Category: zerohedge

The firm that advises its former employee Bill Dudley on how to run the New York Fed, speaks. Goldman’s bottom line: bad jobs report, the weather was at fault (and apparently all those economists who had expectations of a 200K print were unaware it was cold out there until today) but the Fed will still taper by another $10 billion in January.

BOTTOM LINE: The December employment report was broadly weaker than expected, although some of the disappointment was likely due to bad weather. The unemployment rate unexpectedly declined due to a drop in participation.

 

MAIN POINTS:

 

1. Nonfarm payroll employment grew only 74k in December (vs. consensus 197k), the weakest increase since 2011. Colder-than-normal weather likely played some part in the disappointment, as construction employment declined 16k (vs +19k in November) while leisure and hospitality employment grew 9k (vs. +20k in November). However, job growth was weaker across sectors in December, including a particularly sharp slowdown in health and education services (flat vs. +41k in November). Couriers and messengers, a category that has sometimes shown outsized December moves in recent years, fell only 6k. Government employment also subtracted from job gains, as state and local employment declined 11k after stronger growth in recent months.

 

2. The unemployment rate declined by three-tenths to 6.7%, however the drop was largely due to a two-tenths decline in the participation rate to 62.8%. Employment rose 143k according to the household survey, although “payroll-consistent” employment?adjusting for definitional differences between the two surveys?fell by 8k. Also from the household survey, the number of individuals who reported not being at work due to bad weather was 273k, above the December average of 138k, and consistent with a negative weather impact in the report. This estimate, however, is very likely larger than the true weather impact on payroll employment.

 

3. Average hourly earnings rose a smaller-than-expected 0.1% (vs. consensus +0.2%). The average workweek also fell by one-tenth of an hour to 34.4 (vs. consensus 34.5), although the worsening could reflect a temporary weather effect.

 

4. The information in today’s employment situation report does not change our expectation that the Fed will continue to taper its asset purchases by $10bn at the January

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/dBxcPSOxBw4/story01.htm Tyler Durden

The gross manipulation of the unemployment rate due to the plunging labor force participation rate and the soaring, record number of people that are not in the labor force is by now, we hope, clear to all. Yes, millions may be dropping out of the labor force because they can’t find a job which somehow means the US economy is getting better, but sadly the US civilian, non-institutional population keeps rising, and hit a record 246.7 million in December. Which is why every month we show what the real unemployment rate would look like when normalized for the fudged participation rate by taking a 30 year average.

Today, we find that the difference between the reported (6.7%) unemployment rate, and the implied using realistic assumptions for the US labor force, which remained at 11.5% where it has been ever since the start of the Second Great Depression, just hit a record high 4.8%. As did the spin, lies and obfuscation by the administration that “all is well.“

And why 11.5% is precisely where the unemployment rate should be based on the employment to population ratio:

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mcYA8ubOE_U/story01.htm Tyler Durden

While we have been told again and again that there are no asset bubbles – although th emost recent FOMC statement referenced concerns over small-cap mulitples and covenant-lite loan issuance – it seems the Fed’s Jeff Lacker just let slip some ugly truthfulness…Answering questions after a speech proclaiming growth ahead and rising inflation, he said:

• *LACKER RELUCTANT FOR FED TO ‘PRICK’ ASSET-PRICE BUBBLES

Well there it is. There are asset bubbles? But Lacker – who has been anti-QE to some extent – knows that if the Fed moves to actually do anything about it (other than jawbone), it’s all over. Perhaps as more realize the transition from a Bernanke Put to a Yellen Collar has occurred, there will be no need to jawbone any longer.

 

But jawbone on they will as open-mouth operations try to persuade investors that strong forward guidance is just as effective as printing 100s of billions of USDs….

