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Payroll Postmortem
In perhaps the under-statement of the year, BofA's Economics group note that "May's unemployment report was a disappointment" with evidence of a weather reversal and weakness concentrated in construction, leisure, and temporary help. Pointing out that "This is the recovery of fits and starts", BofA believes we are entering a slow patch in the second half of the year. They do not see this report as sufficient to prompt Fed action in June, but it makes August QE increasingly likely. The weakness in the US data is overlapping with an intensifying crisis in Europe, which means the risk-off trade continues.
From BAML Economics:
Payroll trend is slowing: The economy added 69,000 jobs in May, and April and March were revised down a cumulative 49,000. This provides an offset to the solid gains of 250,000 during the winter. We believe this is largely a weather payback. In our view, the underlying trend in payrolls is close to 125,000.
Weather reversal: There was clear evidence of a weather payback, with construction jobs down 28,000, leisure/hospitality jobs down 9,000 and temporary hiring only up 9,000. All three of these sectors had seen solid job growth during the winter.
Unemployment rate higher: The unemployment rate increased to 8.2% (8.206) from 8.1%, as a gain in the labor force offset an increase in household employment. The labor force jumped 642,000 after two months of sharp declines; this may be partly explained by students entering the labor force. Looking past the monthly noise, we believe the labor force participation rate will head lower as long as job growth remains sluggish.
Signs of stress: The median duration of unemployment increased to 20.1 weeks from 19.4, showing signs of distress in the labor market. Long-term unemployment leads to skill depreciation and makes it more difficult to ultimately find employment. In addition, there has been a continued rise in part-time jobs, which shows how cautious businesses have been.
What does it mean for the broader economy? Spare capacity has translated to soft wage growth. Average hourly earnings were only up 0.1% mom or 1.7% yoy, which means continued weakness in income growth. Moreover, with the three-month trend in aggregate hours worked running just 1.0%, today’s employment report suggests downside risk to Q2 GDP. This is the beginning of the slowdown, which we expect to translate to only 1.0% GDP growth by Q4.
Fed will respond, in time: While it increases the chances, we do not believe today’s report is sufficient to prompt Fed action on June 20. However, we think it is increasingly likely the Fed will announce another round of QE at the August 1 or Sept 13 meeting. The Fed will not sit idle as the economy slows.
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....and this number will also be revised down....
Hey, it's traditional.
Obama impeachment 2012.
I dont know, I think theyll just stage some huge event now.
Green light Israel. Scares the sh:t out of me.
ben and jerrys ice cream free for everyone event or lets take over the rest of the wrld event?
For extrajudicial killings, yes. For failing to resuscitate the economy after the Bush / Cheney duo shot it in the head, set it on fire and kicked it off the edge of a cliff?
Thanks for the chuckle.
.
your vote is irrelevant. there is only THE PARTY. and it never loses and election.
All he and the Justice Department had to do was prosecute fraud and quit making bankers whole on their bad bets. Remain passive on one hand and operate as the government was intended to operate on the other. Not so hard.
Instead we've got *this* clusterfuck on our hands. Stop apologizing for negligence and incompetence.
"All he and the Justice Department had to do was prosecute fraud and quit making bankers whole on their bad bets."
I'm sure that Million Dollar Bonus or Krugman will be along shortly to refute this....
Reminds me of a story I just read on paid Internet shills.
I disagree. Better to let Romney debate him and teach Americans about the virtues of private investment over socialism. Then let Americans consciously show him the door in Novemer.
I just can't wait until Romney discusses the virtues of gun bans and single-payer health care. When do you think he'll mention that stuff?
Yeah, and I am sure Romney will never sign legislation that uses taxpayer money to bailout private equity or private companies < sarc off >
No, not him, never. That would be all socialisty and he is a rock solid conservative (that signed a gun ban and instituted single-payer health care as governor of MA)
Romnebama for King 2012!
LMFAO!!!! Is this the same "private investment" that gets bailed out by taxpayers? another idiot that still believes the "two-party" lie. Wake the fuck up, Romneys supporters are the same financial houses that got Obama elected in 2008. What a maroon. Still can't recognize crony capitalism and fascism can we?
LMFAO!!!
why? just because you dont like him? impeachment should be used for crimes. lets start with starting an illegal war in Iraq and kiiling thousands of innocent people. fairs fair right?
