Friday, June 02, 2006

Mixed Picture on Jobs Growth

From the AP:

Payroll growth stalls with 75,000 new jobs

"Job growth faltered in May, with employers boosting payrolls by just 75,000. Yet the nation's unemployment rate dipped to 4.6 percent, the lowest since the summer of 2001."

"The latest snapshot, released by the Labor Department on Friday, offered a mixed picture of the jobs climate. Wage growth, meanwhile, slowed, a development that should ease concerns about inflation getting out of hand."

"The count of new jobs generated last month — 75,000 — was the smallest since October, when hiring practically stalled as companies were jolted by fallout from the Gulf Coast hurricanes. Job gains for March and April turned out to be weaker than previously reported."

"On the other hand, the unemployment rate dropped a notch from 4.7 percent in April to 4.6 percent in May, the lowest since July 2001."

However, somewhat more intesting, it seems like the payroll data may have been leaked early.

From Reuters:

Market moves before jobs report raise suspicion

"A group of well-timed trades raised eyebrows on Friday after stock futures and Treasury bond prices jumped and the dollar fell sharply in the seconds before the U.S. Labor Department officially published its May nonfarm payrolls report."

"The Labor Department's Bureau of Labor Statistics said it did not release the key data on the Internet before embargo time. "There were no timestamps between June 1, 8:30 a.m. (when revisions to first-quarter productivity data were released) and June 2, 8:30 a.m.," said Gary Steinberg, a bureau spokesman."

"Steinberg said earlier that the carefully controlled release of the numbers to reporters had proceeded as normal."

"In the 15 seconds before the 8:30 a.m. Friday official release, the yield on the 10-year Treasury note fell 3.5 basis points to 5.072 percent."

"As for the dollar, the euro gained 0.15 percent against the greenback in the 12 seconds leading up to the release."

"The S&P 500 index futures jumped 0.4 of a point six seconds before, at 8:29:54 -- the biggest absolute change in price on the contract in a single move in the minutes leading up to the release of the data."

"'It was either great anticipation by traders or someone had the number early,' said Phil Flynn, senior market analyst at Alaron Trading Corp."

43 Comments:

Blogger Richard said...

stock market rigged? say it ain't so! we all know it's one big con game where those in the know get news early. what a sham.

6/02/2006 12:14:00 PM  
Blogger Richard said...

stock market rigged? say it ain't so! we all know it's one big con game where those in the know get news early. what a sham.

6/02/2006 12:14:00 PM  
Anonymous Anonymous said...

The Soothsayers are sugar coating the news by highlighting

"UnEmployment figures lowest since 2001"

They dont highlight that some people just reached the deadline of unemployment benefits - this is how the figures go down.

6/02/2006 12:20:00 PM  
Anonymous Anonymous said...

I don't believe these 'soft ' numbers for a second.

The job market & economy is booming in NYC area where everyone seems to have a ton of money to spend on clothes, restaurants, & live in the right neighborhood.

Ever read the articles in the NY times Real Estate section on Sunday?? Everyone is making in the six figures and spending $$$ on co-ops & condos.

Still if you are making less than six figures you feel like you are living in poverty & you can only stay in the metro area anywhere if you have a rent stabilized apartment. Buying anything in any boro or NNJ is out of the question.

Prices will fall but not by much. Prices will range from either -5% - +10% by this time in 2007.

6/02/2006 12:30:00 PM  
Anonymous Anonymous said...

How convienient just before the next rate hike. How much longer can this easy money go on where people pay $700,000 for a condo under 1000 square feet.

Oh yeah, everyone wants to live here & have the sex in the city lifestyle

6/02/2006 12:33:00 PM  
Blogger Richie said...

It's trendy.

6/02/2006 12:41:00 PM  
Blogger chicagofinance said...

Yes! Home sweet home on sale
============================
Toll Brothers gives everything away FREE!!!
#1 Anonymous
Have you heard? Because Toll can no longer sell ANYTHING at Hudson Tea, the sales people are now being allowed to include FREE upgrades, incentives and even PARKING!!! This is quite upsetting to those of us who spent THOUSANDS of dollars on these amenities and now they GIVE THEM AWAY.
Posted on: 2006/6/2 11:11

Re: Toll Brothers gives everything away FREE!!!
#2 anonymous
if you buy anything at all in this universe at top dollar and it goes on sale "tomorrow," you have no recourse whatsoever.