• LACKER SAYS MARKET EXPECTATIONS THAT INTEREST RATES WILL REMAIN LOW MAY
  BE BIGGER DRIVER OF MARKET LIQUIDITY, EQUITY PRICES THAN BOND BUYS

 

Just believe

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/hU1mzBOJBHw/story01.htm Tyler Durden

While we have been told again and again that there are no asset bubbles – although th emost recent FOMC statement referenced concerns over small-cap mulitples and covenant-lite loan issuance – it seems the Fed’s Jeff Lacker just let slip some ugly truthfulness…Answering questions after a speech proclaiming growth ahead and rising inflation, he said:

• *LACKER RELUCTANT FOR FED TO ‘PRICK’ ASSET-PRICE BUBBLES

Well there it is. There are asset bubbles? But Lacker – who has been anti-QE to some extent – knows that if the Fed moves to actually do anything about it (other than jawbone), it’s all over. Perhaps as more realize the transition from a Bernanke Put to a Yellen Collar has occurred, there will be no need to jawbone any longer.

 

But jawbone on they will as open-mouth operations try to persuade investors that strong forward guidance is just as effective as printing 100s of billions of USDs….

• LACKER SAYS MARKET EXPECTATIONS THAT INTEREST RATES WILL REMAIN LOW MAY
  BE BIGGER DRIVER OF MARKET LIQUIDITY, EQUITY PRICES THAN BOND BUYS

 

Just believe

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/hU1mzBOJBHw/story01.htm Tyler Durden

The Fed spent over $1 trillion in 2013 (to push the stock market to all time highs) and all we got was… less jobs created than in 2012?

Establishment survey 2012 vs 2013 job change:

And Household survey 2012 vs 2013 job change:

Source: BLS

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The Fed spent over $1 trillion in 2013 (to push the stock market to all time highs) and all we got was… less jobs created than in 2012?

Establishment survey 2012 vs 2013 job change:

And Household survey 2012 vs 2013 job change:

Source: BLS

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/zDqDBPZb_NM/story01.htm Tyler Durden

As was reported to mass jubilation on Wednesday, the ADP private payrolls number soared to the highest monthly change since November 2012, a 238,000 increase driven by what the report said was a 48,000 increase in construction jobs.  ADP’s Mark Zandi went on the record to say that “The job market ended 2013 on a high note. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring.” It appears not. According to today’s BLS report in December, on a seasonally adjusted basis, the construction industry lost 16K jobs. And where it gets really funny is when one looks at construction on a non-seasonally adjusted basis, construction jobs plummeted by a whopping 216,000! However you cut it someone is obviously lying. If we cared we would ask who. However, since both data series are completely fabricated, who even cares?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZhGAZCr3wSc/story01.htm Tyler Durden

As was reported to mass jubilation on Wednesday, the ADP private payrolls number soared to the highest monthly change since November 2012, a 238,000 increase driven by what the report said was a 48,000 increase in construction jobs.  ADP’s Mark Zandi went on the record to say that “The job market ended 2013 on a high note. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring.” It appears not. According to today’s BLS report in December, on a seasonally adjusted basis, the construction industry lost 16K jobs. And where it gets really funny is when one looks at construction on a non-seasonally adjusted basis, construction jobs plummeted by a whopping 216,000! However you cut it someone is obviously lying. If we cared we would ask who. However, since both data series are completely fabricated, who even cares?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZhGAZCr3wSc/story01.htm Tyler Durden

When this indicator of global trade rises, everything is rosy and reams of asset-gatherers and talking-heads wil quote it as indicative of how great the world is. When it drops – silence. There’s always an excuse – over- or under-capacity, too many ships, too few ships, etc. However, the last 2 weeks have seen a 35% collapse in the cost to ship bulk. There is a relative seasonal pattern over the holiday period – with shipping costs rising into the holiday and falling after but… this is the biggest drop from a Christmas Eve since at least 1984, 30 years! Seems like the inventory stacking of Q4 had absolutely no follow-through whatsoever…

 

All thepost-Thanksgiving exuberance has been eviscerated from the Baltic Dry Index…

 

and some context – this is the worst post-holiday start to the year since at least 1984!!

 

Cramer?

Charts: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/tpGoViVMgKs/story01.htm Tyler Durden

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Ira9N0fUuMM/story01.htm williambanzai7