Only 32,000 Jobs Are Added in July

[mc mark]

By JEANNINE AVERSA, Associated Press Writer

WASHINGTON - The nation's payroll growth slowed dramatically in July with a paltry 32,000 jobs being added_ a potentially troubling sign that the rough patch the economy hit in June was no aberration.

The unemployment rate, however, dipped down a notch to 5.5 percent last month, from 5.6 percent in June, the Labor Department (news - web sites) reported Friday. The new jobless rate was the lowest since October 2001.

The payrolls figure and the unemployment rate can sometimes go in different directions because they are derived from two separate statistical surveys.

Economists, however, look more closely at the payroll figure as a better barometer of the health of the jobs market. The 32,000 net jobs added in July represented the smallest gain in hiring since December and followed a revised gain of just 78,000 in June, even less than previously reported. May's payrolls also were revised down to show a gain of 208,000.

Analysts were expecting the economy to add anywhere from 215,000 to 247,000 jobs in July. They were predicting the jobless rate to hold steady at 5.6 percent.

Since Bush took office in January 2001, the economy has lost a net 1.1 million jobs.

http://story.news.yahoo.com/news?tmpl=story&u=/ap/20040806/ap_on_bi_go_ec_fi/economy&cid=668&ncid=716

[andymoon]

Yeah, but according to the GOP, the economy is ROARING.

:rolleyes:

[RocketMan Tex]

32,000 jobs. And all of them are either in the military or at a fast food restaurant near you! WOOHOO!:rolleyes:

[Cohen]

As I mentioned in another thread, the best track-record investment letters are long on a short fund. This does not bode well.

Let's see, we have substantial stimulus in the form of tax cuts and increased military spending, yet could anyone claim this is a strong recovery? There are question now whether the recovery will continue at all.

[Faos]

The unemployment rate, however, dipped down a notch to 5.5 percent last month, from 5.6 percent in June, the Labor Department (news - web sites) reported Friday. The new jobless rate was the lowest since October 2001.



Sounds like good news to me. Thanks for posting!

[ivanyy2000]

I get a feeling that terror alert level will be risen from yellow to orange very soon. Ridge, time to work.

[andymoon]

Originally posted by RocketMan Tex
32,000 jobs. And all of them are either in the military or at a fast food restaurant near you! WOOHOO!:rolleyes:

And, we need to add about 150,000 jobs just to keep up with additions to the employment pool. Guess we are 118,000 jobs in the red in July.

[andymoon]

Originally posted by Faos
Sounds like good news to me. Thanks for posting!

You do realize that this is due to people ceasing their search for work, right? It is interesting that you think that people who get disgusted with the economy and give up their search for a job is good news.

[Fatty FatBastard]

The Government and the economy are not mutually exclusive.

If they were, every politician in the history of the U.S. would manipulate it to where there was zero unemployment, jobs all paid twice as much the same year, etc.

This would go on until the facade was not able to stand on its own anymore, and everything would go to shinola.

[whag00]

Originally posted by Faos
Sounds like good news to me. Thanks for posting!

hahaha

I love the spin. That number just shows that more people have quit looking for jobs...

[RocketMan Tex]

Originally posted by Fatty FatBastard
The Government and the economy are not mutually exclusive.

If they were, every politician in the history of the U.S. would manipulate it to where there was zero unemployment, jobs all paid twice as much the same year, etc.

This would go on until the facade was not able to stand on its own anymore, and everything would go to shinola.

Did you mean to say that the Government and the Economy are mutually exclusive?

Just wondering....

[SamFisher]

Originally posted by RocketMan Tex
Did you mean to say that the Government and the Economy are mutually exclusive?

Just wondering....

Shhh, leave Fatty Keynes alone...

[Cohen]

Originally posted by Faos
Sounds like good news to me. Thanks for posting!

Sorry to burst your bubble.

Economists were expecting 235,000.

[SamFisher]

Originally posted by Cohen
Sorry to burst your bubble.

Economists were expecting 235,000.

