With tomorrows NFP possibly breaking the 100k loss for the first time this cycle, I thought it was as good a time as any to revisit one of our favorite charts:
Of the business cycles in the post-war period, the expansions starting in 1961, 1982, 1991, and 2001 have been the longest in duration. The current business expansion has stretched over 26 quarters (possibly 24 quarters if the National Bureau of Economic Research dates the onset of a recession as December 2007).
During this extended period, payrolls have risen only 5.4% from the business cycle trough in the fourth quarter of 2001. Payroll employment has dropped in the first two quarters of 2008.
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Comparing Recession Recovery Cycles
Source: Northern Trust
-100k, yeah that would be nice and factual, but the current add-minner-strashun can’t let that happen, it will probably be +100k, sheesh
Yes, this “expansion” was mainly one of leverage and debt, not employment.
Not to wander off-topic but if we do see a -100,000 number tomorrow for NFP, we may see a re-test of SPX 1234 or even a trip down to SPX 1200. For those who love the banks, it is worth noting that following this rally, the first support for XLF is well below 21 and the significant support level is at XLF 20.
Is anyone else having a hard time believing how the retail stocks are defying gravity?
At this point I don’t think the payroll number will matter.
Nice to have all the “pros” back. Maybe they should have stayed on the beach.
Can you feel the fear?
VT Trader:
If the NFP number doesn’t get them tomorrow, then the mortgage delinquency data probably will.
Yes, it is great to have the “pros” back, I am loving it.
We haven’t seen real fear yet. But we will….
Underlying details portray weaker growth
Claims show an ongoing deterioration in labor markets Initial claims for unemployment benefits rose by 15K to 444K in the week ending August 30th. This was significantly above consensus expectations and a touch higher than our estimates. On a trailing 4-week average basis claims are running at 438K (May 2003 levels), and while down from 446K in mid-August, this marks a jump from 393K at the end of July. Together with the ADP report this morning (which showed a larger decline in employment over the month of August), these numbers support our below consensus call for a 140K M/M decline in tomorrow’s nonfarm payroll report.
Continuing claims ticked higher in the latest week to 3.4M. The BLS continues to note that these data may be overstated, as some state unemployment offices may be mis-counting the state and federal “extended benefits” in these figures. The latest break-outs for those receiving ongoing state-level benefits stand at 1.4M (down from 1.7M in the prior week). For those receiving federal-level benefits, the numbers are now 1.4M (up from 714K in the last week of July when the program essentially began). Altogether, these numbers are large, implying that those unemployed are remaining so for longer and that conditions in the labor market continue to worsen. As such, we expect the unemployment rate to move higher in upcoming months.
Barry, I’m sure you see what Rev just posted? “Pundits, be straight with your readers”. Who do you think he directed that one to? ; )
Palin speaks, market drops.
Coincidence?
Interesting chart.
OK…now that I got that out of the way, it just seems like now would be a great time to tell everyone about my political beliefs…
Hell, reading the comments section, lately, I feel like there’s some new psychological disorder:
Political Tourettes Syndrome: An overriding, irresistable urge to find the political in EVERYTHING—coupled with the irrational belief that the rest of us are actually interested, and that we just cannot wait to read about Doug12321562852’s take on Obama or some guy who call himself “Lampshade” and his take on McCain.
An example of Political Tourette’s Syndrome (PTS):
“Well Barry, I look forward to tomorrow’s NFP report, and anticipate it will show THAT BUSH IS A FREAKING LIAR. MCCAIN SUCKS AND OBAMA IS UNQUALIFIED!!!!!! as well a loss of a lot of jobs.:
Hell Barry, instead of some good chart porn, you should just start posting ink blots. Lord knows what kind of response you’d get:
“What’s up with the ink Barry? Why is it black? Are you trying to say something about Obama?!?!”
Or
“The blot reminds me of…oh yes, how I puked all over my keyboard when I read about Obama’s plans to raise taxes.”
Good night. People with “PTS” actually make the following look quite rational:
CHICAGO – A steady stream of the faithful and the curious, many carrying flowers and candles, have flocked to an expressway underpass for a view of a yellow and white stain on a concrete wall that some believe is an image of the Virgin Mary.
Police have patrolled the emergency turnoff area under the Kennedy Expressway since Monday as hundreds of people have walked down to see the image and the growing memorial of flowers and candles that surround it. Beside the image is an artist’s rendering of the Virgin Mary embracing Pope John Paul II in a pose some see echoed in the stain.
“We believe it’s a miracle,” said one onlooker. “We have faith, and we can see her face.”
I can just hear some of you now:
“I remember that story from a few years back….The fuckers in the Bush Administration set the whole thing up!”
Good Night
Nat Gas is turning… UNG. here we go.
