Alan Abelson on the Employment Figures
Barrons - Oct 4
NO QUESTION, the September employment report, released on Friday, was a happy contrast to the dismal dispatches on jobs that have come down the pike month after month this year with doleful predictability. There were any number of things to like in it, most of all, of course, that 57,000 new jobs were created last month.
Heartening, too, was the revision of August's payroll contraction. Originally tallied at 93,000, the new count put the drop at 41,000, punk but not, in other words, horrendous (except, we guess, if you happen to be one of the 41,000).
The numbers, which caught the seers looking the wrong way (they anticipated 20,000-25,000 fewer jobs), were greeted with cries of "the tide has turned" by the usual cheerful criers on Wall Street. The market, already off to a flying start in October thanks to a big leap upward earlier in the week, staged a spanking good rally in the final session.
And just for icing on the cake, the unemployment rate-which is the stuff that civilians especially react to-held steady at 6.1%.
Upbeat as it was-and what a pleasure to see payrolls increase instead of shrink!-the report wasn't, alas, an unalloyed plus. For one thing, the beleaguered manufacturing sector took another blow, albeit a softer one, with 29,000 jobs vanishing, keeping alive a losing streak that stretches back some three-years plus. Moreover, a formidable 1.5 million souls couldn't find a job at any point in the past 12 months, but weren't counted among the unemployed because they hadn't bothered to look for work in the four weeks preceding the survey.
Then, too, of the 66,000 bulge in service jobs, half were temps. Economists are quick to hail a pickup in temp hiring as a harbinger of an enduring rise in steady employment. That may have been true in the past; we're not so sure it holds today, if only because the post-bubble economy is not your father's typical post-recession economy. Conditions are very different and so are employer attitudes.
For whatever reason, it's pretty apparent that the people who make the ultimate decision on hiring do not in the main seem overly confident of the underpinnings of the recovery or noticeably ebullient about its prospects. That is strongly evidenced by the astounding gusto with which corporate executives and directors continue to unload their own stock.
On this score, Charles Biderman, in his latest Trim Tabs commentary, estimates that, on a preliminary basis, in the most recent stretch for which data are available, the week ended Sept. 25, insiders dumped a cool $3.6 billion of their holdings.
The bottom line on the outlook for a major rebound in employment is that whether it's people or inventories or capital investment, companies would much rather make do than make commitments, and there's no sign that's about to change.
And, worth remembering, too, is that a heap of those job losses we've suffered the past few years have migrated to faraway places where the peons aren't paid too much and environmental controls are conspicuous by their absence; they're likely gone for good.
In critiquing the September employment figures, another Merrill economist, David Rosenberg, points out that the number of folks working part-time last month because they couldn't find full-time jobs shot up 11%. That the September dip in average hourly earnings was the first such decline in more than 14 years. And that, when all is said and done, even after the uptick last month, a total of 222,000 jobs have been lost since the spring.
In sum, September's gains were good but not great. And as to heralding a turn of the employment tide, much less the start of a wave of new jobs, we suggest the old Scottish verdict of "not proved" is neatly applicable in this instance. |
