Here are some economic capsules from that MSM source that slants the news to get dems elected......The Wall St. Journal!!!!!!
January 4, 2008, 11:04 am
Economists React: ‘Looking for a Bunker to Hide in’
Economists and others weigh in on the weaker-than-expected gain in payrolls and the rise in the unemployment rate.
The sharp jump in the unemployment rate — from 4.7% to 5.0% — may be the most alarming feature of this report. Single-month increases that large occur only rarely and most often near business cycle turning points. Indeed, the last time the unemployment rate rose 0.35 in a single month was September 2001. Tellingly, the jobless rate also jumped 0.3% in January of 2001, just before the business cycle peak in March 2001. –David Resler, Nomura Securities
The rise in the unemployment rate is very disturbing. Over the last year, the unemployment rate has risen 0.6% points from its low and since 1949 the unemployment rate has never risen by this magnitude without the economy being in recession (this period covers ten recessions). Other economic indicators such as jobless claims and ISM for December are more consistent with sharp slowdown than with recession, but we now put ourselves on recession watch. –Bear Stearns
This data shows an economy slowing sharply — the first quarter of 2008 is shaping up as a negative quarter for GDP growth — and the risk of recession is rising sharply. At least a [quarter percentage point] rate cut by the Fed on January 30 is a cast-iron certainty, and a [half percentage point] move is now a strong possibility. –Nigel Gault, Global Insight
December’s bleak jobs report represents the siren call that this business cycle is just about over. We’re about to tilt over to the other side of the economic curve and begin the downswing. The only real question now is whether the economy will contract for one or two quarters. One thing is fairly certain, though. The Federal Reserve rate is now compelled to cut rates by a [half percentage point] at their January 29-30th meeting — and they may even move earlier than that! –Bernard Baumohl, Economic Outlook Group
2007’s job gain was only about 60% of 2006’s job growth. And job creation has been even slower in more recent months. Some, but not all, of this softness has been due to the decline in housing and the turmoil in the financial markets. More important, the pace of job creation over the past year will be revised down when benchmark revisions are made in February… The slack in the labor market is growing rapidly and will force the FOMC to act again at the end of the month. –Steven A. Wood, Insight Economics
Has the economy hit a big pothole or careened into the ditch? We are congenitally inclined toward the bright side of things, so not surprisingly, we’d like to lean in that direction. That being said, we are spooked by this week’s data and very open to a much weaker economic scenario. What is keeping us from a wholesale downgrade of our economic forecast right now? Mainly the fact that consumer spending has been holding up surprisingly well. … If consumer spending collapsed in December in line with the ISM and employment readings, then RBSGC would be inclined to carve up our forecasts for 2008 and start over with much weaker growth and extensive Fed easing. –Stephen Stanley, RBS Greenwich Capital
Nearly 70% of the manufacturing industries reduced their workforces. There weren’t a whole lot of job gains in the service sectors. Health care and education, as usual, were strong as well as professional services. On the other hand, retail, transportation, information and financial sectors cut back… Less than one week into the New Year and some may be looking for a bunker to hide in. –Naroff Economic Advisors
The construction category posted its second largest monthly decline since 1992. Moreover, the decline in the nonresidential component nearly matched that of the residential sector — the first sign of some potential spillover of the weakness in housing construction to the commercial sector… Today’s report, combined with the recent trend in claims for unemployment insurance, confirms that the job market is losing momentum. That is critically important because income growth tied to the creation of new jobs has been a key source of support for the household sector of the economy over the past four years. –David Greenlaw, Morgan Stanley
The fact that the composition of the data is in line with the pattern we would have anticipated suggests that this number shows a real deceleration in hiring rather than a statistical quirk. However, next month should show some payback for retail, as less hiring around the holidays typically means less firings in that sector early in the year. –Drew Matus, Lehman Brothers
The gains in services employment away from finance, retail and government were actually rather solid. At the margin, this actually reduces hope for a significant rebound in employment gains in January… The weak December, and better indicators such as unemployment claims, point to a period in which labor markets begin sharing in the pain of the long-building growth slowdown. The rise in the unemployment rate, while perhaps exaggerated on a monthly basis, may easily hurt confidence through news headline effects, and bears watching. To the extent that labor market slack is developing, today’s data will weaken some resistance against action on the part of Fed officials. –Steven Wieting, Citigroup
The rise in unemployment hit blacks and Hispanic workers especially hard, with both groups seeing a rise of 0.6 pp in their unemployment rates to 9.0 percent and 6.3 percent, respectively. There continues to be an unusual age pattern to employment trends. Employment for workers over age 55 rose modestly, while reportedly falling by 436,000 for workers under age 55. While this December decline is probably an anomaly, employment for workers under age 55 has fallen by 625,000 over the last year. –Dean Baker, Center for Economic and Policy Research
Compiled by Phil Izzo
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