Friday, October 08, 2010

Fantastic News: Nonfarm Payrolls Decline by 95,000, Much Weaker than Expected; Involuntary Part-Time Work Soars by 612,000!

Today we have fantastic news from the BLS that the economy shed 95,000 jobs, far weaker than the economists' consensus expectation of a mere 5,000 drop.

Moreover, part-time workers for economic reasons increased by a whopping 612,000 workers, much higher than an recent numbers and also higher than a year ago. The effect of rising part-time work is the effective unemployment rate shot up .4% to 17.1%

Shedding jobs is great news because it seals the fate for Bernanke's Quantitative Easing program that is all but guaranteed to create jobs and drive the stock market higher according to the consensus opinion of Wall Street cheerleaders.

The worse the news, the better off the economy would be. Unfortunately, the official unemployment rate stayed flat at 9.6%. Had it blasted higher to 9.9% or better yet 10.1%, I am sure the stock market wold be up 3% right now.

To recap, the only way the economy can get better is if it gets worse first. So bad news is good news, and good news shows the bad news worked. Thus, all news is good news. Such is the magic of QE.

In case you missed the sarcasm, and think stocks are cheap and QE will blast the market higher until the economy improves, please consider the following missives:

* Sure Thing?!

* Hussman calls for 10-Year S&P 500 Total Return in the Low 5% Area; Thoughts on Risk Management http://globaleconomicanalysis.blogspot. ... total.html

* Lessons Not Learned - No Failure Too Great to Admit It http://globaleconomicanalysis.blogspot. ... e-too.html

* Bernanke says Lawmakers Should Consider Rules on Fiscal Limits; Expect Hissy Fit from Krugman; Bernanke Pisses in the Wind http://globaleconomicanalysis.blogspot. ... sider.html

Employers in U.S. Cut More Jobs Than Forecast

Bloomberg reports Employers in U.S. Cut More Jobs Than Forecast http://noir.bloomberg.com/apps/news?pid ... Ub_Yjz2dJE

The U.S. lost more jobs than forecast in September, reflecting a decline in government payrolls that shows the damage being done by rising budget deficits.

Employers fired 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a 5,000 drop. The unemployment rate held at 9.6 percent.

Private payrolls that exclude government agencies climbed 64,000, less than forecast, underscoring the concern expressed by some Federal Reserve policy makers that the rebound from the worst recession since the 1930s has been too slow and may require easier monetary policy. Unemployment forecast to average at least 9 percent through 2011 may restrain consumer spending, the biggest part of the economy.

The Labor Department today also published its preliminary estimate for the annual benchmark revisions to payrolls that will be issued in February. They showed the economy may have lost an additional 366,000 jobs in the 12 months ended March 2010. The data currently show a 1.7 million drop in employment during that time.

“If we’re only creating jobs at this pace, the unemployment rate is going to go higher,â€