Only 74K Jobs Added In December,
Huge Miss to Expectations of 197K
Does anyone would still pay attention to this cast of characters? Here is what the pundits were forecasting ahead of the report.
US Unemployment Rate (Dec) Exp. 7.0% (Low 6.8%, High 7.5%), vs. Prev. 7.0%
- Citigroup 165K
- Barclays 175K
- UBS 185K
- HSBC 191K
- Goldman Sachs 200K
- JP Morgan 215K
- Bank of America 220K
- Deutsche Bank 250K
December nonfarms were revealed at just 74,000 a huge miss to expectations of 197,000 – the biggest miss Since December 2009.
When the number came out, the CNBC panel was dismayed. Mark Zandi’s advice – when faced with yet another example of his ineptly over-optimistic extrapolation “ignore this number – it’s going to go away.”
The “good” news: the unemployment rate plunged to 6.7% from 7.0%…..For all the wrong reasons – the number of people not in the labor force rose to a record 91,808,000.
People Not In Labor Force Soar To Record 91.8 Million;
Participation Rate Plunges To 1978 Levels
Curious why despite the huge miss in payrolls the unemployment rate tumbled from 7.0% to 6.7%? The reason is because in December the civilian labor force did what it usually does in the New Normal: it dropped from 155.3 million to 154.9 million, which means the labor participation rate just dropped to a fresh 35 year low, hitting levels not seen since 1978, at 62.8% down from 63.0%.
Americans not in the labor force exploded higher by 535,000 to a new all time high 91.8 million.
So, Who’s Lying?
As was reported to mass jubilation on Wednesday, the ADP private payrolls number soared to the highest monthly change since November 2012, a 238,000 increase driven by what the report said was a 48,000 increase in construction jobs. ADP’s Mark Zandi went on the record to say that “The job market ended 2013 on a high note. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring.”
It appears not. According to today’s BLS report in December, on a seasonally adjusted basis, the construction industry lost 16K jobs. And where it gets really funny is when one looks at construction on a non-seasonally adjusted basis, construction jobs plummeted by a whopping 216,000! However you cut it someone is obviously lying. However, since both data series are completely fabricated, who even cares?
• source: zerohedge.com
More Than Half Of December Jobs Added Were Temporary
Once again in the case of the December jobs number, the frenzied media and pundits completely ignored the quality of the jobs gained in the last month of December. Or lack thereof. Because as the simple breakdown below shows, of the 74K jobs gained in December, 55%, or 40K were the worst of the lot when it comes to wages or benefits: temporary jobs.
• source: zerohedge.com
Job growth weak, raising questions about Fed move
Job creation stumbled in December, with the economy adding just 74,000 positions even as the Federal Reserve voted to take the first steps in eliminating its stimulus program.
The unemployment rate dropped to 6.7 percent, below economist estimates and due primarily to continued shrinkage in the labor force. The labor force participation rate tumbled to 62.8 percent, its worst level since January 1978.
The monthly job creation was the worst in nearly three years and well below the upwardly revised 241,000 in November.
Economists had expected the economy to add 200,000 jobs in December, with the unemployment rate holding steady at 7.0 percent.
A broader measure of unemployment that includes discouraged and underemployed workers held steady at 13.1 percent.
Consensus seemed to get around a theory that some rough December weather dampened hiring.
Those not at work due to bad weather numbered 273,000 for the month, some 92,000 above the five-year average, analysts at Strategas said in a report. Even adding those workers in, though, leaves the number well below consensus.
One other notable condition: The reference point for the report was the week ended Dec. 12, which showed jobless claims spiking to 380,000. Claims have declined since then and the week was written off to “seasonal distortions” that likely worked their way into Friday’s report, Bespoke Investment Group said in a note.
• source: CNBC.com
Unemployment aid: What’s at stake for US economy
More than a million Americans lost their unemployment benefits late last month, when a temporary federal program expired. Congress is debating whether to restore the aid for three more months.
A bill to do so cleared a key procedural hurdle in the Senate on Tuesday. But final passage remains unclear. Democrats say extending the aid would boost hiring and economic growth. But many Republicans say the benefits discourage the unemployed from seeking work and would widen the federal budget gap.
Nearly 1.4 million Americans who have been unemployed for more than six months. No longer can people continue to receive checks longer than that. Hundreds of thousands of others will lose their benefits in coming weeks, when they, too, will max out on the six months of unemployment benefits that most states provide.
Starting at the end of 2008, it gave unemployment payments to people who had exhausted their state benefits. In some cases, people were able to collect aid for nearly two years.
Mainly because the job market has remained weak even though the Great Recession officially ended more than 4 1/2 years ago. Many Americans have been unemployed for well beyond six months. More than 5 million jobs were shed in 2009 alone. But of the 10.3 million people who are still unemployed, nearly half have been without a job for more than six months, according to the Labor Department.
• source: CNBC.com/AP
Loss of jobless aid leaves many with bleak options
A cutoff of benefits for the long-term unemployed has left more than 1.3 million Americans with a stressful decision:
Without their unemployment checks, many will abandon what had been a futile search and will no longer look for a job – an exodus that could dwarf the 347,000 Americans who stopped seeking work in December. Beneficiaries have been required to look for work to receive unemployment checks.
Unemployment benefits were extended as a federal emergency move during the 2008 financial crisis at a time of rising unemployment. The benefits have gone to millions who had exhausted their regular state unemployment checks, typically after six months. Last month, the extended-benefits program was allowed to expire, a casualty of deficit-minded lawmakers who argue that the government can’t afford to fund it indefinitely and that unemployment benefits do little to put people back to work.
One sign of the persistently tight job market: The percentage of Americans either working or looking for work has reached its lowest monthly level in nearly 36 years, the Labor Department said Friday. The unemployment rate fell in December to 6.7 percent from 7 percent. But that drop occurred mainly because more Americans stopped looking for jobs, many of them out of frustration. Once people without jobs stop looking for one, the government no longer counts them as unemployed.
But the fundamental problem goes beyond unemployment aid: A shortage of decent-paying jobs for those still coping with the aftermath of the Great Recession.
• read the full story : APnews.com
El-Erian to Bloomberg TV: Jobs Data Between Puzzling and Worrisome
Betty Liu asksEl-Erian (as should everyone):
“Should we just abandon this jobless rate, it is increasingly less and less accurate and reflective of what’s really going on in the jobs market?”
• source: Hedgeaccordingly.ly
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