Guesses on Fridays jobs number?

I'm afraid I don't know quite what to think.

There are forecasts for a huge jump, though many other indicators and employment reports point to the opposite (ISM, unemp claims, etc...)

[DebJ]

1. yeh well someone here on DU last month said the day before the

numbers came out that supposedly 300,000 jobs had been gained. So much for that. Retailers do NOT increase hiring in January, they get rid of people, so I'm not expecting any gains of significance.

2. The predictions range

from 150,000 to 300,000 new jobs.

But where? I mean, who is hiring? Which sectors?

[MidwestTransplant]

3. My bet

150K plus. Bush wouldn't be on MTP otherwise.

[Frodo]

4. Am I too late to make a guess??

:-)

5. Number came out far below expectations--again

112k vs expectations 150-300k

Keep in mind, 150k new people looking for jobs just due to normal growth!

[Frodo]

6. Ok, so?

"Keep in mind" that 112k is a heck of a lot better than 1k.
"Keep in mind" that "growth lower than expected" is nothing at all like "Jobs fall" that I saw posted...um... somewhere around here by... somebody.
"Keep in mind" that expectations were 135k to 165k, no economist said 300,000.
"Keep in mind" that there are actual numbers involved in the "new people looking for jobs just due to normal growth". You don't have to pluck 150k out of thin air like it's a "real" number. In January, the labor force (workers and people looking for work) actually decreased by 15k. And the number of "discouraged" workers decreases (a big improvement over last month's number).

"Not as good as expected" can be spun as bad for Bush, it can be spun as bad for the market (though not today it would seem - since interest rates are driving this buggy) , but it can't be spun as "bad" since it's one of only a handful of months in the last couple years where jobs actually increased.

[Name removed]

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[Frodo]

8. No, he just follows real economics.

And not the kind they teach in life sciences.

Where, oh where, Mr Spillane does the 150k number come from?



The "new people" figure is a real number that is estimated every month. Yes, it's just an estimate (based on a survey of 60,000 households, but still an estimate). YOUR 150k figure is a commonly bandied-about figure based on "Well hey, there are about 1.8 million people reaching working-age every year.... and that works out to roughly 150,000 new people looking for a job each month".

That's just pulling a number out of thin air. The "civilian labor force" (these people who have jobs or are looking for jobs) went from 146,878,000 to 146,863,000 from December to January (keep in mind there is a January revision to the seasonal adjustment factors that can throw these numbers "off" a bit - supposedly more accurately, but it will take days/weeks to determine that). That's a decrease of 15,000 NOT an increase of 150,000. Last month the report reflected an increase of around 310,000 people - ALSO not 150,000.

[coyote]

10. This report

is seasonally adjusted - that's why the estimates where so high - yesterday I heard some dupe call for 300,000 new jobs! They knew the adjustments would add 100,000 - 150,000 jobs without any job growth.
That's what we got - NO jobs growth.

They can spin this anyway they want - the number is pathetic and worrisome. Right now they're ramping the futures market to try to paint a nice picture and con us into believing "we'll I guess that number wasn't too bad".

12. The jobs generated were also low paying

Retail...low paying...volume related to credit bubble

See chart

http://story.news.yahoo.com/news?tmpl=story&u=/040206/photos_bs/payrolls_012004_detail_graphic

[Name removed]

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[mhr]

14. You May Follow Real Economic Numbers, But You Have No Clue On Reality

The numbers continue to come up low, month after month.

Professional job growth is lagging terribly or those jobs are going overseas.

For a professional, a 40 to 60 percent cut in pay for a service level position is no job creation; that is backward progression.

So technically, you and others can claim success, but this is not success at all.

This economy, unlike prior economies, is not creating replacement positions.

In prior downturns, the economy would create similar positions in other industries, this is not the case today.

For specifics, look at the professional job losses in the January jobs report.

Frodo, you need to take into account realities, not your precious numbers.

[Frodo]

15. Translation "it's all about me"?

Or "don't confuse me with the facts, I've already made up my mind"?

