Unemployment Rises To 26 Year High
Published October 2nd, 2009 in Economy Tags: ADS index, Aruoba Diebold Scotti business conditions, economy, nonfarm payroll, unemployment.This morning the Labor Department issued its report on employment conditions for September. The consensus estimate among analysts was -170,000 but the data came in at -263,000. This was worse than last month’s 216,000 job losses and even worse than most pessimistic estimates.
Here’s a long term chart of the nonfarm payroll data going back to the 1960’s:
TrimTabs had the lowest estimate at -358,000. They based this on the continuing decline in income and employment taxes withheld from paychecks. As well the TrimTabs Online Job Postings Index continues to be flat.
The weakness in the economy is reflected in the real-time Aruoba-Diebold-Scotti business conditions index which we looked at yesterday. The most recent data shows an adjustment downwards, taking the ADS index to -0.927 (from around -0.20).
The trend is once again down, which implies a contracting economy. This wouldn’t be a big deal had the ADS first spiked above zero as it has many times before recovering from a negative economic shock. But we didn’t see that this time as the ADS was barely able to return to zero before falling back into the negative.
ADS index, Aruoba Diebold Scotti business conditions, economy, nonfarm payroll, unemployment
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2 Responses to “Unemployment Rises To 26 Year High”
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An ADS value below zero does not strictly imply a “contracting” economy, at least according to the creators of the index. “The average value of the index is zero. Progressively bigger positive values indicated progressively better-than-average conditions, whereas progressively more negative values indicate worse-than-average conditions”. What the right threshold might be to make it coincide with the official end of the recession or positive GDP growth remains to be seen, however.
This is pretty scary stuff… so in order to go back to the “regression line”, we need like a pretty big spike on job front… so where we going to get that? I’m sure we are still exporting jobs plus laying people off too! Unless regression line start to flatting out and head down?! Or maybe Obama can have everyone build extra roads around the country?
AGain, America is doomed…