August Payroll Numbers Terrible

Article Submitted by: Sam Cass
The Economy


The payroll numbers are out and they looked pretty dreadful. Instead of a gain in payrolls, employment actually fell by 4,000, the first time the number has dropped in four years. I took a stand saying the numbers would come in better than expected and was wrong.

 

Submitted: Sep 7, 2007    Views: 233    Comments: 1    Likes: 5   


The payroll numbers are out and they looked pretty dreadful.  Instead of a gain in payrolls, employment actually fell by 4,000, the first time the number has dropped in four years.  I took a stand saying the numbers would come in better than expected and was wrong.

I’ve been pretty bullish on the economy to date and still think the fundamentals are strong, but it’s becoming clearer that the housing slump is going to have more of an impact than I first thought. 

I made a prediction and was wrong. 

This makes it almost certain that the Fed will cut rates.  Now it’s a matter of how much they will cut – 25 or 50 basis points.

 
Read the details of the payroll report on Fortune.




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mk
(Unregistered)

A net loss of 4000 jobs is pretty insignificant in context of the US economy. But what's more important is that the analysts had been predicting a gain of about 100k jobs. Now, certain sectors did show a positive change in hiring but the layoffs in housing and construction related businesses were enough to offset those gains.

In my personal opinion, this data is not conclusive. 4.6% unemployment is still not bad and the economy outside of housing and construction still looks robust. Just recently we had one of the strongest GDP growth. So, what gives?

Posted: Sep 8, 2007



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