I dont believe these numbers. Im on Wall street and people are getting laid off left and right. I would have to question how they really come up with the employment numbers.

Not too OT: George Ure's update today quotes a Craigslist ad that will no doubt resonate with many here:

UrbanSurvival | Financial News of the Second Great Depression 

The majority of the employment figure is the birth death model. It's a guess at how many jobs were created and destroyed. You need to wait a few months for the true figure.

Typically when going into recession, the figure is overstated and it's understated when emerging from recession.

I personally think the employment numbers are nothing more than a random guess.

Fed May Cut Rate Below Inflation, Risking Bubbles (Update3) - Bloomberg.com

Jan. 29 (Bloomberg) -- The Federal Reserve may push interest rates below the pace of inflation this year to avert the first simultaneous decline in U.S. household wealth and income since 1974.

The threat of cascading stock and home values and a weakening labor market will spur the Fed to cut its benchmark rate by half a percentage point tomorrow, traders and economists forecast. That would bring the rate to 3 percent, approaching one measure of price increases monitored by the Fed.

The Fed is going to have to keep slashing rates, probably below inflation,'' said Robert Shiller, the Yale University economist who co-founded an index of house prices.We are starting to see a change in consumer psychology.''

So-called negative real interest rates represent an emergency strategy by Chairman Ben S. Bernanke and are fraught with risks. The central bank would be skewing incentives toward spending, away from saving, typically leading to asset booms and busts that have to be dealt with later.

Steve Duncan,

On a related note, TBAC (Treas. Borrowing Advisory Comm) has a release today. They are fumbling around trying to figure out how to cover so many insolvent banks, etc. with a weakened dollar, ballooning deficit and ZIRP (they don't say ZIRP).

HP-778: Report to The Secretary Of TheTreasury from The Treasury Borrowing Advisory Committee Of The Securities Industry And Financial Markets Association

Full of fun info, but I liked -
"During our discussion of this topic, several Committee members noted the growing difficulties surrounding Treasury's cash management function due to the pending lumpiness of future maturities and the quickly changing revenue and expenditure patterns. It was suggested that the Treasury investigate the potential use of longer-dated cash management bills and/or a buy-back program designed specifically to reduce this problem."

Fun times...

I think I know, yah, I know, never ever underestimate the power of the American consumer. Until t a p p e d o u t.

OK As far as the Fed i am going to start doing "anti George" a la Seifeld. I think what should be done and do the opposite. I say hold, no cut wait and see outcome of last weeks rather large emergency cut. That would be logical. So I will do the opposite and say he wants 75 but rest of Board will talk him down to 25 and he will do 50 BPS.

See this all makes sense now.

Joe Klein's conscience writes:
CR:
How could they have that number when the month hasn't even ended yet? Did they say what makes up the number?
Joe Klein's conscience | Homepage | 01.30.08 - 9:59 am | #

The B.L.S. numbers must be in by the last Friday of the month.
i.e. 01/25/2008 in this case

ac,

ROFL.

Cheers,

ac,

"The Long Term is Nigh"

Cheers,

The ADP model is a predictor of BLS numbers. It has been modified to come closer and closer to the BLS number.

If the BLS number is BS, what does that make the ADP number a predictor of?

it's sad ADP used to be a very good indicator

Neal,

BL^2S?

Cheers,

Neal,

Sorry, should be 1/2BL^2S.

Cheers,

Of course this is just the preliminary GDP figure. It will be revised twice, either up or down.

Steve if you were closely following those numbers you should already know that the methodoly of all macro indicators have been changed.

(but the most shameful thing remains the massive revision of private saving rate last summer)

and yes ADP is now a bad copy of BLS payroll

Outsider:

You're right. The "stimilus" of 1% of GDP? HA! Do the numbers, or at least, read the following...

(Gene Sperling, Bloomberg (5/19/07)

(quote)
In December 2005, Greenspan and Kennedy published a new, comprehensive measure of equity withdrawal that went beyond the information provided in the Fed's Flow of Funds data.

Their research showed an amazing development. Between 1995 and the final quarter of 2005, equity withdrawal grew to 8 percent of the economy from 1 percent -- a whopping 800 percent increase. And as of the fourth quarter of 2005, when total MEW had reached its peak, it stood at $1 trillion annualized.

