Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: nextrade! who wrote (24925)	10/31/2004 5:36:39 AM
From: nextrade!	Read Replies (1) \| Respond to of 306849

US payrolls tell less than half the story October 29, 2004 prudentbear.com With a civilian population that is rising at an annual rate of 2.2m, the US economy has an imperative of job creation. The stark reality is that the labour market is much weaker than 4 years ago. Employment momentum turns down again The financial markets’ obsession with the monthly change in US non-farm payroll employment has made and lost fortunes this year. September’s lacklustre addition of 96,000 jobs was enough of a disappointment to slice 10 basis points off the benchmark 10-year yield, but some releases have brought about swings of more than 20 basis points. With a year of employment gains under its belt, many commentators have projected a long and happy recovery for the labour market. However, quite apart from their erratic monthly variations, the payroll data tell less than half the story about US labour market conditions. The percentage of the civilian population of working age in employment reached 64.7% in April 2000, a record that looks as though it may stand for a generation. The current figure, 62.3%, is a marginal improvement on the lows of 62.1%, but it has taken a monumental effort to halt the slide and this is likely to prove temporary. Moreover, despite the net addition of 113,000 jobs in the past three months, the shocking deterioration in the public finances in recent years has limited the potential for government employment to take up the slack. On past form, an economy with a real growth rate of 4.3% should be capable of generating 250,000 to 300,000 jobs per month. Yet almost half of the average 142,000 monthly job gains over the past year is attributable to the adjustment from the net birth/death model, a device used to simulate the employment effects of net new company formation. One explanation for the discrepancy between expected and actual job creation is the rapid growth of financial intermediation and real estate activities, which score highly in terms of entrepreneurial income and GDP but less so in employment terms. Despite a runaway credit boom, these sectors have contributed only a net 85,000 jobs in the past 12 months. Away from the protective environment of the domestic financial sector, the chill winds of international trade continue to shake down the manufacturing payrolls. While there is no question that the US has some highly successful and profitable industries, there appears to have been a structural deterioration in the export sector. Exchange rate depreciation has been rendered almost impotent as an adjustment mechanism because of the determination of Asian countries to maintain US Dollar parity. In turn, this has prevented the regeneration of export industries and their employment. It is looking less and less likely that market mechanisms will foster a revival in US employment prospects, leaving the unsavoury alternative of controls and tariffs. China’s refusal to countenance a Renminbi revaluation in the near future may well trigger a lurch to protectionism after November’s presidential election. an opposing view; pittsburghlive.com