03 July 2009

Chart of the Day

Yesterday, US nonfarm payrolls (jobs) decreased by 467,000 in June. The headline came in at -467k compared with -350k consensus and the back revisions were negligible(+8k). The diffusion index fell to 28.6 from 31, which means that nearly three-quarters of the corporate sector is still in the process of shedding jobs. The 4 weeks average is continues it downward slope however. The stock market as well as commodities and energy declined sharply on the news.

Today's chart puts that decline into perspective by comparing job losses during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1954-2006 (dashed blue line). The US have lost a record 9 million full-time jobs this cycle, more than triple the average in the context of a post-WWII recession, with over 2 million pushed onto part-time work. In fact, if this were an average recession/job loss cycle, the number of jobs would have begun to increase three months ago. This confirms the severity of the recession, but do not forget that employment data is a lagging indicator.

Bloomberg: July 03, 2009

Gluskin Sheff: July 02, 2009
Market and data musings - David A. Rosenberg