Hence my mutual funds took a massive nosedive this morning...damn! :(


Anyway, if the economy stumbles as badlly as it could under a worst case scenario, I think that would be the final nail for GWB


http://biz.yahoo.com/cbsm-top/040806/8deda39e5b4a425cf13087feede587a2_1.html

U.S. stocks slide after jobs shock
Friday August 6, 10:23 am ET
By Susan Lerner


NEW YORK (CBS.MW) - Stocks tumbled while bonds and gold surged Friday morning after the Labor Department shocked Wall Street with a July jobs report that showed growth far below expectations.
The Dow Jones Industrial Average (^DJI - News) bounced from a early triple-digit decline but remained sharply lower, down 70 points, or 0.7 percent, to 9,893, while the Nasdaq Composite Index plunged below 1,800 for the first time since October.

ADVERTISEMENT


The Nasdaq (NasdaqSC:^IXIC - News) was last down 20 points, or 1.1 percent, to 1,801, moving off a low of 1,793. The S&P 500 (CBOE:^SPX - News) skidded 8 points, or 0.7 percent, to 1,072.

The Labor Department reported that the U.S. economy added 32,000 nonfarm payroll jobs in July, nowhere near the 235,000 jobs economists had expected would be added. Payroll growth in May and June was revised lower by a cumulative 61,000, as well. The unemployment rate fell to 5.5 percent from 5.6 percent. See Economic Report.

"This was the report for the month. This is what everybody had pinned their hopes on to really stabilize the market so to have this kicked out from underneath us really creates some serious issues," said Paul Mendelsohn, chief investment strategist at Windham Financial Services.

Having taken out all critical support points in the major indexes, Mendelsohn said things could "get really nasty" from this point on.

"This is a disaster shaping up in here," he said.

Mendelsohn thinks economists just don't realize how quickly the economy is slowing and how little demand there is to hire employees with the uncertainty that still exists.

The positive out of the report, he said, was the resultant rally in bonds as market participants begin to realize the Fed rate increase they were planning on for September "is probably off the table at this point."

The benchmark 10-year note jumped 1 16/32 to 104 7/32 to yield 4.21 percent, down from 4.40 percent at Thursday's finish.

The U.S. dollar sank after the data. The dollar was 1.2 percent off against the yen, at 110.41 yen, and lost 1.6 percent of its value against the euro, with the common European currency trading at $1.2230. See Currencies.

Gold futures rocketed to a two-week high following the data. December gold was up $7.30 to $402.10 an ounce on the New York Mercantile Exchange. See Metals Stocks.

Crude, meanwhile, set more new highs overnight rising to an all-time of $44.77 a barrel. Crude futures were last down 5 cents a $44.36. See Futures Movers.

All but a handful of Dow components were moving lower, led by declines in Home Depot (NYSE:HD - News) , Honeywell (NYSE:HON - News) , Intel (NasdaqNM:INTC - News) , McDonald's (NYSE:MCD - News) and Hewlett-Packard (NYSE:HPQ - News) . Only Altria (NYSE:MO - News) , Microsoft (NasdaqNM:MSFT - News) , Verizon (NYSE:VZ - News) , American Express (NYSE:AXP - News) and JPMorgan Chase (NYSE:JPM - News) were managing gains.

In the broader market, decliners were outnumbering advancers 17 to 13 on the New York Stock Exchange and 4-1 on the Nasdaq. Big Board volume topped 300 million shares while more than 400 million shares traded on the Nasdaq.

By sector, airlines, Internet, hardware, semiconductors, and biotechnology were among the biggest losers. Gold, banks, real estate and utilities were moving higher.

Merrill Lynch named utilities its "favorite" sector and said it should be "significantly overweighted."

Among the reasons cited for the call was the sector's under-ownership by mutual funds, high short interest, dividend yield and a historical tendency to outperform when the profits cycle deteriorates.

The PHLX Utility Index (Philadelphia:^UTY - News) rose 0.9 percent.

