February 7, 2014

Mark Zandi Still Isn’t Buying That December Was So Bad, Seems to Lower His 2014 Jobs Outlook Without Admitting It

Filed under: Economy,Taxes & Government — Tom @ 10:39 am

Mark Zandi seems to have forgotten that he told those on Wednesday’s ADP conference call that he expects monthly job growth to be 225,000 for 2014. My notes indicate that he (my notes, not his exact words) “expects a breakout to (a) 225K average for all of 2014.”

As can be seen in this CNBC video, he seems to have taken it down, while acting as if nothing has changed (Zandi segment begins at the 1:24 mark; bolds are mine):

HOST: Mark, did you have the high number on the way into this?

MARK ZANDI: I did. I had 170. I was high.

HOST: So what do you think went wrong here?

ZANDI: Well, you know, the way — I think a lot of weather is still in this number, and the 30,000 decline in government, something odd is going on there. So, y’know, take the 113, add in the 29 for the lost government, we had upward revisions, we’ll get more upward revisions for the December number when it’s all said and done. We’ve got a number of revisions coming in.

The bottom line in my view is that the trend in the job market has not changed. Nothing fundamental is going on here. We’re still in the 175 – 200k per month, and that will become evident in the spring. I mean that rings hollow on a day like this when we get a weak number. But I think that’s the reality of what’s going on.

I suppose that Zandi can claim that we haven’t seen the “breakout” yet, and that when it happens, it will pull the year-long average up to 225K. But today’s report, assuming it doesn’t get revised (it will, but we don’t know which way), already requires job adds averaging 235K during the remaining 11 months of this year.

But if, as he seemingly implies, we’ll still be at 175K-200K in the spring, the rest of the year will have to average something like 275K for the full-year average he predicted on Wednesday to occur. That seems quite unlikely.


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