What is it 36 times now the number revised down after print and downward revision is announced way back in the obituriaries of the paper. Actually posting BLS numbers would make sense in the obituaries, come to think of it.
five devastating storms will mark the summer of 2012 and thus accelerate the process of world geopolitical swing:
. US relapse into recession against the background of European stagnation and BRICS slowdown
. dead end for the central banks and interest rate increases
. storm on the foreign exchange and Western sovereign debt markets
. Iran, the war ´ too far ª
new crash in the markets and financial institutions.
Full Analysis:
http://www.webcompact.net/index.php/news/21800-summer-2012-iran-war-crash-in-the-markets-and-financial-institutions
Thanks for the Spam, wanker.
Couldn't you at least write something trying to pretend that this senseless plug for your blog was On Topic?
Through it all, Liesman (CNBC) is still babbling, things aren't so bad, folks aren't reading the right reports, we're set for 2.5%% growth (contradicting everyone). The Liesman crowd gave us...zero interest rates, massive FED intervention, absurd bond yields, continual buildup of debt - and it did no good. (Liesman would say we are still slogging forward.) The criticize Santelli's ideas as "unworkable in the real world" while insisting on...more of the same.
if you are listening to those monkeys on CNBC for your news you are truly misguided and possibly high.
i am willing to send you my address to send whatever you are smoking or snorting and allow me to enjoy the world according to those fools.
"They do not see this report as sufficient to prompt Fed action in June..."
There will be dissent...
You mean the warm winter was a...<gasp>...mirage?
Pulling demand forward leaves a lull elsewhere. TANSTAAFL.
Investing in this market you've got to ask yourself one question.. "Do I feel lucky?"
Well, do ya punk?
Well, there is one other question that one should at least passively entertain before parting with those freshly printed fiat coupons, and that is simply this. What would a magic Elf riding a rainbow colored, skittle shitting unicorn do?
eat his own feces?
+1 keep trying to look for "fair" value of anything in these "markets" and then what is cheap or rich relative to that - good luck.
DAMNNN YOUUUU WEATHER!!!!
We seem to hit a lot of slow patches
My Dad's employer is trying not to lay off any more people and cut salaries by another 10% effective today, June 1st. How do these cuts show up in unemployemnt numbers?
Underemployment? Deflation? Stagflation?
I think you already know the answer but I'll humor you anyway ... they don't.
You sound like a troublemaker...
passive, aggressive often gets the point accross
possible militant- better send a drone
"cut salaries by another 10% effective today, June 1st. How do these cuts show up in unemployemnt numbers?"
They fall firmly into the "Jobs Saved" slot in the White House Spin Machine, while the person hired by the government to process their newly qualified for SNAP benefits will be fed into the "Jobs Created" slot.
See, what you tried to portray as bad news was really good news! Rally on Dow, rally on....
On an OT note, if you enter the word "Whitehouse", and then toggle spellchecker, guess what one of the options offered is...you got it! Whorehouse! Just too good NOT to put in here!
Our myopic "leaders" still haven't figured it out. They can pour all the gas they want down the carb but the engine is seized up.
Your cannot outsource for 30 years, then expect a gossip site on the internet, hamburger joints and Big Boxes selling Made in China shit, to sustain a nation.
Exactly. American stimulus has worked quite well, and produced a ton of jobs.
In China.
Now you tell us...
Excellent post, pretty much sums it all up. Well done!!!
You are correct sir, plus one. Until there are some real consequences for these paper-pushing, wealth-stealing motherfuckers the capital and resource mis-allocation and mal-investment will continue. The producers of goods and services of real value have long since gone to the sidelines and the only folks who fear eCONomic collapse are those who know that the true value of their labor ain't shit. This is why fraud has remained unprosecuted, the status quo and "leadership" of the last 30+ years would have to prosecute themselves.
Hedge accordingly (hint: all economies are really local and becoming more local by the minute)
amen to that
AMEN Brother!
But but but ... Gov payrolls have been growing, with pay increases and fantastic benefits too.
"Your cannot outsource for 30 years, then expect a gossip site on the internet, hamburger joints and Big Boxes selling Made in China shit, to sustain a nation."
But, but, isn't that why we created the banking industry and all of their complicated "investment vehicles"? besides, you have ignored the fact that now FaceBook shares are affordable to to masses that use its "service"!