Focus stocks
Graphics chipmaker Nvidia (NasdaqNM:NVDA - News) plunged 32 percent in early trade after a miss on second-quarter targets by a wide margin. The company said it earned 3 cents a share on sales of $456.1 million in the period, well below the 15 cents a share earnings and $501 million in revenue expected by analysts.

MCI (NasdaqNM:MCIP - News) , however, got a boost after posting a narrower than expected second-quarter loss and saying it would begin to pay a quarterly dividend of 40 cents a share. Lehman Bros. and Credit Suisse First Boston upgraded the stock. MCI shares jumped 17 percent.

[Fatty FatBastard]

Originally posted by SamFisher
Shhh, leave Fatty Keynes alone...

That is actually funny. Kudos.

RM Tex, yes, I meant that. Sorry.:p

[RocketMan Tex]

Originally posted by Fatty FatBastard
That is actually funny. Kudos.

RM Tex, yes, I meant that. Sorry.:p

No problemo. I just wanted to make sure.

Hey.....not to derail this thread, but.....isn't it about time for another BBS drunken get-together somewhere?

I was actually thinking about this while I was shaving this morning.

Yeah I know...GET A FRIGGING LIFE!!!!

[Rocketman95]

Jobs will rise next month as new escorts will be needed in NYC. Good job RNC!!!

[Fatty FatBastard]

Originally posted by RocketMan Tex
No problemo. I just wanted to make sure.

Hey.....not to derail this thread, but.....isn't it about time for another BBS drunken get-together somewhere?

I was actually thinking about this while I was shaving this morning.

Yeah I know...GET A FRIGGING LIFE!!!!

RM Tex: this won't be a get together, but I'm going with some friends to the Men's club after work.....:)

[Rocketman95]

RMTex, I'm down. I'd rather it not be at a strip club, though.

[giddyup]

Originally posted by SamFisher
Anyway, if the economy stumbles as badlly as it could under a worst case scenario, I think that would be the final nail for GWB
And what could make that happen any more certainly than a successful terrorist attack. Better keep your eyes open between now and November.

[RocketMan Tex]

Originally posted by Fatty FatBastard
RM Tex: this won't be a get together, but I'm going with some friends to the Men's club after work.....:)

I've got a date tonight, so can't do it, thanks for the offer, but I will start a thread in the "non monkey poo flinging" section of the BBS to try to plan something for the weekend of the 21st or 28th.

[Fatty FatBastard]

Originally posted by RocketMan Tex
I've got a date tonight, so can't do it, thanks for the offer, but I will start a thread in the "non monkey poo flinging" section of the BBS to try to plan something for the weekend of the 21st or 28th.

Cool, will extend the offer.

And RM, I wasn't suggesting a get together there. RM Tex had stated he liked the idea earlier, so I asked him...

No harm, no foul.:)

[Fatty FatBastard]

Sorry, by RM, I meant RM95.

i guess you have to be more specific when you're referencing two Rocketmen.

But I think its going to be a long, long time before I figure that out.:p

[glynch]

Let's see, we have substantial stimulus in the form of tax cuts and increased military spending, yet could anyone claim this is a strong recovery? There are question now whether the recovery will continue at all.

Combine that with practically zero real interest rates and you wonder whether it could be quite a while till things improve too much. What more can the Fed do? How do you account for the big stock run up last yea? Just a correction from an overreaction to the downside? :confused:

[giddyup]

I have a friend who works in the trucking industry. His company builds truck bodies that are purchased by the leasing companies.

He says that his industry is VERY sensitive to the economic outlook. He further says that his industry is BOOMING.

------------------

Also, I heard an analysis of this figure. It is based on a small institutional sample and then extrapolated. I don't believe that too many military outfits or fastfood joints are part of that survey.

[SamFisher]

Originally posted by giddyup
I have a friend who works in the trucking industry. His company builds truck bodies that are purchased by the leasing companies.

He says that his industry is VERY sensitive to the economic outlook. He further says that his industry is BOOMING.

------------------

Also, I heard an analysis of this figure. It is based on a small institutional sample and then extrapolated. I don't believe that too many military outfits or fastfood joints are part of that survey.

