Jobs? jobs. jobs!
Posted by Jason Apollo Voss on Sep 6, 2010 in Blog | 11 commentsDepartment of Labor statistics released Friday show that the aggregate U.S. economy shed 54,000 jobs in August. Massively contributing to the negative number were the 114,000 census workers whose temporary jobs went bye-bye. What that means of course is that the private sector added jobs. How else to account for the 60,000 jobs discrepancy? How many jobs were added by business? 67,000!
Analysis: What I find amazing in these statistics is that last month when the jobs number came out I wrote about the fact that the private sector had added jobs then, too. However, equity investors focused on the overall jobs lost. On Friday, however, those trading focused on the same math that I had last month: private sector jobs growth. Go figure.
Yes, it is a good sign that the private sector is continuing to add jobs. However, the economy needs net gains in jobs across sectors if it is to keep its head above water and not dip into recession’s watery depths again. Not only that, but the private sector’s job growth was also lower in August than in July. So this is yet another reason to be mystified by the positive market gains on Friday.
I have said it before and I will reiterate it now: two data points do not make a trend, they make a line. You need three data points at least in order to recognize, at a minimum, a trend. Yes, the last two jobs reports are strongly negative due to census jobs lost, but those people still need new work. That means the economy has to absorb their employment needs at some point. And that isn’t happening right now. In fact, the last two data points for the private sector jobs growth have a negative slope. So the rate of change (first derivative for you calculus geeks) is negative. Not a good sign either. What is badly needed is at least three consecutive months of total jobs growth and where the rate of change is positive, or at least flat.
Importance grade: 10; this remains the single most important data point in the world of investing.
Jason
Fantastic blog! I actually love how it’s easy on my eyes and also the facts are well written. I am wondering how I may be notified whenever a new post has been made. I have subscribed to your rss feed which must do the trick! Have a nice day!
Thank you for taking the time to respond to the post. I’m glad that the blog is useful for you. Spread the word across the pond! Separately, this is my newly re-tooled website so let me ask my web-designer how you can be automatically notified of new posts. Previously the blog was carried by Blogger and you simply subscribed. I will post another reply with the answer. Jason
High quality info here! Keep up the great work. I love the feelings being expressed.
So glad that you approve. J
The time and effort put into this is very moving. This is a very educational blog. Good luck on the next entry you put into it.
Excellent. I am very glad that you find it moving. Hopefully you will be able to continue to digest it so well! Jason
I hope you will keep updating your content constantly as you have one dedicated reader here.
hey great information your site contains will return when I have time to read more.
I really like your blog and i really appreciate the excellent quality content you are posting here for free for your online readers. Can you tell us which blog platform you are using?
Thank you for the sensible critique. Me and my neighbor were just preparing to do some research about this. We got a grab a book from our local library but I think I learned more from this post. I am very glad to see such great information being shared freely out there.
Pretty nice post. I just stumbled upon your blog and wanted to say that I have really enjoyed browsing your blog posts. In any case I’ll be subscribing to your feed and I hope you write again soon!