Payrolls, consumer income slowing. 10 year Treasuries BELOW 1.5%. STALL SPEED!!!!!!!!!!!!!!!
AirForce 1 Heavy Going Down!!!!!!1
http://confoundedinterest.wordpress.com/2012/06/01/a-very-european-recovery-unemployment-u6-rises-to-14-8-non-employment-rate-at-41-6-manufacturing-slows/
1.47 fucking percent on the 10 year, and people don't understand how oil supply's pinch has created perpetual deflation.
"Weather reversal: There was clear evidence of a weather payback, with construction jobs down 28,000, leisure/hospitality jobs down 9,000 and temporary hiring only up 9,000. All three of these sectors had seen solid job growth during the winter."
MORONS!
This is stupid phrasing.
Those jobs did NOT see solid growth during the winter. That is seasonally adjusted bullshit. This winter was the all time record for warmth in the US and the seasonal adjustments pushed numbers higher on expectation of it being colder than it was. People Outside Were Still Working!
The "giveback" is not a giveback. It's just accurate.
God, I am so tired of optimistic bullshit that is costing people enormous amounts of money.
It's gotta seriously blow up for QE in June.
As far as the argument that they won't wait longer because it might be viewed as a political move in nature,
That is horseshit.
They know most people are still asleep at the wheel and totally unaware of what is going on around them.
I talked to my neighbor yesterday, who is an educated man running his own production company, and he had no idea Europe was blowing up.
It's coming. But not yet.
Oh brother, here we go with that "soft patch" crap again. Soft patch my arse. Looks like quicksand to me.
Wow, you know shit is bad when even the corporations aren't hiring the free agents to 10 day "no benefits" contracts anymore.
Also, add to the fact risk off will definitely be happening in Europe, not just because of the bond failure, but also because of Euro 2012.......everyone, including the rich people, are going to be drinking their faces off watching their country in soccer instead of investing.
"everyone, including the rich people, are going to be drinking their faces off watching their country in soccer instead of investing."
And the Olympics, let's not forget about the Olympics......
Job market crashing again? Youth unemployment 50% in the PIGS? Euro ready to bust? Let's do more austerity!
We have a generation of recent college grads, trained and energetic, who 1) want to produce and 2) need to buy things. Hello? Maybe time to figure out how an economy works, folks?
What are you doing, embracing the new Euro meme of "Growth!!!" (when that is a euphemism for run up more debt -- or wait, rather, it's a euphemism for let's have Germany pay for our vacations).
Austerity is the novel concept of STOP SPENDING MONEY YOU DON'T HAVE.
LMFAO!!!
"Money" is a man-made construct and is irrelevant. I think what you mean to say is stop spending resources that you don't have. Welcome to the post human population growth world mother fucker.
In the meantime the capital and resource mis-allocation and mal-investment will continue so long as the fraud remains unprosecuted and there are no real consequences for the bad behavior of the paper-pushers. Fuck them, the producers of real value have thrown their hands in the air and gone to the side lines. Wake me when all you fucks are ready to have an adult conversation and the two-party lie is dead. Atlas continues to shrug, hedge accordingly.
Exactly. It's fraud and misallocation that's killiing the effect of economic policy moves. Until the electorate wakes TF up, and votes for the party that is less in the pocket of WallSt, we're going exactly nowhere. Even a little less in WallSt's pocket counts - politicians can smell a change in the wind immediately.
But if the voters can't recognize which candidate is more in WallSt's pocket, and their voting pattern doesn't punish corruption - why in the hell should any politician care? Corruption is quite profitable, and money is the new "good".
There is no "party" not in the pockets of Wall St. Just a few marginalized individuals in Congress and the Senate.
Wake up! there is only one party, for the banks and financial houses, by the banks and financial houses.
If you pretend all candidates are equally corrupt, in your voting, because none are 100% pure, you're sending the signal that corruption doesn't matter.
If, instead, you vote for the candidate that is 59% corrupt, over the one that is 61% corrupt, we will steer back towards sanity. You have the right to vote - use it. Otherwise, you're just whining.
Still not familiar with what integrity looks like are you? You are the coward and "whiner" and I will vote for the least corrupt if that means I have to write that name in. Then I will continue to be productive and sleep well. Nature is about to teach pussies like you a hard lesson. Grow the fuck up, no one but yourself can or will insure your survival, be an adult already. Life is hard, deal with it loser.