Your friend who builds truck bodies is right, the markets are wrong.

[giddyup]

Originally posted by SamFisher
Your friend who builds truck bodies is right, the markets are wrong.
Try and shelve your sarcasm for a few minutes and consider what he reports. Are you disagreeing with his assessment. He is a regional sales manager for the southeastern US; he is not the builder of the truck bodies.

[mc mark]

Originally posted by giddyup
Try and shelve your sarcasm for a few minutes and consider what he reports. Are you disagreeing with his assessment. He is a regional sales manager for the southeastern US; he is not the builder of the truck bodies.

hum...

Manufacturers added a meager 10,000 workers in July, after cutting a revised 1,000 from their payrolls in June. The department noted a loss of 21,000 jobs in the transport equipment industry, which it pinned on larger-than-usual retooling shutdowns at auto plants.

Construction firms added just 4,000 new workers.

The service side of the economy showed weakness as well, creating only 14,000 new jobs. Employment at financial firms plummeted, with big losses at mortgage brokers that some economists said could be tied to rising interest rates.

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=1&u=/nm/20040806/bs_nm/economy_dc

[SamFisher]

Originally posted by giddyup
Try and shelve your sarcasm for a few minutes and consider what he reports. Are you disagreeing with his assessment. He is a regional sales manager for the southeastern US; he is not the builder of the truck bodies.

Your friend who regionally sells truck bodies to the southeastern US is right; the markets are wrong.

On the other front: how stupid does Greenspan look if this turns into a long stall? Does this mean we can finally get rid of his overrated ass?

[Rocketman95]

Originally posted by giddyup
Try and shelve your sarcasm for a few minutes and consider what he reports. Are you disagreeing with his assessment. He is a regional sales manager for the southeastern US; he is not the builder of the truck bodies.

You're exactly right. We'll go with your friend over the market.

[robbie380]

Originally posted by SamFisher
Hence my mutual funds took a massive nosedive this morning...damn! :(


and i made money off it ;-)

but the funds will be back...dont worry. people are just freaking out. but the big selloff might not come till next week.

[mc mark]

Originally posted by robbie380
and i made money off it ;-)

Now that's the American way!

Burn Baby! Burn!

[giddyup]

Originally posted by Rocketman95
You're exactly right. We'll go with your friend over the market.
Are you denying that there are not other forces in play as regards the market's short-term response?

[giddyup]

Originally posted by SamFisher
Your friend who regionally sells truck bodies to the southeastern US is right; the markets are wrong.

On the other front: how stupid does Greenspan look if this turns into a long stall? Does this mean we can finally get rid of his overrated ass?
Wait a minute... does this mean that you weren't being sarcastic with me? If so, I apologize for wrongly accusing you.

BRB, I'm going to pour some brandy in my coffee.

[Fatty FatBastard]

Originally posted by mc mark
Now that's the American way!

Burn Baby! Burn!

Riiiigggghhhhtttt.

Just short leap the market until we get a democrat in the office.

Sheesh.

[TL]

Originally posted by giddyup
I have a friend who works in the trucking industry. His company builds truck bodies that are purchased by the leasing companies.


Your friend's experience actually isn't an anomaly. The trucking industry is booming and has been doing well for a while now, especially trucking companies that are dependent on the steel industry. However, from the company that I worked with a few months ago and the experience of a colleague who worked on a company in a similar industry, companies who do trucking are experiencing strength due to some strange factors such as coke shortages and artificially high auto production volumes.

His company, and that industry in general, are likely experiencing strength that is not necessarily reflective of the economy as a whole.

mc mark - wrt to the loss of transportation jobs in july, over the last couple years, it has been a trend for auto shutdowns to last longer than "usual". production volumes have been at record levels, but while demand has been high overall, it hasn't kept up with production levels. the union dynamics of the screwed up auto industry forces the big3 to keep making vehicles even if people don't want them. as a result, over the last two years, the july shutdowns have been extended beyond the typical two weeks in order to help rightsize inventories. that job loss will correct itself by the end of september.

