Where are the jobs? The bear case on the November jobs report

December 4, 2009

From David Rosenberg of Gluskin Sheff, of course:

While it is abundantly clear that companies are near the end of the job downsizing phase, there is scant evidence of any renewal in the pace of new hiring. In fact, it is quite the contrary. This assertion is underscored by the fact that both the median (20.1 weeks) and the average (28.5 weeks) duration of unemployment hit new record highs last month. The share of the unemployed that has been looking for work without success for six months or longer also reached an unprecedented 59% last month. We are fairly certain that these folks will have a slightly different take on today’s employment number than the mainstream economics community. In addition, also keep in mind that the employment diffusion index, while improving in November, was still unacceptably low at 40.6. In other words, roughly 6 out of 10 businesses are still rationalizing their staff loads, even if at a less dramatic rate than in previous months.

All in, the November employment report was positive relative to expectations, but still quite lackluster in view of the dramatic government stimulus underpinning the pace of economic activity at this time. It’s hard to reconcile such a soft employment decline with anything else we saw in the month and at the same time, a diffusion index of 40, weakening wage growth, a record-high level of time to find a new job within the ranks of the unemployed and the lowest employment-to–population ratio in 26 years is hardly consistent with a vibrant labour market.

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Jim, Can’t get through the day without checking your superb blog. With the new look of your blog, I am missing the list of your favorite websites and blogs. Can you bring that back? Keep up the good work…..Jim Quick

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