Rationalizations from the Dismal Set



Once again, we go to the overlooked but very worthwhile online WSJ’s round up of dismal scientists:

Friday’s report showing nonfarm-payroll growth of 112,000 in November was well below most economists’ expectations. Here’s what some economists are saying about the data and what they mean for jobs, growth and interest rates.

"Today’s employment report provided a disappointing headline number, especially heading into the holiday season, but it doesn’t change the outlook for a solid New Year. In any event, I think we have to reserve judgment about what this report means for the economy as a whole. It’s weak enough to raise concerns, but not weak enough to prove anything bad."
Bill Cheney, chief economist, John Hancock Financial Services


"Employment gains stalled temporarily after a blowout month in October that was boosted by hurricane cleanups. However, it is too early to be pessimistic. Service jobs, including health care, education, leisure, etc., are continuing to trend up and the labor force jumped 439,000, indicating that the optimism in the labor market is increasing. The recent job picture indicates that the holiday shopping season will be a decent, not a spectacular one."
Sung Won Sohn, executive vice president, Wells Fargo Banks


"The November employment report was once again a study in contrasts, with the payroll survey and household survey showing vastly divergent results. Still, the underlying trend on both fronts continues to suggest modest, if not blockbuster, improvement in the labor market. This implies that the Fed should continue on its rate-hike path on Dec. 14, with a 25-basis-point increase in the fed-funds target to 2.25%."
— David H. Resler, chief economist,
— Parul Jain, deputy chief economist, Nomura Economics Research
Question:  What the hell is a deputy chief economist?)


"Payrolls came in well below expectations in November, and there were significant downward revisions to September and October (totaling 54,000). Also, hours worked and average hourly earnings were disappointing. The only bright spot in the report was the strength in the household survey, which showed a whopping 483,000 rise in employment."
David Greenlaw, managing director, Morgan Stanley


"Nonfarm jobs grew just 112,000 in November, below forecasts, but maybe not as much a surprise as the headline figures suggest. So far in 2004, monthly job growth has been reported as low as 32,000 jobs to 358,000 jobs. Trend-wise, hiring growth exhibits more stability than might be suspected from the monthly swings."
Stephen Gallagher, economist, SG Economic Research


"While weak, it must be understood that the November result follows an October outcome that, even after being revised down, was still well above trend. Hurricanes depressed September payrolls and boosted the October outcome. A better measure of underlying job growth is probably offered by a smoothed reading (three-month moving average), which shows plus-178,000 as of November."
Joshua Shapiro, chief U.S. economist, MFR Inc.

Economists React
Compiled by Mali Fleming
WSJ, December 3, 2004 12:28 p.m.

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What's been said:

Discussions found on the web:
  1. thrashbluegrass commented on Dec 5

    (Question: What the hell is a deputy chief economist?)

    It’s sort of like the assistant to the deputy interim undersecretary.

  2. Milt commented on Dec 6

    How come economist don’t throw out the October jobs numbers when calculating average monthly number and the trends in job creation? If the economists say the Oct data is suspiciously high because of hurricane cleanup jobs, and they cannot tell for certain how aberrantly high, then they shouldn’t use Oct’s 337k data in their monthly average calculations nor in determining the trend. Dismal “science” indeed.

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