You say pay attention to "realities" not "numbers" yet your "realities" are all subjective responses to what you are seeing personally. The BLS report lists an increase "professional and business services" since Q3 two and a half times the increase in "retail" positions. But we'll just take it on faith that everyone who finds a job this month is working for Walmart? Average hourly earnings haven't changed so much that it supports the massive outflow from well-paying jobs to McDonalds.


Sorry, but I've hear this stuff before - and from the other side. Every time Clinton produced (much bigger) positive job growth numbers they went on about how they were all part-time jobs ("I know there are tones of new jobs... I've got three of them" was the refrain). Why should I believe either one of you? It's the standard knee-jerk response to anything the other side tries to claim credit for... and now all they have to do is prove you wrong, rather than prove they actually had something to do with it. Can't we just say "100K!?!? THat's it? All those deficit busting tax cuts buys us 100,00!!!???" Instead of pretending it doesn't really exist.


I don't have to "technically" claim success. This ISN'T SUCCESS. 300,000 - 450,000 new jobs in a month... THAT is success. But there doesn't have to BE "success" for you guys to be wrong that unemployment is still getting much worse.

Like I've said before. If you go around yelling that the economy is a "-10", the other guy doesn't have to prove a "+10" to make you look wrong. He just has to show it's a "+.0015".

I call each report like I see it. "-2", "+3", "+5", "-3".... some "good" some "bad". Any time it's anything other than the "taken on faith dogma that it must by definition be a "-10" because the bad guys run the country" I'm suddenly in league with Carl Rove.

I'm sorry, but I'm not the one here who need to deal with reality.

20. But if you study all the things that show "growth"

Most all of the GDP numbers and other economic oddities are related to generation of massive credit generation (at low interest rates).

Even the jobs number was related to that--retail sales hires in JANUARY?

[Frodo]

21. Dan, Almost ALL GDP growth...

... is almost ALWAYS related to credit generation. You can't debunk growth by saying it was credit-financed. How ELSE do companies grow? Somtimes it's from savings, but I've been doing commercial financing for years and companies almost always finance growth. Alamost anything alse is merely a transfer of assets from one form to another (take money out of savings, buy a car), not "growth". When you have increased production WITHOUT an increase in the money supply you can run into a far more dangerous situation.

There's really no such thing as strong economic expansion without increases in credit.

The argument that is generally made is that, while it is generally good for "the economy", it's bad for individuals because they are loading themselves down with debt. This is correct (and I don't personally borrow for ANYTHING anymore except my mortgage) and it's a bad sign when families take on this kind of debt. But it doesn't put growth into "growth" like it isn't really there. My bank made PLENTY of loans in the 90's... it didn't make that growth fake either.

23. Normally interest rates factor in a risk premium

They did up until recently.

But you may have actually stumbled onto something here...with your mention of long-standing credit problems.

And during the 1990s there was job growth with credit growth.

[Frodo]

24. Not "normally". Always.

If you're talking about interest rates involved in lending, we ALWAYS have a buffer in there for risk.

More risk management is handled on the asset/liability controlls (in this case, how we ladder the liabilities of the bank), but it depends on what kind of "risk" you want to talk about.

Credit risk is usually handled by appropriate credit standards (at a good bank) and/or pricing. Rates seem low now, but think about the rates the banks are PAYING for the deposits they take in. The margin is getting HEAVILY squeezed, but there is still 25-75 basis points in the average loan (much more for credit cards) to pay for potential defaults. Look under "loan loss provision". It's an interesting way to compare banks soundness.

27. It would seem to me loan loss provisions

Are calculated based on models of past performance of the economy.

Let's say you had a growth in credit, without the normal growth in incomes to follow.Let's say loans took a life unto themselves.

Look at the graphs on my website.

I actually found this one of your terse postings interesting.

[Frodo]

28. Gee. And I was just starting to like slapping you down.

:-)

There is certainly some aspect of economic forecasting involved in load-loss provisions. But it's largely an internal analysis of your asset portfolio. It's relatively sophisticated, but since you have no control over the economy you basically just factor in another "risk premium" (if you will allow) to account for the possibility things will move against you. It's important to be precise, because the money you set aside for losses actually counts on the books as a loss. You can recoup it as a profit in later years if it turns out you over-estimated, but you don't get much investor "credit" for those profits since they are "one-time" AND represent poor management of your capital. Of course if you UNDERestimate the amount needed for the loan-loss provision you take a real hit on profits and you can imagine what the investors think of THAT.

