Friday, December 5, 2008

November Jobs Numbers

The Department of Labor announced this morning that the November payrolls were down by more than 530,000. While economists expected job losses to be significant, the reality far exceeded consensus expectations of 320,000.

Reaction to the news (as compiled by the WSJ) was very negative:

History tells that once the labor market weakens as much as it has in the past several months, job-shedding takes on a life of its own and tends to persist for a long while. We expect labor market conditions to be dreadful for many months to come... -- Joshua Shapiro, MFR
This was much worse than was expected and represents wholesale capitulation. The threat of a widespread depression is now real and present. –Peter Morici, University of Maryland
The traditional view is that job losses gradually build, and therefore the sharp break (60% over the expected number) is a terrible sign. But at the risk of being too contrarian, one has to wonder whether in a world of cable news and 24-hour information accessibility, sharp cuts in jobs may get us to a bottom faster. Employers saw the market meltdowns of September and October, and made decisions to act decisively in November, before the holiday season.

Or else welcome to the Great Depression II.

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