Posts Tagged ‘Unemployment report’

Waiting on the number

Wednesday, August 4th, 2010

What happens when an irresistible force meets an immovable object? I am not sure but I think we may be facing this paradox as it relates to the markets and this week’s employment situation report. Most economic reports over the last month have indicated a soft economy and we hear more and more talk of a double dip recession. While a double dip recession is not likely, the consensus seems to be that we will run out of stimulus spending before the recovery begins in earnest. Yet equity markets have skyrocketed in July. The Dow is up more than 1,000 points since it hit a nine-month low following the release of the June employment report on July 2.

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Numbers spin

Friday, July 2nd, 2010

When searching for the press release for the June unemployment report form the Bureau of Labor Statistics I came across the White House blog from the Council of Economic Advisors.

Under the headlines: the Employment Situation In June,  it stated, “Private nonfarm payroll employment increased by 83,000 in June and the unemployment rate fell two-tenths of a percentage point to 9.5%.”

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Looking foolish

Friday, June 4th, 2010

When the current Administration took over in 2009 we praised its realistic analysis of economic conditions. President Obama talked frankly about the tough conditions we were experiencing and resisted pouncing on each positive bit of news as sign of a turnaround even though his opponents would blame him for each down tick in the markets.

It was refreshing as the previous administration’s economic team were tossing around rosy scenarios up until the day they asked  taxpayers for a $700 billion bailout of the financial system; or else.

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The truth will set you free

Friday, January 9th, 2009

Is there good news in this bad employment report? Perhaps.

The December employment situation report was as bad as could be. Non-farm payrolls fell by 524,000 and the unemployment rate rose to 7.2%. An additional 154,000 jobs had been lost in October and November according to revisions to those month’s reports.

When you look further into the numbers things get worse. There was a drop in hours worked to an all time low when seasonally adjusted and more people are only working part time. Shadow Government Statistics is reporting that the drop was 697,000 with seasonal biases worked in.

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Misery loves company

Friday, September 5th, 2008

Who knew all the market needed was a sharp increase in unemployment to get going. The Dow Jones and S&P 500 indexes both ended the day in positive territory despite the unexpected jump in the unemployment rate to 6.1% from 5.7%.

But all is not rosy. The liberal advocacy group Campaign for America’s Future put out a release Friday noting that “the misery index” has risen to 11.7%, it highest level since 1991. You may recall that the index came into vogue during the 1970s and 1980s political campaigns. The index is a composite of the unemployment rate and inflation using the annual Consumer Price Index.

The press release got us thinking. We have chronicled in this space recently how the various methodologies to calculate economic reports by the Federal government have been altered to produce more positive numbers. In the July issue of Futures, we interviewed economist John Williams who keeps up the government’s economic statistics using the original methodology at his firm Shadow Government Statistics (SGS).

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Unenjoyment day

Thursday, September 4th, 2008

Suspicion of government economic reports is at an all time high and given our government’s propensity towards happy news, and that we are in the midst of a political convention, traders must be looking at tomorrow’s unemployment report with a certain amount of trepidation.

That we are going into the number on the heels of a 344 point drop in the Dow Jones Industrial Average makes things more interesting. Did someone know something?

Initial unemployment claims for the week ending Aug. 30 jumped to 444,000, well above consensus estimates, contributed to negative sentiment. But tomorrow is the big one and given today’s move, a slightly better than expected report could cause quite a rally. As someone who followed these reports very closely, I can say that it is not that unusual for the unemployment report to come out completely counter to what initial claims showed. So it would not be proof of some conspiracy if tomorrow’s report is positive.

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It’s the dollar, stupid

Monday, June 9th, 2008

Cause and effect is always a tricky concept and that is most true when it comes to markets. With only two directions to go any explanation can seem valid. So when the Dow Jones Industrial Average dropped nearly 400 points on Friday there where many explanations out there.

The sharp increase in the unemployment rate, to 5.5% from 5% — when most expectations called for a minor increase to 5.1% — was obviously what got the bears rolling and the consensus is that the sharp increase in crude oil is what kept up the selling pressure.

I would suggest that Comments from European Central Bank (ECB) President Jean-Claude Trichet, suggesting that the ECB could soon raise interest rates to address rising inflation is what triggered dollar weakness and consequently the oil rally but it has already been determined that evil speculators are the only cause of higher oil prices. Isn’t it nice for “big Oil” and Opec that there is a new scapegoat on the block to point at.

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