In his morning note, Gluskin-Sheff's David Rosenberg highlights some ugly labor market data you probably haven't seen:
No sooner did we receive last week’s poor employment report than we get added confirmation that the battle against joblessness is being lost. I’m being generous in assuming that the U.S. government has even waged a battle on this front as it focused on auto spending, housing consumption, regulatory reform, health care and loan modifications.
Initial jobless claims rose 2k in the August 7th week from an upwardly revised 482k level the week before — not to mention well above consensus estimates of 464k. A month ago, claims were sitting at 458k and we are now at the highest levels since late January. This is simply awful and if claims back up above 500k, for at least a few weeks, double-dip risks will rise materially.
Even some of the biggest bears — Steve Roach at 40% odds, Gary Shilling near 50% — have yet to make this a base-case scenario. We wonder about that because 98% of the time, when Household employment contracts three months in a row, we are already in a recession or about to head into one. Who knows? Maybe we’ll be lucky and this will be the other 2% this time around.
Now let us pray.
The JOLTS (Job Opening Labor Turnover Survey) just came out from the Bureau of Labor Statistics and it revealed more adverse news (please don’t shoot the messenger):
• The number of job openings dipped 2k in June after a 363k plunge in May. At 2.937 million, they are at a three-month low and this means that there are five unemployed job seekers vying for every job opening. If that doesn’t continue to exert deflationary pressure on wages, we can only assume that the laws of supply and demand have somehow bypassed the labour market.
• Thenumberofnewhiresplummeted327kinJune,theseconddeclineinthe past three months and the steepest falloff since November 2008. The level has rolled back to a four-month low.
• Finally,layoffs rose 130k on top of a 144k bump-up in May, calling into question the veracity of the Challenger survey. At just a snick over two million in June, the number of pink slips that employers handed out were at their highest level in 11 months.
We take no joy in seeing numbers like these, or the other plethora of economic indicators that have turned south.
Initial jobless claims rose 2k in the August 7th week from an upwardly revised 482k level the week before ...
... On top of that, the JOLTS data just came out and it showed that the number of job openings dipped 2k in June after a huge 363k plunge in May and ...
... the number of new hires plummeted 327k in June, the second decline in the past three months and is now at a four-month low
Just like a meteorologist who hates having to be the bearer of bad news over the looming summer storms that will ruin the weekend beach party, but is at least proud of the fact he/she kept people out of harm’s way (or dry, at the very least). And remember, it wasn’t raining yet when Noah was building the Ark! Well, that’s how we feel. Mixed emotions.
Which then brings up an oldie but a goodie:
Why did God create economists?
To make weathermen feel good about themselves.
