Friday, September 05, 2008
If you think the recent jobs data looks bad now, wait until they do the revisions - the birth death model shows a net creation of almost a million jobs over the last year, many of which are not likely to persist when they begin looking at real data. As it is, year-over-year job growth is now plunging headlong into negative territory.
The Labor Department reported a decline of 84,000 for nonfarm payrolls in August including downward monthly revisions for June (from -51,000 to -100,000) and July (from -51,000 to -60,000).
Also making news was a five year high in the unemployment rate at 6.1 percent.
As usual, job creation in health care and government provided some support to the overall jobs picture with manufacturing and professional and business services leading the way down. Job growth for food services and drinking establishments, a stalwart in recent years, yielded only 2,300 new positions.
It appears that temporary help is being reduced at accelerated rates, employment services payrolls reduced by 54,000 in August and temporary help (a subcategory of employment services) letting go a net 37,000 workers.
Fed funds futures now reportedly indicate a chance of a short-term interest rate cut sometime in in 2009.