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Employment numbers for July way below expectations

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Employment numbers for July way below expectations

Old 08-06-04, 09:49 AM
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Employment numbers for July way below expectations

Hiring by U.S. employers slowed significantly in July, according to a government report Friday, as the number of new jobs added to payrolls came in far below Wall Street expectations.

The Labor Department report showed only 32,000 new net jobs added to payrolls during the month, down from a revised 78,000 jobs that were added in June. The increase was the smallest since December, when payrolls rose by just 8,000.

The unemployment rate fell to 5.5 percent, an improvement from the 5.6 percent reading in June.

Economists surveyed by Briefing.com forecast a 243,000 gain in jobs, and the unemployment rate staying unchanged at 5.6 percent. Economists surveyed by Reuters had a median jobs growth forecast of 228,000, with a range of estimates between 200,000 and 300,000.

This is the second straight month of jobs growth far below economists' forecasts, following three months that showed strong jobs growth starting in March. The June report had initially showed 112,000 jobs added, rather the 250,000 forecast at that time. But Friday's report missed the target by even a wider margin.

U.S. stocks opened sharply lower on new concerns about the state of the U.S. economic recovery.

Meanwhile bond prices soared and yields, which move in the opposite direction, fell amid expectations that the Federal Reserve will not raise interest rates as fast as previously expected. The Fed holds its next meeting to consider interest rates Tuesday.

Fed hike on hold?
Several economists said Friday that the report should prompt the Fed to reconsider the widely expected quarter-point increase in interest rates at Tuesday's meeting.

"They would like to raise rates, but right now, keeping rates a little too low would cause the least harm in the economy," said Mark Vitner, senior economist at Wachovia Securities. "If they raise rates after this weak employment report, people will be hollering. George Bush would be hollering the loudest."

Others say they think that even with the number, the Fed might move ahead with the quarter-point hike Tuesday.

"When you have a long road to travel, you don't take too many breaks. You just keep on going," said Anthony Chan, senior economist with JP Morgan Fleming Asset Management. "Yes, this number is weak, and yes, it's disappointing, but there are some rays of hope in here."

The report did show some signs of strength in secondary numbers in the report. Average hourly wages were up 5 cents to $15.70, in line with forecasts, and the average hourly work week rose 0.1 to 33.7 hours, which was just below the forecast of 33.8.

More importantly, the survey of households, used to compute the unemployment rate, showed 629,000 more people at work than in June. The other payroll number is based on a survey of employers. One economist said he believes this suggests problems with the employer survey.

"I don't have any faith that 32,000 jobs added reflects what's going on," said Vitner, who had forecast a 280,000 gain in the payroll number. "The growing disconnect between the surveys is too much to dismiss."

The report shows that retailers had 19,000 fewer employees than a month earlier, while leisure and hospitality employers had 2,000 fewer employees. Vitner said those numbers seem at odds with new store openings and improved hotel rates.

The employer survey showed other sectors with slim growth. Manufacturing jobs were up by 10,000, while construction was up 4,000 and business and professional services added 42,000 jobs.

Vitner said his discussions with clients does suggest that while they aren't seeing a worsening economic condition, they are no longer seeing the growth they were reporting earlier this year.
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Re: bolded section. I wonder what could be causing this?
Old 08-06-04, 09:52 AM
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Re: Employment numbers for July way below expectations

Originally posted by Chew
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Re: bolded section. I wonder what could be causing this?
Duh. It's Bush. Remember McJobs?
Old 08-06-04, 10:04 AM
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i thought the fed doesn't usually mess with rates in the 2nd half of an election year
Old 08-06-04, 10:09 AM
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Of course, the surveys are wrong!
Old 08-06-04, 11:02 AM
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Only 32,000 new jobs created; 250,000+ were expected

Hiring by U.S. employers slowed significantly in July, according to a government report Friday, as the number of new jobs added to payrolls came in far below Wall Street expectations.

The Labor Department report showed only 32,000 new net jobs added to payrolls during the month, down from a revised 78,000 jobs that were added in June. The increase was the smallest since December, when payrolls rose by just 8,000.
--
Economists surveyed by Briefing.com forecast a 243,000 gain in jobs, and the unemployment rate staying unchanged at 5.6 percent. Economists surveyed by Reuters had a median jobs growth forecast of 228,000, with a range of estimates between 200,000 and 300,000.

This is the second straight month of jobs growth far below economists' forecasts, following three months that showed strong jobs growth starting in March. The June report had initially showed 112,000 jobs added, rather the 250,000 forecast at that time.
--
The report did show some signs of strength in secondary numbers in the report. Average hourly wages were up 5 cents to $15.70, in line with forecasts, and the average hourly work week rose 0.1 to 33.7 hours, which was just below the forecast of 33.8.
http://money.cnn.com/2004/08/06/news...ex.htm?cnn=yes
Old 08-06-04, 11:04 AM
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This will go negative next month.
Old 08-06-04, 11:05 AM
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And yet the unemployment rate went from 5.6 to 5.5 percent, which only shows how much BS those numbers actually are.
Old 08-06-04, 11:06 AM
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Better than nothing but that's not too good at all.

However. . .HELP IS ON THE WAY
Old 08-06-04, 11:09 AM
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Originally posted by Otto
And yet the unemployment rate went from 5.6 to 5.5 percent, which only shows how much BS those numbers actually are.
Agreed. Here's a clip from the Yahoo version:

The department said the unemployment rate fell to 5.5 percent last month from 5.6 percent in June, but it warned the figure was drawn from a survey of households, which is a less reliable barometer of month-to-month changes in employment than its larger survey of businesses.
Old 08-06-04, 11:26 AM
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I know this sounds terrible, but this is good news for me. We are building a house and we aren't quite yet in the rate lock territory. Bad news for the US, good news for Demontooth.
Old 08-06-04, 11:29 AM
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Doesn't the unemployment rate only track those getting unemployment? Not counting all the folks that have run out of benefits?
Old 08-06-04, 11:30 AM
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http://www.dvdtalk.com/forum/showthr...hreadid=378723
Old 08-06-04, 11:41 AM
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It's really been odd. The numbers will be low, then they will be fantastic. Other numbers will go the opposite way.

My guess is that it will keep these numbers from meaning anything in the election. Kerry was talking about one of them a few months ago, and then those numbers went through the roof. Probably the best plan is to just say things will be better, and not try to say that this number or that number is bad, because the next month it might bite you in the butt.
Old 08-06-04, 01:21 PM
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Originally posted by Chrisedge
Doesn't the unemployment rate only track those getting unemployment? Not counting all the folks that have run out of benefits?
No. That is not correct.
Old 08-06-04, 01:35 PM
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laid off in July

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