Given that it takes 150,000 jobs to keep up with birthrate, anything under 100,000 jobs is a weak showing. Numbers under 50,000 are actually pathetic. However, it’s easy to put a positive spin on things when expectations are in the gutter.
For example, consider this headline: ADP Jobs Report Rosy.
April showers bring May jobs. At least, according to ADP, that is.
On Wednesday, the ADP National Employment Report indicated that 40,000 new jobs had been added to the private sector in May, rather the 30,000 decline that economists had expected, according to TradeTheNews.com.
While the jump in the jobs indicator is great news for the American economy, there is reason to remain stoic when it comes to ADP reports, as they have often been at variance with U.S. government data. “ADP hasn’t been a good forecaster of the job report lately. But if it’s right then the economy is stronger than we thought,” said David Wyss, an economist with Standard & Poor’s. “So far, this isn’t much of a recession.”
My Comment: Great News? Please be serious. +40,000 jobs, if it happens, is not “great news”. And lost in the headline euphoria is this little tidbit ….
On Wednesday, employment consulting firm Challenger, Gray & Christmas reported that U.S. companies are planning to ax 103,522 employees in May, up 15.0% from the 90,015 in April. May’s planned layoffs are 46.0% higher on a year-over-year basis.
My Comment: And these tidbits …
Major downsizing in the automotive sector, which has made provision for 30,011 layoffs, contributed to the May increase in the Challenger, Gray report. “The recovery plans that Ford and General Motors set into motion two years ago are being derailed due to skyrocketing gasoline prices,” said John A. Challenger, chief executive of the firm.
Wall Street is bleeding, and bankers aren’t immune. In May, the financial sector had the second-most layoffs, with 16,206 job cuts. So far in 2008, 66,031 financial jobs have been eliminated.
“There is no end in sight for the crisis in the financial sector. Every time it looks as though banks will turn the corner back toward prosperity, we hear about another major loss, which is often followed by a job cut announcement,” Challenger noted.
Somehow this is called “Rosy”.
Inquiring minds just might be interested in weekly unemployment claims. CBS is reporting Unemployment Claims Show Surprise Improvement.
That is a big improvement vs. last week’s headline Jobless claims drop, but monthly total at 4-year high.
Excuse me. Did I say last week’s headline? I meant to say the exact same story this week except the second headline was by the Houston Chronicle. Let’s take a look.
The number of laid-off workers filing claims for unemployment benefits showed an unexpected improvement last week although a key indicator of unemployment hit a four-year high.
The Labor Department reported today that applications for unemployment benefits totaled 357,000 last week, some 18,000 fewer than the previous week. That pushed applications for benefits to their lowest level since mid-April.
However, the four-week average for people receiving benefits edged up to 3.086 million, the highest level since March 6, 2004, when the country was still struggling to recover from a prolonged period of rising unemployment.
My Comment: Which of those headlines accurately reflects the picture?
The unemployment report for May will be released on Friday. Analysts are expecting that the overall civilian jobless rate will edge up to 5.1 percent, compared to 5 percent in April, and that businesses will have cut 60,000 jobs, marking the fifth straight month of job losses.
This prolonged stretch of job cuts has many economists believing the country has fallen into a recession.
However, the overall economy as measured by the gross domestic product has managed to remain in positive territory with the GDP growing at an annual rate of 0.9 percent in the first three months of the year.
My Comment: I will have something on jobs tomorrow morning. But for the first time in months I have no strong conviction headed into the report except to say that if it’s an honest report, it sure won’t be strong. And the idea that the GDP is growing at .9%, is a complete fabrication of reality based on absurd GDP deflators. See State Cutbacks Will Deepen Recession for more on GDP distortions.
The Bush administration is hoping that the $168 billion economic stimulus program which is mailing checks to some 130 million households and showering businesses with tax breaks will be enough to jump-start the economy and result in stronger growth in coming months.
My Comment: It won’t. If spending money you don’t have created growth, Zimbabwe would be the fastest growing economy in the world.
In a speech today at Harvard, Federal Reserve Chairman Ben Bernanke said he believed the economy was in a good position to weather the current hardships, including soaring energy prices. He said he believes this because there is flexibility in this realm than when the economy was hit with a series of oil shocks in the 1970s.
My Comment: Flexibility or Criminality? Even Fed governors are distancing themselves from Bernanke’s foolish actions. See Fed Governors Openly Question Bernanke’s Competence.
Week to week numbers are often volatile. It’s the monthly averages that matter most. Also notice how some are now bragging that claims are “only” 357,000. Most of last year they were close to 300,000.
Friday we get to see how creative the folks at the BLS get with their birth/death model. Whatever it is, the mainstream media is likely to put lipstick on a pig.
Mike “Mish” Shedlock
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