtime stagnated for the second month in a row, And you call this a renaissance? Average weekly hours sagged 0.5% in the key durable goods sector,


14) The short-term unemployed — a real-time cyclical indicator — measured by the number of folks unemployed for less than five weeks, spiked 90k after an 80k rise in December. And those unemployed for between 5 and 14 weeks soared 190k and up in three of the four months.


15) Those working part-time because they have to, not want to, due to "slack" economic conditions, jumped 198k in the steepest advance since last September.


16) The average weekly hours index for production and nonsupervisory workers — a GDP proxy — was down 0.2% in January, the sharpest decline since last August,

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Say What Again's picture

Did you look at the recent reports by YUM & Ding-Dongs?

bobthehorse's picture

Nobody believes the employment report.

It's all bullshit.

It's been bullshit for a while now.

The whole world smells like a fart.


Temporalist's picture

Dear Mr. Rosenberg,

Nobody gives a shit as the markets are up.  We just need to say "recovery" a few trillion more times.


Ben and Barry

P.S. - people don't want to be sober or we'd be in actual trouble

Joe moneybags's picture

Well, Mr. Rosenberg, you have convinced me that it is all hype and hoopla, just as you have for every month since march 2009.  And every month, i get my ass handed to me, as I take your analysis to heart, and try shorting the obviously overbought market.  When will I learn to just fade you?

Whiteshadowmovement's picture

Its not too late my friend, you still have a small (but closing) window to jump in just before retail does

economics9698's picture

Joe the problem these guys have is timing money bubbles.  There is a bubble but they don't have the timing down.  2008, 2009, 2010, 2011, 2012, 2013... five years is a normal cycle.  Fall 2013.

Shizzmoney's picture

I say 2014 is when it really starts (layoffs due to Obamacare), with 2015 being the crash date (markets fear that the Fed will have to raise interest rates).

BullsNBeers's picture

What retail? Bunch of algos circle jerking one another while the parrots on CNBS keep screaming about how everyone needs to get on the train before it leaves the station.

I know where that train is going and so does everyone else who has not been napping for the last 20 years.

This is a cry for the sucker money to get in. Yeah. It might jack the market off another 10 percent to get the lay investors back but guessing when the rug gets pulled out again might as well be forecast by someone reading chicken gizzards or tea leaves.

Sam Clemons's picture

No kidding.  Who pays him to write these reports?  16 reasons?! I only need one - the government is going to lie to suit their agenda.  I don't see why we need long-winded guest reports stating the obvious.  And it doesn't matter proving that they do or don't lie because they will just do it anyways.  Give it up Rosie.

CrashisOptimistic's picture

Why are you doing either in an arena that is dominated by HFT and is thus not a market at all.

Sell all your positions.  Buy farmland.  

Yes, this means you'll have to get out of your chair.

Go Tribe's picture

Yep, this guy is bullshit. He needs to fess up about where he's putting his money. I figure Eyore is a billionaire by now.

Cursive's picture

All Joe Lavorgna could talk about on CNBS was that +200K 4-month moving average.  Oh, my second derivative, where have you gone?  (I know, I know.  The second derivative is not on the talking points memo faxed around by some Fed douchebag.)

Say What Again's picture

I can't stand how they use "second derivative." 

Those idiots can't find the first moment, let alone the second, third, or beyond.

Cursive's picture

@Say What Again

LOL.  Your reply locked me out an my edit.  Tyler or WB7, could we get a mock funeral for the second derivative?  Born 2010, Died 2013.  RIP, little brother.

Say What Again's picture

I have a funny feeling that Banzai is busy working on a "Twinkie / Ho Ho" project.

But that's just a guess.

Cursive's picture


I know just enough about physics not to be insulted by that.  :)

miker's picture

You've got to believe the numbers are worse than they are posting. Things are getting dire. 