Have you tried decaf? Midol? Maybe a rabies shot?
How insightful. Struck a nerve did we?
Now now, some folks haven't figgered out that the Decepticrats and Republicons are different sides of the same coin yet, although watchin' the Republicons spend munny (during the Bush admin.) like a buncha Decepticrats shoulda made it obvious.
Spain and Ireland were running budget surpluses when the crash hit. Except for tiny Greece (3% of EU zone, economically), Europe's problems have nothing to do with "vacations" or big social spending.
Now that we've dealt with that particular TeaBagger fantasy, please let us know how your philosophy deals with the real problem. There's a highly-trained, energetic generation - our kids - who want to produce and want to buy things. What does the TeaBagger party have to offer them?
You're playing word games and I think you know it.
Spain and Ireland were guaranteeing deposits in banks with 15 zillion tons of bad mortgages. That means the bank deficit was the country deficit.
They WERE spending money they didn't have. If they wanted to backstop those mortgages, they should have been cutting all other government VACATION money, aka, salaries and pensions.
EU unemployment wasn't an issue before the US mortgage meltdown happened. Bills were paid in the EU from people that had jobs. The mirage that IS the US economy blew up in '08 just like any pump and dump stock.
The entire US economy has become one gigantic pump and dump scheme where the insiders ALWAYS cash out at some point and leave the debt and the problems to the bagholders.
Sure, the Europeans are living in their own fabricated socialist nirvana lalaland but they were OK when they played by their own rules and had enough commerce within the EU to keep going.
Don't even get me started on "zillions of bad mortgages". The biggest scammers in that department are sitting on Wall Street.
Actually you're the one playing word games.
You said that the problem was 'vacations' and that other Europeans expected the Germans to pay for them.
I said that, apart from Greece the root of the problem wasn't lavish social spending; that in fact, Spain & Ireland were running surpluses. European social spending and taxes had been in balance for a long time.
Then you made a bizzare equivalence between 1) liabilities taken on in order to back foolish decisions by European bankers, and 2) liabilities taken on in order to fund lavish social spending. As we've seen, case #2 didn't happen, and case #1 was the root of the problem.
So the point stands: it wasn't vacations (that is, lavish social spending) that caused the problem; it was unregulated bankers, running the govt.
Correct! American oligarchs pulled the plug on Bear Sterns and Lehman in '08 because they KNEW the American economy was a crap shoot and a mirage.
The fucking greed at the top of our pyramid has fucked us all and will continue to fuck us every which way it can. I say, confiscate the wealth from the oligarchs and bring about some real change ... for a change.
Can't be that 1% is sitting on well over 80% of the global wealth and the 99% have to slave away so that the wealth of 1% is a) protected and b) can increase with interest.
There can be no true freedom, peace and cultural progress when one group at the very top gets richer and richer at the expense of the masses. That is why heads need to roll once in a while. WE cannot afford to support THEM and THEIR exorbitant lavish lives. THEY are too expensive for us as the collective bottom feeders and THEIR wealth is not sustainable.
Until WE get rid of THEM or THEY start downsizing considerably, there is NO HOPE and we're no better off than cavemen.
I agree but the American oligarchy is modeled on European feudalism. We broke away for awhile but were brought back into the fold in 1913.
There's nothing "European" about the American oligarchy. If you're so inclined, the Europeans kicked out what is now the American oligarchy in centuries of progroms against Jews. By the time the Jews had citizen status they landed on the shores of America. The pilgrims that built America were not Jewish. The Jews came much later when the work was pretty well done and the fruit were ripe for the picking. It's all coincidence, I'm sure. Royal Brits and the City of London were involved just the same.
Hear that giant sucking sound?
It's government eating up all the capital.
Those kids should be leaving the US in search of opportunity elsewhere. Here they're screwed.
Hear that kids? If you aren't saddled with a wife and kids, and have a set of balls, go to greener pastures like NOW.
Your forefathers did it. You can too.
Ignore the number. It's made up. It has little relationship to reality. There are better ways to measure this. Trimtabs knows how.
Somebody is holding their breath for QE III!
And who doesn't like more money? PRINT!!!
For some unknown reason the world wants them. Damn the torpedos! Sell them our dirty shirts while we still can.
