Employment Report Is Less Bad, But It's Not Rosy

This morning's better-than-expected labor report was welcome news. Although non-farm payrolls continue to fall, job losses of 247,000 were better than expected. July marks the fourth month in a row that payrolls have fallen by less than 600,000. The employment picture is still ugly, but at least it's moving in the right direction.

Yet the strength of the recent rally in stocks already prices in a big improvement in the economy. While today's labor report is encouraging, it only provides further evidence that things are not getting better; they are simply getting worse at a slower rate.

According to the labor report, there are now 796,000 discouraged workers in the economy. These are people who have simply given up looking for work because they believe no work is available for them. That's more than twice as many as a year ago. This partly explains why the official unemployment rate fell from 9.5% in June to 9.4% in July. When people lose hope and stop looking for work, they are no longer counted as unemployed.

Comments

[Roger Knights:]

How many temp census workers were hired in July?

Aug 07 02:43 PM

[Mad Hedge F...:]

More like a deep burgundy. Looks like I am going to have to be the designated driver on this one. The Friday nonfarm payroll showing losses of only 247,000, with upward revisions to May and June, is signaling to many that the bull market is back. You might as well put a giant neon sign on your roof saying “party here tonight.” One can never underestimate the animal spirits here. I’m sure the newspapers are going to call the 0.1 % micro improvement in the unemployment rate to 9.4% as the beginning a major trend. But I don’t see any consumer spending on the horizon, and I was able to breeze through my favorite restaurant at lunch because it was still half empty. I think what is really happening here is that having priced in Armageddon in March, we are now pricing it back out. What’s an Armageddon worth? Some 3,000 Dow points, or 350 S&P 500 points, where we are right now, sounds like the right price to me.Let me know when you’re ready to go home, and I’ll pile your inebriated carcasses back into the car. I’ll even take the breathalyzer test.

Aug 07 02:50 PM

[Hmm?!:]

LOL. Hilarious and sadly accurate.


On Aug 07 02:50 PM Mad Hedge Fund Trader wrote:

> More like a deep burgundy. Looks like I am going to have to be the
> designated driver on this one. The Friday nonfarm payroll showing
> losses of only 247,000, with upward revisions to May and June, is
> signaling to many that the bull market is back. You might as well
> put a giant neon sign on your roof saying “party here tonight.” One
> can never underestimate the animal spirits here. I’m sure the newspapers
> are going to call the 0.1 % micro improvement in the unemployment
> rate to 9.4% as the beginning a major trend. But I don’t see any
> consumer spending on the horizon, and I was able to breeze through
> my favorite restaurant at lunch because it was still half empty.
> I think what is really happening here is that having priced in Armageddon
> in March, we are now pricing it back out. What’s an Armageddon worth?
> Some 3,000 Dow points, or 350 S&P 500 points, where we are right
> now, sounds like the right price to me.Let me know when you’re ready
> to go home, and I’ll pile your inebriated carcasses back into the
> car. I’ll even take the breathalyzer test.

Aug 09 12:22 AM