Dan Duncan! Is this just an attempt to gain attention to your favorite write in???? Seriously… don’t blow a fuse, just having a little fun. ;)
I’ve been puzzling over the disconnect between government economic numbers and the reality on the ground. I’ve begun to think that the problem isn’t necessarily the models per se but perhaps the models are not able to cope with data inputs that are outside the the ‘normal’ dynamics from which the models were derived. A very rough analogy would be climate models. They assume the input of the sun adds a certain amount of energy into the system. Then they predict future climate change by adding and subtracting various things like carbon load, aerosol reflectivity, and so forth. But something like a major volcanic eruption creates a global cooling effect. The models can’t account for this cooling without changing the models themselves. But after a few years, the particulates from the volcano are gone from the atmosphere and once again the models or back in more reasonable alignment with reality.
So my thought is that they stresses of the economy are such that they fall outside the conditions for which the models were created. It seems to me that eventually all the numbers have to again make sense, meaning the stresses change to those more suited to the model. So the real question for me is if the number anomalies are temporary and will make more sense in the future, or if there are structural things in the economy that will force a re-evaluation of the models.
Well, I guessed we might be down 500 points this week in this very blog last Friday…
(Barry has the proof)…
This is the same idiocy that Cramer uses about calling bottoms…
I am not the great Carsoni…. My sidekick does not have “mayonaise breath”…(Boy I wish he was still on the tonight show…)
But this is why bear markets are so unpredictable…I was told, quite rightly that the market could be up 500 as well, if Gustav wasn’t as bad as feared….
I hope most people are like me, they see a weak global economy, without any drivers, that can go down if the news is just a little bit more negative than expected…
time to go fishing…
Bruce in Tennessee
Vermont Trader,
I’m watching that same thing now with Nat. Gas. I’m not long UNG but recently sold my oil shorts to build positions in CHK and XTO. Still a great market to trade in.
Everyone needs to keep an “eye” on Ike. The compact hurricanes that have the tightest circulation with a well-defined eye often turn out to be the real destroyers. I am not going to be short energy until this puppy is out of the way.
Today is a slaughter of the innocents. I wonder how people feel about their brand new bank stocks that Cramer talked them into?
Believe no-one (except Barry, of course).
NY Stock Guy — what are you, sexist? Don’t you know Palin is Kudlow’s Goldilocks made flesh? She trotted out the usual Republican flag-draped lies (at least this week’s edition — subject to change without notice!) and the sheep lapped it up. Maybe once Mr. Maverick speaks tonight the market will rally. Won’t surprise me (oversold near term?), and if it does you can bet Kudlow will attribute it to McCain. God we are so screwed.
NY Stock Guy — what are you, sexist? Don’t you know Palin is Kudlow’s Goldilocks made flesh? She trotted out the usual Republican flag-draped lies (at least this week’s edition — subject to change without notice!) and the sheep lapped it up. Maybe once Mr. Maverick speaks tonight the market will rally. Won’t surprise me (oversold near term?), and if it does you can bet Kudlow will attribute it to McCain. God we are so screwed.
NY Stock Guy — what are you, sexist? Don’t you know Palin is Kudlow’s Goldilocks made flesh? She trotted out the usual Republican flag-draped lies (at least this week’s edition — subject to change without notice!) and the sheep lapped it up. Maybe once Mr. Maverick speaks tonight the market will rally. Won’t surprise me (oversold near term?), and if it does you can bet Kudlow will attribute it to McCain. God we are so screwed.
NY Stock Guy — what are you, sexist? Don’t you know Palin is Kudlow’s Goldilocks made flesh? She trotted out the usual Republican flag-draped lies (at least this week’s edition — subject to change without notice!) and the sheep lapped it up. Maybe once Mr. Maverick speaks tonight the market will rally. Won’t surprise me (oversold near term?), and if it does you can bet Kudlow will attribute it to McCain. God we are so screwed.
The jobs data tomorrow is a complete WAG. Should be materially worse than last month, but the birth/death model adjustment is 100K+ positive this month, so who the hell knows. I swear they just make these numbers up now. Almost numb to it. We just have to review all the tortured data released over the past month as recent examples.
Ha ha. No, I’m far from sexist; just making a joke.
And yes, we are totally screwed.
Let’s keep an eye on the B/D adjustment number tomorrow.
My take?
This number will redefine Chaos Theory has we know it. Fact is, I expect it to be so far out the left field that it’ll make Intelligent Design appear like a credible explanation in comparison. (muhahahahaha!)
It’ll also provide an irresistible and sardonic laughter to the loyal readers of this blog.
Can’t wait!
If the graph showed more than three quarters of payroll employment before the troughs, I wonder if that would change the way we view the results following the troughs?