NFP = 94,000

Friday, December 07, 2007 | 10:15 AM


source: BLS



BLS data has hit the tape, and its a bit of a yawner. As I write this, Dow and S&P are marginally in the green, Nasdaq and Russell 2000 marginally in the red -- but fading.

The survey was weak enough to allow the Fed to cut, but the 50 basis point slash that so many have been begging for is now likely off the table. According to the Fed Funds Futures, rate cut odds for a 50 bps cut next week have fallen to 28%, vs. 50% as of last week.

The Negatives: This was the fifth sub-100k NFP report over the past 6 months.

Yesterday, we extensively discussed the birth/death model. As we noted, the birth/death model contribution continues to rise as a total percentage of new hires. It was 51k jobs this month, versus 36k back in November '06.  It also measured Construction hires as flat, and Financial hires rising 12k. Those two points confirm our view that the B/D model is continuing to overestimate hiring.

Revisions in September and October figures brought job growth for those two months to 214,000, or 48,000 fewer than the government had estimated a month ago.

A little less than a third of the newly created jobs were Government hires (30k of 94k). This points out a general weakness of the report; It also shows how far off the ADP number were for private sector hiring (and as we noted previously, this was likely a seasonal adjustment issue on ADP’s part).

The Positives: Temp hiring rose for the second consecutive month. Temps are usually a good leading indicator of future hiring and economic activity. 


Bottom line:  The labor market continues to soften, but as the Household survey shows, it still has some life in it yet. The slow motion slow down continues . . .


Employment Situation Summary
Friday, December 7, 2007.


Friday, December 07, 2007 | 10:15 AM | Permalink | Comments (18) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Barry, would you consider wages coming in higher than expected a positive or negative?

Posted by: Josh | Dec 7, 2007 10:58:00 AM

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