The economy has produced 6 consecutive months of job losses. While lots of people are discussing how "resilient" the economy seems to be, they are missing the bigger picture.
Employment losses are unfolding as they usually do in the part of the business cycle called "Recession."
Contrary to popular belief, this is what early stage contraction employment looks like: Merrill Lynch’s David Rosenberg points put that "the six-month change in payrolls is now running at -438k. This is the same six-month change as June/01 when the economy was three months into the downturn. Go back to the prior recession and in October 1990 that six month change was -327k. That recession started in July."
Why are ppeople so confused about employment? Blame the birth-death model. It didn’t exist in the current format last recession, and is artificially propping up NFP data. Rosenberg estimates that and the true job loss this year could be closer to one million.
Two details re today’s NDP:
First, watch for the number of employees whose full-time jobs are cut down to part time due to general business weakness. Its swelled to more than 3.7 million — the largest figure since the government began tracking such data more than half a century ago.
Second, pay close attention to the revisions. Like yesterday’s anticipated GDP revisions, look for BLS to make a major downward revision to the trailing 12 month NFP today . . .