Also revealing was the way the Fed broke down the withdrawal data into three categories: housing turnover (the equity released when a homeowner sells a house and often plows the capital back into a new home) home-equity extraction, and cash-out refinancing.

This breakdown was helpful because it is the latter two categories that are most likely to drive spending. Goldman Sachs termed these two elements ``active MEW.''

On that score as well, the Fed data showed an amazing expansion. In 1995, active MEW had been $37 billion. By the fourth quarter of 2005, it soared to $532 billion annualized, a 14-fold expansion.
(end quote)

This is just ONE segment of the economy that was goosed by real estate--what about all of the jobs, business and transactions that was associated with the real estate inflation? Don't you think those added a few percentage points also?

So all of this fretting about the effectiveness of the 1% solution? Don't waste your time--it's a bucket to bail out the Titanic. There is no way that it will be effective--it's just too small.

Now that the ATM is gone from the houses, they just might have to start dropping money from helicopters to revive the boom years.

Banks all turning green, Benny must have some good stuff in the crack pipe.

Remember: When the cut comes down, don't run out onto the dry sea bed to pick up all of the fish flopping around - move to high ground.

Sir, would you like some fries with that job?

GDP growth of 0.6% GDP, with 0.49% coming from state and local government; yeah, that will be really sustainable!

The end is not near. The end is here.

US economy will push the world into mild recession without losing any jobs that's a kind of achievement

OT -- from Big Picture -- a fellow after the hearts of tj and Misean:

Biggs's Tips for Rich: Expect War, Study Blitz, Mind Markets - Bloomberg.com

There has got to be a catchy name for a well-heeled paranoid/pragmatic survivalist.

Here's what is happening. When you see all these major corporations announcing staff cuts and office closings it's just a ploy to get others to reduce their workforce so they can hire the ones who lost their job. Yeah, that's the ticket!

well-heeled paranoid/pragmatic survivalist = bear (see Man vs. Wild )

for the trade gap to shink you need at list a 6% fed funds or else you'r
just trying to empty out a bath in the abyss

Both ADP and unemployment claims are trending in the same direction in the last few weeks; i.e. jobs are relatively strong. Yet GDP is weak. How to reconcile?

1. Job growth was weak from 2002-2007. There is not much to trim.
2. Because of demographic trends, employers are concerned about finding enough workers in the future and will try hard not to lay off workers. All the small business people (limited survey) I talk to say this.

The key is whether the perception of the downturn is that it will be relatively brief. This is the case now. Obviously if the perception turns and people expect a longer-term downturn, then this may change.

By the way, for those of you that were on yesterday's threads, the escort business is going strong. Don't know if that is a lagging or leading indicator. Now let's keep the diagreements civil and avoid personal attacks.

Best wishes.

Unemployment does not rise immediately after GDP growth sinks near or below zero. It takes a few months before unemployment rate really starts to skyrocket.

Good boom times are quite "old" pretty much everywhere, in most cases at least four years.

Headlines say Fed may cut rates "to avoid recession." Isn't that a bit disingenuous? Many think we are already in a recession. What's all this pollyanna-ish talk of "avoiding" a recession.

"Where once there used to be a nation of builders, inventors, and innovators, there exists now a nation of greenmailers, scammers, leveredged buyout artists, stock manipulators, and other assorted con-artists who believe that the way to wealth is to "Enron" the system."

You hear this all the time on forums (fora?) like these. I'm not sure I really believe it.

Builders? Seems we are suffereing from an excess of that.

Inventors? Well, I've spent a good many years both inventing myself and evaluating other people's inventions. I can assure you that there is no decline in US inventiveness. Check with the USPTO, if you don't believe me. What there has been is a globalization of knowledge and innovation, so that relative to its sole position atop the mountain 50 years ago, the US has to share with others. But the US still leads the pack in both invention, and, especially, in the application of those inventions.

As for speculation, there is nothing new. Just check the land speculation (and outright theft) in colonial and post-revolutionary days, the railroad boom after the Civil War, the Gilded Age and on and on. And you can find similar things in other countries (the French attempt to build the Panama Canal, for example).

It is perhaps human nature to think that one's own era is uniquely good or uniquely bad. Seldom is that true.