Lickety-Split Links (110609, Morning): Previewing the October Employment Situation Report
My, this was quiet: Payroll and employee benefits giant ADP said on Wednesday that “Nonfarm private employment decreased 203,000 from September to October 2009 on a seasonally adjusted basis.”
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My, this was quiet II: The Institute for Supply Management’s Non Manufacturing Index came in at 50.6% in October, barely above the 50% sentiment measurement needed to indicate expansion, and down from September’s 50.9%. Expectations were for a rise to 51.5%.
Further, as noted at MarketWatch, “The employment index fell to five-month low of 41.1% from 44.3% in September. The percentage of companies adding workers fell from 13% in September to a record-low 5% in October, matching the low reached last November.”
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My, this was quiet III: Also at MarketWatch, “The decline in the ISM employment index, along with a sobering ADP report, “suggests downside risk for Friday’s October jobs report,” said economists for Action Economics. Economists surveyed by MarketWatch currently expect a decline of 150,000 in October nonfarm payrolls.”
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As to more updated predictions reacting to the above and other reports this week, here is Seeking Alpha’s Jeff Miller with a round-up of a few of them, including his own:
Our indicators suggest a net job loss of about 140,000, a little better than the Street estimates of -175K.
TrimTabs also uses real time data. Their estimates are based upon tax deposits for salaried employees. They see a net job loss of 284K.
WANTED Technologies, a relatively new entrant in this field, has a model based upon online help-wanted advertising. This is an innovative and different approach to real-time data. They see a net job loss of 224k.
As to the unemployment rate, economists surveyed by the Associated Press see it coming in at 9.9%, as does a Dow Jones survey of analysts. Both surveys predict 175,000 seasonally adjusted jobs lost.
The October report will be here at 8:30 a.m.
Everyone under estimated the actual job loss, that is total employment dropped by 589,000. So much for saving and creating jobs, anyone believing that line is math challenged.
The Not in Labor Force number continues to increase significantly, meaning the ranks of those who have been unemployed over 1 year continues to become more intractable.
Since huge numbers of people are transitioning from the official definition of unemployment ( 1 year), the 10.2% official rate once again soft pedaled the unemployment picture.
According to Table A, http://www.bls.gov/news.release/empsit.t01.htm there are now 5,995,000 chronically unemployed (> 1 year). Up by 73,000 from last month. Looking at the stats, if this pace of none job creation continues, the 5 million people who became unemployed since last October will mostly be uncounted by next June. Talk about the statistical memory hole. You know there is a possibility that theoretically, if job shedding stabilized at a low rate, unemployment would by current definitions go down even though total employment was stagnant or slowly decreasing.
And here’s the demographic irony for those looking down the road, as the baby boom generation goes into retirement true unemployment will gradually decrease by attrition. Here you see the joy of the Obama solution, which by the way was exactly how the Europeans tried and failed to solve their chronically high unemployment. The Japanese don’t have high unemployment (5.3%) due to their population decrease even though they have been going through this for 10 years. http://www.tradingeconomics.com/Economics/Unemployment-rate.aspx?symbol=JPY This is not to say their unemployment didn’t increase, it did by a measly 1.9%.
Comment by dscott — November 6, 2009 @ 9:10 am