You would be surprised. At a well run bank, we can usually tell pretty exactly what percentage of certain loans are going to go bad. And at a "conservative" institution you aren't seeing any problems with defaults like you probably anticipate in this economy (with all the bankruptcies going on). They also don't get involved in lending too large a chuck of cash to any one company (like a couple banks did with Parmalat).


Interest rate margins are also tighter than you might imagine. Many well run banks are far less sensitive to interest rate swings than people think. Yes, if rates go to 10% tomorrow we're going to be stuck bringing in payments on 6% loans while having to pay out higher rates on deposits and actually lose tons of money, but short of a lightning move in rates we actually balance things pretty well. A significant portion of both assets and liabilities "reprices" every month. We can rebalance the portfolio better than most think. Of course, some banks get themselves in trouble and make "bets" on which way the economy is moving and go long on maturities or focus on the short end (depending on where they think rates will go). But this is almost always a mistake. Banks should not be in that business to any significant extent. We DESERVE our profits only to the extent we aid our communities in provding for thei financing (and financial services) needs. The only "investing" we should be doing is for our trust/asset management customers. JMHO.

[mastein]

25. Risk premiums are still there

They just are not advertised. Walk into any car dealership and they will have a rate card for several (usually 4) tiers of credit.

I agree with you that what needs to be looked at is where the growth is coming from. The answer is government spending. The gobberment (pun intended) increased its spending by 27% and most of it to support the war. So yes there are lots of higher paid engineering jobs and the like in Federal service and with contractors (read Haliburton in particular).

We can talk about the credit crunch in other terms as you did above, but it seems to me to be something of a separate issue.

[Petrodollar Warfare]

9. Note about 300,000 jobs

Actually, I think it was Stephan Roach or some other bearish economist who stated at the end of 2003 (Nov 03?) that in order for the US job market to get back the 2000 employment levels this would require that at a minimum 300,000 jobs be *added each and every month of 2004.* In other words, we would need to add at least 3.6 million jobs *this year* in order to "break even" from the past three years - and that is a conservative estimate. I think that's where this "300,000" reference came from.

Of course no reasonable person beleives that 300,000 new jobs every month for 2004 is going to happen (maybe the "tax-cut" ideologues still think Bush's tax cuts will produce this, but they are quite delusional with their "quasi-mystrical" ideas about tax cuts...so I dismiss them outright). Anyhow, the last few years have seen too much outsourcing of Service/IT-related jobs overseas like India (and btw, some economists like Roach believe that outsourced/overseas *productivity* figures are inappropriately captured in the U.S. GDP/productivity figures - but no one wants to talk about that), and of course way too many US manufacturing jobs are gone - forever.

A problem that I read about last mionth is the entire tax base of the US economy is *in fact* decreasing, and there is no reason for this to abate into the foreseeable future. Thus our deficits will grow larger and larger...until the tipping point is reached and a run on the dollar occurs. (or OPEC annouces that a "basket of currencies" oil payment system will become available).

PS: The employment methodology was fundamentally changed in 1983 to make Regan look good, and no president has changed the fact that DoD and other categories are recorded as part of the "employment rate picture" - despite the fact the economists argued this confounds the actual "employment" data...

So, I think income growth (or lack thereof) is one of the more important indicators of what's really happening to the US economy...

[Gin]

13. The numbers reflect job growth in China and India by US Corporations.

who have outsourced to these countries. "Profits" and "Productivity" are also based on growth from those jobs outsourced to foreign countries. That bit of info was on CNN the other day.

Somewhere on this planet there are 300k jobs a month being created...just not here!

[West Coast Democrat]

16. SPIN SPIN SPIN

Hey! This is not good news and you know it. The stock market is going up today precisely because the poor jobs report allayed fears that the Fed would raise interest rates any time soon

[Frodo]

17. Sorry, no. Let's get our terms straight.

"Good" means an improvement or a substantial move in the correct direction (say 50k jobs lost when the previous week showed 400k). "Bad" would be substantial job losses or a strong move in the wrong direction (like gaining 100k new jobs when we got 350k last month).

