HSBC on the Labor Report

January 9th, 2009 10:24 am | by John Jansen |

* The unemployment rate jumped higher in December, rising to 7.2% (consensus 7.0%) from 6.8% in November (Nov upwardly revised from 6.7%). Nonfarm payrolls in December matched expectations at -524k (consensus -525k), but there were net revisions of -154k to the previous two months. Hourly earnings rose 0.3%.
* The unemployment rate increase (7.192% from 6.775% unrounded) was driven by a massive 806k decline in the household measure of employment. The labor force fell 173k, as the participation rate dropped to 65.7% from 65.8%, the lowest in over a year. The rise in unemployment therefore can not be blamed by a surge in recent job seekers
* However, the total pool of available labor (which also includes marginally attached workers who have searched for work in the past 12 months but not the past 4 weeks) rose by 583k. On this basis,the augumented unemployment rate rose to 10.4% from 9.9% in November
* Meanwhile, the number of persons forced to take part-time work due to economic reasons rose 715k up to 8.048mn, 72% higher from a year ago. In other words, this report shows a consistent picture of labor force weakness in a wide variety of metrics
* The payroll diffusion index fell to 25.4 from 27.2, showing industry cutbacks remain broad-based. There are no major surprises in the category mix, with big payroll declines in constructions -100k, manufacturing -149k, and retail -66k, and temp help -81k
* Aggregate hours worked fell 1.1%. The biggest drop was in autos (-4.3%), where end-of-year production stoppages started earlier than usual in December. But the decline in hours was also across the board in overall manufacturing (-2.4%) as well as in services. Industrial production is likely to decline accordingly next in next week’s release, mititgated only by a recovery from the Boeing strike————————————————————

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  1. 2 Responses to “HSBC on the Labor Report”

  2. By Alex on Jan 9, 2009 | Reply

    November wholesale inventory-to-sales ratio has climbed to 1.25 from 1.16 in October.

  3. By Dave in SV on Jan 9, 2009 | Reply

    FYI: a great chart of part time unemployed can be found over at the calculated risk blog. It’s rate of ascent is astounding (to me at least.)

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