It seems that Donald Trump is in charge everywhere if you look at the most recent data from the Labor Department: everyone is fired. Today’s report could have gone much differently. It isn’t that the unemployment rate and that the loss of non-farm payrolls in unimportant. But….
Unemployment rose to a whopper of a headline number to 7.2% from 6.7%initially reported in November and the change in non-farm payrolls was524,000 jobs. The November unemployment rate was revised slightlyhigher to 6.8%. Economists were looking for an unemploymentrate of 7.0% and a loss of non-farm payrolls to the tune of about520,000 to 525,000. Many economists and traders were expecting the non-farm payrolls to have dropped by as much as600,000.
Manufacturing, housing, and business services each lost more than100,000 jobs. Retail also saw a drop of 66,000 jobs. Eventemporary jobs fell by over 80,000. Christmas stunk. For 2008, the economy lost 2.6 million jobs. This is the worstunemployment rate in 16 years.
The only good news out there is in healthcare, education, andgovernment. The government added 7,000 jobs and health care andeducation rose 45,000. The problem is this data is not part of what we would consider not being in the real GDP.
The average work week also fell 0.2 hours down to 33.3 hours and hourly earnings rose a nickel to $18.36.
Our own projections for what lies ahead is not at all changed by thedata wed are seeing today. The numbers next month for January shouldlook atrocious as companies accelerate their layoffs. And retail andtemporary workers should look far worse than the already-dismal numbersas retail goes down to a crawl.
Our only real question for what lies ahead is if the 8% handle weexpect by June is being too conservative. We are hearing more forecasts for double-digit unemployment rates into 2010. If that occurs,all bets are off.
Jon C. Ogg
January 9, 2009