The markets are responding positively because the report hit a "sweet spot" (they call it a "goldilocks" report... "not to hot, not too cold") many more jobs could result in accelerating the day the Fed raises rates, another month of 1,000 new jobs - or job losses - would seriously call into question whether there was any depth to the recovery.

You completely miss identify "not good enough" or "not as good as expected" as "not good news and you know it". There are just over 300,000 new jobs "created" since September. That's a "good" think no matter how you want to spin it. Is it "good enough"? No, Clinton did that in a month on several occasions, and without sending out all these billions of dollars in tax cuts. But trying to spin it as "bad" is silly.

[West Coast Democrat]

19. The numbers are just bad enough to make you look like

you don't know what you're talking about.

[Frodo]

22. Gee. THAT makes a lot of sense.

Not so much a reply as a lack of one. But I understand the need to get a dig in even if you can't deal with the conversation.

I go in for that myself on occasion.

You still can't make 300k new jobs a "bad" thing. I can think of 300,000 people not drawing unemployment (or lately "not" not drawing unemployment) who would disagree with you. It would be great (bad politically, but you know what I mean) if it were a million, but I'm not going to send them back because we could have done better.

18. But they were all retail jobs

Is it possible that they reported retail December job gains in January for some reason?

I don't get this.

Professional jobs were cut. It looks to me like the normal retail gain in December was somehow put in January.

I smell a stinky.

[Petrodollar Warfare]

26. Notes re income, debt, unemployment and banruptcies...

<<<<I smell a stinky.>>>>

Me too. Get used to that smell. Despite the gov't spin, the US economy is getting weaker and weaker. Our income is only growing only marginally, but our debt is exploding. This will not last much longer....and today's unemployment numbers are rather insignficant when a more macro analysis is conducted of the US economy:

Personal Income growth
3rd Qtr 2003 = 1.1
2nd Qtr 2003 = 1.0
1st Qtr 2003 = 0.8
4th Qtr 2002 = 0.6%

***So, not only the new "service sector" jobs paying less than those lost IT and manufacturing jobs that have "replaced" by cheaper labor, it is taking almost 5 months to find a job in the US, and let's not forget the masses who have given up and are no longer part of the unemployement "statisitcs." *********


http://biz.yahoo.com/rf/040109/economy_jobs_longterm_1.html

U.S. job searches in 2003 the longest in 20 years
Friday January 9, 3:32 pm ET
By Jonathan Nicholson

WASHINGTON, Jan 9 (Reuters) - The year 2003 was the most difficult for U.S. job hunters since 1983, as they faced the gloomiest job market in years, according to Labor Department figures released on Friday

According to Labor Department data, the average spell of unemployment lasted 19.2 weeks in 2003, or almost five months. That was the longest average duration since 1983, when the U.S. economy was emerging from the worst recession since the Depression. Then the average spell was 20.0 weeks.

As a percentage of all the unemployed, the long-term jobless -- those out of work for 27 weeks or more -- made up 22.1 percent in 2003, the highest annual number since 23.9 percent in 1983.

***************
Welcome to 'finance-based growth' via explicit increasing debt levels, plus some improved profit margins from soem multi-nationals who have engaged in aggressive offshore outsourcing of their IT/service related positions. The later maked the GDP numbers re "productivity" somewhat fictitious, or at least confounded.
***************

'US consumer debt reaches record levels'
By Joanne Laurier
15 January 2004

US consumer debt has reached staggering levels after more than doubling over the past 10 years. According to the most recent figures from the Federal Reserve Board, consumer debt hit $1.98 trillion in October 2003, up from $1.5 trillion three years ago. This figure, representing credit card and car loan debt, but excluding mortgages, translates into approximately $18,700 per US household.

Outstanding consumer credit, including mortgage and other debt, reached $9.3 trillion in April 2003, representing an increase from $7 trillion in January 2000. The total credit card debt alone stands at $735 billion, with the household card debt of those who carry balances estimated to average $12,000.

