Its been a while since we’ve highlighted the musings of Barron’s Alan Abelson:
"AS INTIMATED, the employment report for December released Friday morning by the Bureau of Labor Statistics was something less than a barn-burner. Instead of the 200,000 additions to payrolls the seers on the Street had anticipated, there were 108,000. That’s rather a bad miss, in our bloodshot view, but it was pretty much shrugged off as a peccadillo by various and sundry commentators (most of whom happened to be among those forecasting 200,000). We’re glad they’re not doing something important like working the registers at a supermarket checkout counter.
Some of the wrong guessers noted that November’s gain had been revised upward to 305,000, from the originally reported 215,000, as if that somehow off- set their woeful December miscalculation. No mention that perhaps November was artificially inflated by a post-Katrina lift. In any case, last month’s job total was, in a word, punk.
Or, as Philippa Dunne and Doug Henwood, the dynamic duo who run the Liscio Report and whose deft dissections of the employment figures we’ve had the pleasure of featuring in this sacred space more than once, put it: The gain of 108,000 jobs "was a disappointment by any standard (and not much larger than the survey’s margin of error)." While, as they point out, private services added 82,000 jobs, "few sectors really stood out as leaders" except for bars and restaurants, "which have been the source of 11% of all the job gains over the last year." That begs for comment, but all that occurs to us is the lugubrious thought that more and more people must feel the need to drown their sorrows, occasioned –who knows? — by an inability to find a better job or the worry of losing the one they have.
Health care once again was a job-generator, accounting for 21,000 payroll additions. Our suspicion is that these mostly are not very high-paying slots, but, in any case, as Philippa and Doug wryly observe, "this sector’s gains are not necessarily good news for the rest of the economy."
Average weekly hours worked slipped 0.1%, and average hourly earnings were up a modest 0.1%. As our perceptive pair observes, "on a yearly basis, earnings gains are still lagging inflation. If the labor market were really as tight as some claim, wouldn’t we be seeing stronger wage gains?"
Unemployment was off a tick, to 4.9%, but that largely reflected a shrinkage of the labor force. Had those labor-force dropouts been added to the unemployed, reckon Philippa and Doug, the unemployment rate would have risen to 5.1%.
All in all, they sum up, "the labor market continues to underperform." Pure and simple.
Well said . . .
The Vulture’s Song
UP AND DOWN WALL STREET
Barron’s, MONDAY, JANUARY 9, 2006