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Notes to myself, possibly of interest to others.
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Friday, February 3, 2012

Good Jobs Data!

Barry Ritholtz:

Despite the cries of the permabears and Rick Santelli, this was unequivocally a strong NFP report. The headline numbers were 243,000 net jobs, as unemployment dipped to 8.3%. The Labor Pool increased — suggesting that the improvement was not the usual employee retirement and discouraged worked giving up looking for work.

When we go beneath the headlines, we usually see the data’s warts — not this time. Across the board this was a surprisingly strong report. BLS called described job growth as “widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing.”

As noted earlier, no single month matters as much as the overall trend — and the trend is unequivocally upwards for the better part of 3 quarters now.

Lets go to the details:... See original

Update: Rosie, as usual, demurs a bit:

Something is Fishy

...there may well be something in the seasonal adjustment process that is providing a bullish skew toward the payroll data. Fiscal policy is not stimulative and the savings rate is not falling anymore. The U.S.’s key trade partners are weakening (look at that soft Canadian jobs report!), so it all begs the question as to where is the exogenous boost to growth?...

It could well be that companies have hit the proverbial productivity wall and as such are not compelled to add to labour input — because this pickup in employment, if true, is not occurring amidst any economic re-acceleration. Indeed productivity came in lower than expected in Q4, rising at a 0.7% annual rate versus consensus views of a 0.8% increase. Q3 was revised lower to 1.9% versus the prior reading of 2.3%.

Finally, employment does tend to be somewhat of a lagging indicator — coincident at best. It will be fascinating to see if the usual decent correlation between the Challenger data, jobless claims and payrolls plays out in coming months...

The cumulative decline in hiring announcements in the last three months is 151,609, which is the largest decline we have seen since October 2007. On a YoY basis, announced hiring plans are down 74%, which is a trend we last saw back in July 2008. Ooops.

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