Go ahead, write.

Posted on: 2006/6/2 11:17

Re: Toll Brothers gives everything away FREE!!!
#3 Anonymous
That's the mkt you played in. You probably bought thinking things were going up or were not going to come down. Like any investment, those are the risks. Also, HTB needs to do things to attract buyers because the comp is fierce and HTB offers nothing vs newer construction.

Posted on: 2006/6/2 11:23

Re: Toll Brothers gives everything away FREE!!!
#4 Anonymous
It is Toll's strategy not to drop prices. As a result, they will do anything possible to move units including giving everything away free, and other interesting perks such as in financing.

Don't complain on a public board. They want satisfied customers. Go discuss your options with them.

Posted on: 2006/6/2 11:29

Re: Toll Brothers gives everything away FREE!!!
#5 Anonymous
not sure i understand the complaint. incentives like free parking and upgrades are just a roundabout way of lowering the prices. would you still be angry if they instead lowered the price of the unit $35K but parking still cost $35K?

simple economics here. demand is lower, price has to come down.

Posted on: 2006/6/2 13:17

6/02/2006 01:42:00 PM  
Anonymous Anonymous said...

Chicago-

Did I miss something, is this from your Hudson Tea board?

JM

6/02/2006 01:51:00 PM  
Anonymous gary said...

Grim:

Why is the 10 year yield dropping through the floor?

6/02/2006 02:27:00 PM  
Anonymous UnRealtor said...

"They dont highlight that some people just reached the deadline of unemployment benefits - this is how the figures go down."


Either the unemployment stat has value, or it doesn't.

If it had value before Bush took office in 2001, then it should have the same value after he took office.

6/02/2006 02:36:00 PM  
Anonymous UnRealtor said...

I don't trust the "mainstream" media when it comes to reporting on the economy, including Reuters.

A positive of 75,000 new jobs created is turned into a negative because the number "fell below economist expectations."

They "report" the same thing for a month when 150,000 new jobs are created, because it wasn't 160,000.

Too much agenda and bias are inserted to obfuscate the real information.

6/02/2006 02:41:00 PM  
Blogger grim said...

Gary,

Because the price of the 10Y went through the roof? :)

I can't tell you why, because I don't know, but I have an opinion (as does everyone else).

Flight to quality in an environment of lowered inflation expectations.

grim

6/02/2006 02:42:00 PM  
Blogger grim said...

Although I'm not even sure I believe my opinion, especially with crude back up to $72 and hurricane season just starting..

grim

6/02/2006 02:45:00 PM  
Anonymous Anonymous said...

Hey Chicago, Some real variance in the prices people are paying at HTB. Looks like over the last few months anywhere from $400K to $1,400K. Not that many sells though.

JM

6/02/2006 02:50:00 PM  
Anonymous Gary said...

Thanks, Grim. Yeah, I can't tell which way is up anymore.

6/02/2006 03:18:00 PM  
Blogger chicagofinance said...

JM or anyone:

If anyone could provide me with HTB closes for 2006 after February 1st - unit and price. I will be eternally grateful!

Seriously, I would offer some kind of barter!!!!

6/02/2006 03:39:00 PM  
Blogger chicagofinance said...

gary said...
Grim:
Why is the 10 year yield dropping through the floor?
3:27 PM

It is the market pricing in fewer Fed hikes in 2006, and possibly some cuts.

Personally - they are friggin' nutz, but Treasury buyers are roughly 50% off-shore investors, and the USD is going to take a bath, so good gumbo for them.

The real estate market is going to tank no matter what happens to the Ten. However, if we get the Ten sold off through 6%, there will be a wholesale and immediate epic collapse.

chicago

6/02/2006 03:53:00 PM  
Anonymous Anonymous said...

Chicago-
I'll email the info to Grim about HTB from the source I have.

We can talk later about the barter.

JM

6/02/2006 04:42:00 PM  
Anonymous Anonymous said...

