More snippets:
We take devilish delight in picking apart government economic statistics, especially the employment report and CPI. But an astute and long-time friend, Lacy Hunt, chief economist and strategist at Van Hoisington Management, denied us that labor but saved us much work.
After the employment report was issued, Mr. Hunt called to tell us that as bad the report looked on release, the details show it’s even worse. (This has been the case as we keep preaching.) Including the lower January and December revision, 2,000 jobs have been lost the past three months. The 21k gain is attributed to government and education. 30k temporary jobs were created, which means 30k permanent jobs were lost. 588,000 workers (392k civilian) left the labor force – that how the BLS kept the 5.6% rate unchanged…Lacy says the most disturbing part of the report is ‘the index of aggregate hours worked’, the broadest measure of employment, rose only 1% annualized for January and February combined. This is a dramatic deceleration from an already meager 1.9% in Q4.
The BLS reports, "Over the year, average hourly earnings increased 1.6%." Lacy notes that this is a historic deceleration of wages. Something similar occurred in 1986, but that was the year that energy states imploded as oil fell below $10 in April. CPI was -0.5% for the year and there were back-to-back quarters of negative CPI. The 1986 decline was a region event. Now, it’s a national problem.
The BLS guesses that 72,000 self-employed or new business jobs were created in February. That’s the number listed under the ‘business birth/death rate’. For all the jamokes that insist that the payroll data doesn’t account for such, there’s the number. Lacy notes that for the second half of ’03, BLS overstated these jobs (revised lower after more detailed research) by 42,000. More on pages 2 & 3
Mr. Hunt notes the 65.9% labor force participation rate is the lowest since 1988 and it corresponds to a 7.4% unemployment rate…PS – Lacy says tax rebates in February were higher than forecast, which means the expected stimulus is occurring earlier than expected. It will be exhausted in two months…. |