The only thing i didn't like hearing this morning was the fed saying they don't know why more job's aren't being created. (They also said that the last time).
FED uncertainty generally results in no action, for now. They must still be trying to figure out why, after 3 QE's, and according to their mandate, they are unable to fulfill the simple task of creating job's. I think they run a high risk of bail out backlash, especially now with JPM about to be the ultimate test, and any new easing could be viewed as campaign negative for the chief retard.
On top of the 200d. See if it holds.
R U effing me? When are these fucks on fox news, cnbc, and all the other alphabet networks and MSNotGoingToReporttheTruth, Time, well, just about all media...going to stop telling us the economy is in a positive trend and things are getting better? Damn them all to hell.
Obama, er Nero Fiddled....well, took off for a 6 stop fundraising tour. Hope this doesn't get in the way of his Cyberterrorism efforts and also his 'Who to Kill" strategy sessions. Also, I hope it doesn't impede his seal team training so he can go in and kill, by hand and by himself, the next great terrorist. You better watch out Ben. If it's between you and his re-election....you're done.
Did'nt you get the memo? We have been in a "recovery" for the last 5 years now. How many years do you call a depression a recovery?
Oh crap, that must be the one I shredded...well, thanks for cluing me in...
Are you just naturally a smart ass or do you have to try hard?
who are the two birds in your avatar and would they mind if i Goldman Sachs them?
i agree that Obama is not doing what is required but let me remind you that numb nuts Bush didnt have a clue either and no idea Romney has no solution other than lowering taxes. it is not a left vs right issue. we are quite simply fucked because when the market finally realizes that the us is as fucked as spain they will drive 10 yr yields to 6 % and then my friend its lights out regardless of what idiot is in power.
in the mean time enjoy the summer.
Risk-off but the HUI up 6% today so obviously not all risk-off. Speaking of risk, folks still piling into Treasuries but at least the dollar seems abivilent.
With real rates negative 20 years out and with 30 yr. real rate now at 37bps (which is down approx. 40bps ytd) I cannot see why the Fed would do lsap or more twist (i.e. both nominal and real rates are already at record low levels). Perhaps extended language- not sure. it appears that the Fed is out of ammo. Check to ECB I’d say. If I am right and no Fed action in June, I'd say August is too close to elections which would create/reinforce appearance of influence on monetary policy from politics...... risk off in other words
Just my 2 cents
Because the banking system is collapsing globally again and there is no one left to buy the bad debt.
Do they have anything else to try? I haven't seen a new idea in months.
Hari Kiri?
FWIW Dept: 1/QEx = Quantum Entropy *(unconditionally) ___ {QEx-n}?
*[simply said- threading your pearl's of wisdom on Miss Piggy, about to go on a feeding frenzy at the 'Abattoir of Final Resolution' ]
jmo
Ps. we're all fucked!!!
The question is... what did Joe LaVorgna predict?
Call me cynical,
but I suspect they are "seasonally adjusting" an employment shortfall now,
in order to facilitate reporting an adjusted employment "upswing" in the months just before election.
The Fed needs to fix Spain first since Germany is reluctant. Look forward to seeing Ben Shalom as Time Man of the year again, this time for saving the Euro. It will be QE quattro
Time for the jobsnet virus and zombie bioweapon plague to clear up those unemployment numbers...
Heard on Barrons Radio at noon today while driving home:
"The fact that we are creating jobs at a slightly slower rate than before, and disappointing numbers from the Auto Industry have worked together to drive the markets lower".
Wow, and I thought that 2% down across the board was slightly worse than "lower".
God bless the media monkeys that rely on advertising from the Sell-Side.
Was up early before leaving for work today. I like to have CNBC on to see how the markets are doing in Europe and what the futures are showing. I had to laugh this morning when they had a talking head who probably is making a six figure salary talking about what he expects from todays jobs number. He actually said he was expecting a surprise to the upside or higher then the 150,000 that was expected. Marketwatch ws calling for 165,000 so their experts were even worse in their estimates. How can so many idiots making six figure salaries be so wrong so many times and continue to keep their jobs. I think most economist should be put on the unemployment line for a change. And yes, todays numbers like the past two months will be revised lower so instead of 69,000 it might be closer to 55,000/60,000. And how many of those jobs are part time? My guess is at least half.