Does anyone know what happened to the blog site: America's Overvalued Real Estate (overvalued blogspot.com).
It all of a sudden ended about a week agao and now it's a commercial real estate site!
(total garbage)
I really miss it and the overvalued real estate postings from all over the US. A while ago there was even a hilariously teeny-tiny island for sale from Canada.

6/02/2006 04:51:00 PM  
Anonymous Anonymous said...

OOOPs! I posted that last question in the wrong section.

6/02/2006 05:03:00 PM  
Anonymous UnRealtor said...

Compare the economic reporting from the Associated Press and Reuters to this UPI report:


U.S. unemployment 4.6 percent, wages up

WASHINGTON, June 2 (UPI) -- U.S. non-farm payroll employment rose 75,000 in May to leave the nation's unemployment rate steady at 4.6 percent, even as wages kept rising.

The Labor Department also said Friday that from January through April of this year, payroll employment growth averaged 164,000 per month.

Average hourly earnings for private sector production and non-supervisory workers edged up by 1 cent over the month, following a 10-cent increase in April. Since January, average hourly earnings have risen by 3.7 percent.

http://www.upi.com/NewsTrack/view.php?StoryID=20060602-091156-5072r



Quite a difference once all the obfuscation from the AP and Reuters is removed, and simply the facts are reported.

6/02/2006 06:57:00 PM  
Blogger chicagofinance said...

JM:

Merci Beau-yaaaaaaaaaa

chicago

6/02/2006 08:28:00 PM  
Anonymous Anonymous said...

Chicago-

You'll have to hold off on the thanks for a few days. I was running out of my office and forgot the notepad I wrote the info down on.

I'll send it to Grim on Monday. Enjoy your weekend.

JM

6/02/2006 08:44:00 PM  
Anonymous Anonymous said...

That headline "mixed" is a bit misleading. The headline number, new jobs, is plain bad. As noted by anon, the unemployment rate going down to 4.6 is misleading.

There are a lot of moving parts to the economy, even a single stat like jobs. Back it up into the population employment ration (see Angrybear.blogspot.com for the graph) and you'll get a better idea of the situation.

Short version, in 2000 the pop. employment ration was about 64.5 percent, today it's at 63 percent.

The numbers mean the same for Bush as for everybody else, but that means all the numbers, no cherrypicking.

for the record, I usually post as Lindsey

6/03/2006 08:16:00 AM  
Blogger Grim Ghost said...


I don't trust the "mainstream" media when it comes to reporting on the economy, including Reuters. A positive of 75,000 new jobs created is turned into a negative because the number "fell below economist expectations."


The economy needs around 100 new jobs every month just to keep up with the natural growth of the workforce. So yes, 75K new jobs is a disappointing number and it is in fact a net negative rather than being the pure positive you claim it is.

Depending on where in the business cycle you are, this could or could not be disappointing.


Too much agenda and bias are inserted to obfuscate the real information.


In which case you should complain to the economists, not Reuters. What news agencies do is to to take the consensus economists number. A number below or above that is said to exceed or fall below expectations. It may be that too much attention is paid to a volatile monthly number, but it seems that you're seeing bias in plain facts.

After all, Wall Street traders and the like promptly reacted to the numbers exactly as they would react to a disappointing jobs report, so Reuters was correct.

6/03/2006 01:17:00 PM  
Anonymous UnRealtor said...

"In which case you should complain to the economists, not Reuters."


Not at all, to this day Reuters still refuses to refer to 9-11 as a "terrorist attack," and also refuses to include the word "terrorist" in any of their reporting on terrorist acts.

They have an agenda.

There is no winning, because when 150,000 jobs were created, they would report that it was "below expectations."

As mentioned before, compare and contrast with the UPI report above.

6/03/2006 05:31:00 PM  
Blogger Grim Ghost said...


They have an agenda.There is no winning, because when 150,000 jobs were created, they would report that it was "below expectatio ns."


Let me repeat. The expectations are based on the survey of economists. Reuters or any other news service don't make then up. And incidentally, CNBC immediatedly reported this as below expectations. I was watching TV at the time.

