Payrolls Report Indicates Recession

With the second straight monthly decline, the non-farm payrolls report from this morning is flashing the recession signal.

Since 1960, every back to back reading of a negative jobs number (red line below) has coincided with a recession. Click to enlarge:

Comments

[vgtwoomph:]

I think we are already in recession and it's going to be a very short one. Look at all the data and numbers, they are all bleak, if this isn't recession then what is.. But having said that, I don't think we need to panic, discounting the depression, traditionally recession is part of the cycle and it's short. Hopefully it follows the trend this time.

2008 Mar 07 10:26 AM

[Will Rahal:]

What is more worrisome is the fact that Services(84% of Employment)is decelerating rapidly.
I have charted Employment in Services excluding
the more steady Health & Education jobs, and it looks like a bouncing ball with an 8-9 year cycle, about to hit the ground.

2008 Mar 08 11:28 AM

[Matt from Q...:]

There are a number of factors to take special note of in this month's NFP

1. The economy has now lost jobs for 2 months in a row and the 3 month moving average of job creation is -14,667/mth, so on a moving average basis we have contraction in job creation over a 1 quarter period (gov't and private sector).

2. When you factor out gov't job creation, the 3 month moving average of job creation in the private sector is -21,667/mth.

3. The labor participation rate in the Household survey fell 450,000 and if these job seekers were counted the unemployment rate would have risen to 5.1%.

4. The number of part time workers swelled by 637,000 from Jan. 07 to Jan. 08. This category includes those who either can't find (but want) full time jobs or who have had their full time hours reduced to part time.

5. Factoring out government job creation (38,000) in February reveals the private sector lost 101,000 jobs overall in the month.

2008 Mar 08 04:13 PM