[mc mark]

Originally posted by TL

mc mark - wrt to the loss of transportation jobs in july, over the last couple years, it has been a trend for auto shutdowns to last longer than "usual". production volumes have been at record levels, but while demand has been high overall, it hasn't kept up with production levels. the union dynamics of the screwed up auto industry forces the big3 to keep making vehicles even if people don't want them. as a result, over the last two years, the july shutdowns have been extended beyond the typical two weeks in order to help rightsize inventories. that job loss will correct itself by the end of september.

thanks TL

I hope you're right. It just looks mighty grim...

[TL]

Originally posted by mc mark
thanks TL

I hope you're right. It just looks mighty grim...

A few excerpts from an article in today's WSJ:

http://online.wsj.com/article/0,,SB109179497976284946,00.html?mod=economy%5Flead%5Fstory%5Flsc

"There was one bright spot: the separate survey of households used to calculate the unemployment rate showed a much more optimistic picture, with employment up 629,000 in July from June.

Most economists and Federal Reserve Chairman Alan Greenspan, however, consider the payroll survey a more reliable indicator of job growth...

...Details of the report suggest flagging consumer spending has affected hiring. Payrolls fell by 19,000 at retailers and by 4,600 at hotels. Even gasoline stations trimmed payrolls by 2,600, or 0.3%. By contrast, more business-oriented sectors improved: professional and business service employment rose 42,000. Meanwhile, manufacturing eked out a 10,000 gain in jobs, suggesting that business capital spending and exports are keeping that sector's recovery alive. Government payrolls were unchanged....

..."Businesses have reasons to hire people," said Sung Won Sohn, chief economist at Wells Fargo, in a research note. "Business confidence has improved, demand is trending up and cash is piling up on the balance sheet." And he said businesses are less able to spur higher output from current workers, one reason that the average workweek rose last month to 33.7 hours from 33.6 in June.

The more pessimistic interpretation is that consumers, the pillar of the economy since 2001, are finally flagging. "The cumulative evidence suggests something may be churning in the household sector which, at 70% of gross domestic product, is the be-all and end-all of the outlook," said George Magnus, chief global economist at UBS AG. "The interest rate-refinancing stimulus is pretty much over. Fiscal stimulus is turning into fiscal drag. Oil has also become a drag."

It's all pretty self explanatory, but it's interesting how for the last 2-3 years, the consumer managed to keep the economy from sinking while business spending declined. It looks like we are currently seeing the opposite. If oil prices remain high, consumer spending will continue to decline. At this point, I don't think we can have another tax cut to spur spending, but something needs to be done to allow consumers to access their income. I just don't know how it is possible to get oil prices to decline in the short-term. It's becoming painfully obvious to all sides, that energy prices are by far the biggest threat to the economy. And the issues that are causing the problem aren't short-term issues.

Supply sources will be threatened for a long time. Demand worldwide will continue to grow, so prices are bound to continue to increase. Somehow, that is going to have to change, I just don't see any solutions in the near-term...

[rimrocker]

Originally posted by TL
companies who do trucking are experiencing strength due to some strange factors such as coke shortages

Another failure of the Bush foreign policy... he can't even get the South American cartels to up the production for US consumers...

[rimrocker]

Q New job figures today -- 32,000 new jobs. That's a pretty small number compared to expectations. Unemployment dropped a bit. Can you talk about this --

MR. McCLELLAN: Sure. You may hear more from the President in a minute. … changing economy. There is more to do. .. we must continue to act to create as robust an environment as possible for job creation.

Q Economists say that 200,000 to 300,000 a month is what you have to do for a substantive recovery. And you're at 32,000. Isn't this a situation where job recovery is in a pattern where it's about to stall out?

MR. McCLELLAN: That's why I said -- we're continuing to add jobs…. And that's why I said the economy is continuing to move forward, but we've got more work to do… six-point plan that will create a robust environment -- as robust an environment for job creation as possible… our economy is moving forward. But we've got more work to do.