See where the Feds are going after S&P.  Of all the choices for fraud and the timing on this one.  Looks like

they are trying to make sure they don't do another downgrade of the US Treasury.

adr's picture

You don't need a job, JUST INVEST IN THE STOCK MARKET!!!

You don't have any money to invest you say? No worries, GO TO COLLEGE!!!!!

No not to LEARN stupid, to get STUDENT LOANS!!! Borrow $100k a year or more.

The school only costs $25k a year? Dumbass, YOU KEEP $25k FOR EXPENSES AND INVEST THE $50k THATS LEFT!!!

Preferably invest in Amazon, Lulu, Chipotle, and Netflix, so you get the maximum return.

In four years you will have $400k in debt, BUT YOUR STOCK HOLDINGS SHOULD HAVE QUINTUPLED OR MORE!!!!

Now you can pay off your $400k in debt and keep the half million or so you made. Hell don't cash your stock, DOUBLE DOWN AND KEEP IT UP!!!!

Soon you will be partying in Milan, driving a Lamborghini, and owning a posh 5000sq ft estate. Ballin' man, Ballin'

IT'S SO SIMPLE!!! You also get to laugh at all those morons working away at dead end jobs. Get on a few message boards and post, "Hey idiot, don't get mad, INVEST!!!!"


Make sure to kiss your picture of Obama and Ben Bernanke every night for making all your dreams come true. The least you can do.


Whiteshadowmovement's picture

Haha funny post +1

As sarcastic as youre being, i really hope some young people are reading this and listening to your advice...


Sherry Bobbins: Alright, children, let's clean up this room.

Bart: Aw, man...

Lisa: Do we have to?

Sherry: Now, now. I know a little secret that will make the job go twice as fast.

If there's a task that must be done,
Don't turn your tail and run,
Don't pout, don't sob,
Just do a half-assed job.

If you cut every corner,
It is really not so bad.
Everybody does it,
Even mom and dad.
If nobody sees it,
Then nobody gets mad.

Bart: It's the American way!

Sherry: The policeman on the street
Needs some time to rest his feet.

Chief Wiggum: Fighting crime is not my cup of tea!

Sherry: And the clerk who runs the store
Can charge a little more
For meat

Apu: For meat!

Sherry: And milk

Apu: And milk!

Sherry & Apu: From 1984!

Sherry: If you cut every corner,
You'll have more time for play!

All: It's the American way!

Yardfarmer's picture

all you guys quite honestly have a lot more to offer than this overblown gas bag. thanks for your input.

sbenard's picture

News, data, and facts have become irrelevant! We have printed prosperity now, because we're in a bubble!

azengrcat's picture

Can't hear you over all of the money printing out of the BTFD account

Orly's picture

This is Lance Roberts, not David Rosenberg.

What am I missing?


Love me some Lance!


mkhs's picture

Your the only one that noticed. 

insidious's picture

I appreciate David Rosenberg's analysis (as I like to think rationally about the economy even if it doesn't make me any money - except maybe the real rational thinking is "dont' fight the fed" or "BTFD" and that might make you some money for a while) but it does NOT mean I am going to short a market powered by Central Banks and Governments all over the planet AND it certainly does not mean that I'm into Buy and Hold (except some precious metals). I keep a close eye on the exits (but even then they might be stalled if I need them in a pinch) and I err on the side of cautiousness (meaning I get out frequently and miss some of the moves but I catch a significant portion of them as I get back in as easily as I get out).

Dineroguru's picture

Yea...he is just negative!  What about all those dollars the Fed is printing!

q99x2's picture

We're airborne. I'm flying.

dunce's picture

I just estimate how much they lie in the official reports, but after reading his analysis , i am going have to double my skepticism to get closer to the truth. Keep up the good work just for practice though under the current market manipulation, the information can not be profitably used because of the disconnect from reality. Some day fundamentals  will useful again.

wonderatitall's picture

hey obama investigate this guy...haven't these people learned that any criticism of anything our god king does will be PROSECUTED AND DRONED