August Payroll Numbers Terrible

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.

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.

Sam Cass
Sam Cass: Sam Cass, MBA, JD, University of Texas at Austin. Always a fan of Leonardo Da Vinci.

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Comments

  • mk

    September 08, 2007

    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?

  • Kid Charlemagne

    August 31, 2009

    Two years later and it's funny--The bulls are back, and just as misguided as ever. Just because you want something to happen does not mean it will. We need to seek reality, not our hope, particularly if we are published economists (not me, not close). There are huge ramifications to telling people your opinion when they are looking for guidance. If your facts have to be twisted to align with your bias (Bullish or Bearish is a bias away from the summation of the information as it stands) be sure to include that. You will more likely be judged by your accuracy than by your momentary popularity.

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