Here is what the Dow Jones said
"Employers abruptly reduced the pace of hiring in May, further confirmation that the U.S. economy has downshifted into a period of slower growth."

That scarcely sounds cheerful.

I suppose they could all have a bias in reporting the jobs report as they did. Furthermore all the economists surveyed on Wall Street could have a bias about the job report. All the traders who reacted to the news as if it were a bad job report could also have a bias. In short, reality itself has a bias against the jobs report that you object to.

When earnings reports are said to be above or below expectation based on analyst expectations, do you call those biased as well ?

6/03/2006 06:35:00 PM  
Anonymous Anonymous said...

Here is an interesting (opposite to MSM) take on the job report, by Lawrence Kudlow (CNBC):
http://www.realclearpolitics.com/articles/2006/06/more_than_half_full.html


So it was with Friday's 75,000 increase in non-farm payrolls for May. That number was greeted derisively, despite the fact that over the past 33 consecutive months, 5.3 million new jobs have been created. Through the year ending in May, 1.9 million new jobs have been created with the unemployment rate moving down to 4.6 percent -- the lowest rate in nearly five years and below the average of the last forty-five years.

But wait -- there's even more good news being clouded out by the pessimist frowns: The Labor Department's household survey, which focuses on self-employed owner-operators of new entrepreneurial businesses, showed a booming May jobs increase of 288,000. You won't likely hear a peep about this in the mainstream media, which shuns this survey month after month....Right now, total employment in the U.S. stands at a record high of 144 million.

6/03/2006 08:03:00 PM  
Blogger Grim Ghost said...


The Labor Department's household survey, which focuses on self-employed owner-operators of new entrepreneurial businesses, showed a booming May jobs increase of 288,000. You won't likely hear a peep about this in the mainstream media, which shuns this survey month after month..


This is silly. The establishments survey is traditionally considered the gold standard. Again, its not the main stream media (and Kudlow appears regularly on CNBC, what is that if not the main stream media) that considers the establishment survey important, but economists, business forecasters etc. Alan Greenspan has said before that the establishments survey is the most important survey the fed uses to make its standard. Its far more comprehensive as well.

And the mainstream media hardly shuns the survey, it reports the unemployment rate from there.
In short, its not just the so called main stream media that considers the establishment survey more important than the household survey, its the bulk of economists and professional traders, including the Fed. Thats why its more important.

6/03/2006 08:40:00 PM  
Anonymous UnRealtor said...

Grim Ghost, we can disagree on this, but I've studied the media, how they craft headlines, how they place stories, how they bury pertient facts in a story, etc, and the "mainstream" media are unreliable when reporting the economy of a president they hate.

Also, economist predictions are moot. Predictions are not facts, and are essentially worthless.

The UPI story (above) reported the facts, and left the crystal ball obfuscation home.

6/04/2006 12:23:00 AM  
Anonymous UnRealtor said...

pertient = pertinent

6/04/2006 12:24:00 AM  
Anonymous UnRealtor said...

Some interesting comparisons between John Snow, Robert Rubin, and others:

http://www.nytimes.com/imagepages/2006/06/03/business/20060603_CHARTS_GRAPHIC.html
(triple-click to select long links)

Economic Growth
Snow: +3.8%
Rubin: +3.8%


Employment Growth
Snow: +1.6%
Rubin: +1.5%

6/04/2006 12:32:00 AM  
Blogger Grim Ghost said...


Also, economist predictions are moot. Predictions are not facts, and are essentially worthless.


They arent' taken as worthless by Wall Street, so your opinion is not shared. And they are typically reported before the numbers so you can see for yourself whether the results met expectations or not.

And incidentally, the BLS reports are not "facts" as well. They are based on BLS surveys and sampling, and they are adjusted by seasonal time series and by something called the birth death model. You may think the number is a fact, but its based on a good deal of modelling and mathematical crunching inside.

The point being that outside economists who do their own projections are not relying on worthless data, but using some of the same techniques the BLS does.

As far as the overall strength of the economy goes, if you believe that there is an RE bubble, then arguably the economy has pretty weak underpinings.

6/04/2006 10:48:00 PM  
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