....According to CNNMoney, consumer spending accounts for some 70 percent of the US gross domestic product. “So the world economy is leveraged to the US consumer. And the US consumer is leveraged to the hilt,” states the web site.

Experts warn that the debt bubble potentially dwarfs the US stock market asset bubble that burst in 2000. Consumer credit and mortgage debt represent a higher percentage of disposable income than ever before. Household debt as a percentage of assets reached the historic high of 22.6 percent in the first quarter of 2003. The Federal Reserve revealed that personal savings dropped to a mere 2 percent of after-tax income in the first half of 2003.

....Conventional mortgage foreclosures in the third quarter of 2003 nearly equaled the record set in the early part of the year. The percentage of mortgage loans in foreclosure is expected to climb to 1.15 percent in 2003, versus 0.87 percent in 2000.

The American Bankers Association recently reported that credit card delinquencies, or missed payments, reached a milestone of 4.09 percent in November, and predicts that the delinquency rate in 2003 will rise to 4.34 percent from 4.08 in 2000. As credit card issuers bump up late fees and over-the-limit fees on card debt and shorten payment grace periods, fee income—the bulk of which comes from penalty fees—accounts for more than 30 percent of card-issuers’ profits, according to Bankrate.com. For many of the top issuers, it has reached 40 percent!

....The people affected “are not only low-income,” Jordan Goodman, author of Everyone’s Money Book on Credit and spokesperson for the Cambridge Consumer Credit Index, told reporters. “More and more middle-income and former higher-income—busted dot-commers, airplane pilots, programmers whose jobs have gone to India—have a lifestyle they can’t maintain anymore.”

According to experts, the fastest-growing group of indebted consumers are those 65 and older, as more and more people retire, or attempt to retire, relying on grossly inadequate Social Security payments as their only source of retirement income.

“A lot of people are dangerously close to the edge and any minor setback could push them over,” Amelia Warren Tyagi, coauthor of The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, told reporters. She also disclosed a fact that graphically demonstrates the dimensions of the crisis: nearly one third of bankruptcy filers owed an entire year’s salary on their credit cards.


**********The decade of record US Bankruptcies has begun***

'Bankruptcy Cases Break Records for the fiscal year ended September 30, 2003.'

The number of filings was 1,661,996, the largest number of cases ever filed in any 12-month period.

Fiscal Year 2003 saw the number of personal or non-business bankruptcies filed in federal court continue to increase, while business bankruptcy filings declined.

There were 1,661,996 bankruptcies filed in Fiscal Year 2003, up 7.4 percent from the 1,547,669 filings in Fiscal Year 2002. This is the highest-ever total of filings for any reporting period. Since 1994, when filings totaled 837,797, bankruptcies in federal courts have increased 98 percent.

************
Question: What is the 2nd leading cause of bankrutcy in the US?
Answer: Medical Bill related Debt, which may soon become the #1 leading cause of bankruptcies in the GOP has their way w/ Medicare..

***********
http://biz.yahoo.com/prnews/040206/nyf019_1.html

83% of Americans With Medical Debt Say It is Burdensome Enough to Prevent Them From Making Major Purchases, According to the Cambridge Consumer Credit Index

Friday February 6, 8:20 am ET

ISLANDIA, N.Y., Feb. 6 /PRNewswire/ -- Over eight out of ten Americans who have outstanding medical debt say that these debts are either a major or minor burden, preventing them making purchases of large ticket items, such as houses, cars or major appliances, according to the Cambridge Consumer Credit Index. Of those with medical debt, 17% say this debt is not large enough to prevent their purchases. Of those surveyed, 16% owe on debt associated with a medical or dental procedure, including the purchase of prescription drugs, while 84% have no outstanding medical debt. 21% of the respondents have neither medical or dental coverage, 49% have dental insurance and 76% have some form of medical insurance, including Medicare.

***********

In conclusion, the current unemployment numbers are not very meaningful when you analyze other variables, and I don't think we will have any real 'recovery' in 2004, and by mid-summer 2004 - I expect some sort of tipping point will occur in the markets, but we shall see... Regardless, it seems our currency is being rapidly debased by the Feds....but that's the only "tool" they have left.