Research Briefing

“Beware Friday’s Headline Jobs Number” As Census Workers Hide Lack Of Private Sector Job Growth

OBAMA’S TREASURY SECRETARY THIS MORNING: “[T]He Unemployment Rate Is Still Terribly High … It Is Going To Stay Unacceptably High For A Long Period Of Time.” (Tim Geithner, NBC’s “Today Show,” 4/1/10)

DON’T BELIEVE THE HYPE: GOVERNMENT CENSUS EMPLOYMENT WILL MEAN

ANY JOB GROWTH IN MARCH WILL BE “DISAPPOINTMENT” 

Questions Are Being Raised “About Whether Friday’s Hotly Anticipated BLS Number Will Actually Show A Net Loss Of Jobs When Temporary Census Positions And Weather-Related Anomalies Are Factored Out.” (Ben White, Lisa Lerer and Eamon Javers, Politico’s “Morning Money,” 4/1/10)

• “That Would Suggest The Economic Recovery Is In Danger Of Stalling Out Early  ...” (Ben White, Lisa Lerer and Eamon Javers, Politico’s “Morning Money,” 4/1/10)

Friday Job Report Will Be “Disappointment” With Job Gains Mostly From Census. “BEWARE FRIDAY’S HEADLINE JOBS NUMBER: CalculatedRisk reports that even if Friday’s employment report shows a gain of 200,000 jobs in March, as expected, it might be viewed as a disappointment: ‘The March report will be distorted by two factors: 1) any bounce back from the snow storms, and 2) the decennial Census hiring that picked up sharply in March. … Also the Census will add something like 100,000 workers to the March report ...” (Ben White and Eamon Javers, Politico’s “Morning Money,” 3/30/10)

• And Job Boost From Census Will Not Last As “Most Census Workers Will Only Be Employed For A Matter Of Months.” “Yet there are some clouds on the horizon. It’s unclear whether the 9.7 percent unemployment rate will drop at all even with the positive job numbers. Also, the help from census hiring is a temporary boost, at best. Most census workers will only be employed for a matter of months.” (Ian Swanson, “Positive March Jobs Figures To Bolster Obama, But Horizon Cloudy,” The Hill, 3/30/10)

BECAUSE JOB CREATION IN PRIVATE SECTOR CONTINUES TO STRUGGLE

Obama Promised “More Than 90 Percent Of The Jobs Created” By His Stimulus “Will Be In The Private Sector.” (“Transcript: Obama’s Prime Time News Conference,” The New York Times, 2/9/09)

But Yesterday, “ADP Said Private-Sector Employment Dropped By 23,000, Confounding Economist Expectations For A 40,000 Rise.” (Steve Goldstein, “Stock Futures Deeper In Red After ADP Figures,” MarketWatch, 3/31/10)

• With Small Businesses Bearing Lion’s Share Of Jobs Losses. “Companies employing more than 499 workers shrank their workforces by 7,000 jobs. Medium-sized businesses, with 50 to 499 employees, cut 4,000 jobs and small companies decreased payrolls by 12,000, ADP said.” (Timothy R. Homan and Courtney Schlisserman, “ADP Says U.S. Companies Unexpectedly Cut Payrolls,” Bloomberg, 3/31/10)

Disappointing ADP Report Casts Dark Shadow On Rosy Predictions For Friday’s BLS Report. “The drop in ADP payrolls calls into question predictions that the Labor Department’s nonfarm-payrolls report due out Friday, one of the most important economic data points for financial markets, will show big gains for March, even accounting for the bounce back from severe weather last month and for temporary hiring by the Census Bureau. ‘Clearly ADP is disappointing to the growth mongers and challenges the fear of a strong ‘clean’ report this Friday,’ said CRT Capital Group.”  (Deborah Levine, “Treasurys Gain After ADP Private-Sector Disappointment,” MarketWatch, 3/31/10)

• With Economy Still Not In Condition Necessary To Produce “Rapid” Employment Growth. “The economic recovery has not been long enough or strong enough along the way yet to produce the kind of rapid employment that people are hoping for,’ Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, which produces the figures with ADP, said in a conference call with reporters after the report.” (Timothy R. Homan and Courtney Schlisserman, “ADP Says U.S. Companies Unexpectedly Cut Payrolls,” Bloomberg, 3/31/10)

CNBC’s Steve Liesman Says ADP Job Report Is Being Described As “Disappointing,” “Shocking,” And “Weak.” “Yeah, Mark, disappointing and shocking are two of the words being used this morning to describe that weak ADP jobs report for March. Weak is another word they’re using. Total private sector employment estimated by ADP down 23,000 in the month of March. Economists were looking for plus 40,000. So, that’s a big difference right there. February also revised down 24,000 from 20,000. The nonfarm payroll estimates for economists, government and private sector, is for plus 200,000, so that’s another reason why this was disappointing.” (CNBC’s “Squawk On The Street,” 3/31/10)

• Steve Liesman: “[A]nd People Feel As If This Far Into The Recession, Yeah Jobs Lag, But Usually Not This Long.” (CNBC’s “Squawk On The Street,” 3/31/10)