Q Doesn't this make his pitch more complicated, though? I mean, he talks about how there's still more that needs to be done, but it's a pretty upbeat assessment --

MR. McCLELLAN: And again, I think you'll hear from him -- no, the President is not satisfied… changing economy we're in. We're in a changing economy… it is moving forward… It is a changing economy, and that's why we must continue to act.

[robbie380]

Originally posted by mc mark
Now that's the American way!

Burn Baby! Burn!

lol...its not that bad. this is just part of the ups and downs of the market. the market was already weak yesterday before this news. this surprise just served to be a catalyst for the sell off. the only thing that i think held the market up early was that people thought this would mean interest rates would not rise, but now it looks like the interest rate hikes will continue.

all i can say is don't panic. the market will still be here. just average down lower, because thats where we are going.

[Faos]

Originally posted by andymoon
You do realize that this is due to people ceasing their search for work, right?

It's the summer. Can't the unemployed take a break from seaching for jobs and take their kids on vacation before school starts?

Look at the classifieds...there are TONS of jobs (and, no, not fast food and military positions either).

[mc mark]

Economy, Politics Collide for Bush Team
Challenge Is to Respond Without an Air of Panic

By Jonathan Weisman and Mike Allen
Washington Post Staff Writers
Saturday, August 7, 2004; Page A01

With job creation stalled, the stock market sliding and oil prices at record highs, a divided White House is under pressure to produce an economic policy response for President Bush's fall reelection campaign, Republican economic advisers said yesterday.

But disputes within the economic and political team may jeopardize the effort to craft a clear economic agenda, the advisers said. Plans to simplify the tax code, broaden the president's health insurance proposal and partially privatize Social Security are bumping against political concerns that any detailed proposal will present a target for Democratic attack while potentially looking like an election-year panic.

"It would not look good if they're throwing out ideas in political desperation," said Heritage Foundation economist Daniel J. Mitchell, echoing the more cautious sentiment dominating the White House debate. "They don't want to be like [President George H.W.] Bush in '92, where whenever he did do something, it looked like an election-year 'Let's throw out some stuff that nobody's going to take seriously.' "

Speaking at a picnic in Stratham, N.H., yesterday, the president remained positive as he pushed policy prescriptions that have languished for months, if not years: cutting business regulations, curbing lawsuits and allowing small businesses to band together to purchase employee health insurance.

"Today's employment report shows our economy is continuing to move forward," Bush told an audience at Bittersweet Farm. "And it reminds us that we're in a changing economy and we've got more to do. I'm not going to be satisfied until everybody who wants to work can find a job. I'm running because I understand how to take a strong economy and make it stronger."

But he hinted at proposals to come: "I'm running for four more years to continue to work for a pro-growth, pro-entrepreneur, pro-small-business economic agenda that is good for America."

Officials are still wrangling about what economic measures Bush should include in his speech to the Republican National Convention, which is less than four weeks away. Aides said the content of the speech is not set but said the goal is to make it more specific and substantive than the convention address of his Democratic challenger, John F. Kerry. Although no official would talk about it for the record because Bush has made no announcements, aides said a key second-term economic proposal will center on making health care more affordable for individuals and business -- with tax-advantaged savings plans for individuals and larger risk pools for companies.

Recent economic news has ratcheted up pressure on Bush to be bold. The economy generated 32,000 jobs in July, far short of economists' expectations. The Dow Jones industrial average slid 324 points this week to the lowest point of the year, closing Friday 772 points below its position when Bush took office.

Payroll jobs remain 1.5 million short of where last winter the White House said they would be by now. To avoid being the first president since Herbert Hoover to preside over a net job loss, Bush must hope for 372,000 new jobs a month in August, September and October.

Democrats have begun to portray Bush's sunny rhetoric as a clumsy effort to whistle past the graveyard. A revised stump speech Bush unveiled last week included the mantra "We are turning the corner, and we're not turning back." Democrats pointed out that Hoover said on March 7, 1930, "Prosperity is just around the corner."


http://www.washingtonpost.com/wp-dyn/articles/A46654-2004Aug6.html