by CalculatedRisk on 2/09/2010 10:04:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 2.5 million job openings on the last business day of December 2009, the U.S. Bureau of Labor Statistics reported today. The job openings rate was little changed over the month at 1.9 percent. The job openings rate has held relatively steady since March 2009. The hires rate (3.1 percent) and the separations rate (3.2 percent) were essentially unchanged in December.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. Remember the CES (Current Employment Statistics, payroll survey) is for positions, the CPS (Current Population Survey, commonly called the household survey) is for people.

The following graph shows job openings (yellow line), hires (purple Line), Quits (light blue bars) and Layoff, Discharges and other (red bars) from the JOLTS. Red and light blue added together equals total separations.

Unfortunately this is a new series and only started in December 2000.

Click on graph for larger image in new window.

Notice that hires (purple line) and separations (red and light blue together) are pretty close each month. When the purple line is above total separations, the economy is adding net jobs, when the purple line is below total separations, the economy is losing net jobs.

According to the JOLTS report, there were 4.073 million hires in December, and 4.238 million separations, or 165 thousand net jobs lost. The comparable CES report showed a loss of 150 thousand jobs in December (after revisions).

Separations have declined sharply from earlier in 2009, but hiring has not picked up. Quits (light blue on graph) are at a new low too. Usually "quits" are employees who have already found a new job (as opposed to layoffs and other discharges).

The low turnover rate is another indicator of a very weak labor market.

by CalculatedRisk on 2/09/2010 08:52:00 AM

From Reuters: Dark clouds hang over U.S. small businesses: survey

The outlook of small business owners remained bleak at the start of the new year, according to a survey released on Tuesday by the National Federation of Independent Business. ... But the group also said that seven of the index's 10 components rose, indicating conditions could soon improve. Better outlooks on jobs, inventories and capital spending have helped push the index up 1.3 points since December, the group said

And a few excerpts from the report:

The National Federation of Independent Business Index of Small Business Optimism improved slightly in January to 89.3, 1.3 points above December's reading. January's index is 8.3 points higher than the survey's second lowest reading reached in March 2009 (the lowest reading was 80.1 in 1980). But optimism has clearly stalled in spite of the improvements in the economy in the second half of 2009. The quarterly Index readings have been below 90 for 7 quarters, indicative of the severity and pervasiveness of this recession.

"Small business owners entered 2010 the same way they left 2009, depressed," said William Dunkelberg, NFIB chief economist. "The biggest problem continues to be a shortage of customers."
...
Owners reported workforce reductions that average .52 workers per firm, basically unchanged for the past several months. Nine percent of the owners increased employment by an average of 3 workers per firm, but 19 percent reduced employment an average of 3.9 workers per firm (seasonally adjusted).

... still more firms planning to cut jobs than planning to add.

And the number one problem:

"The biggest problem continues to be a shortage of customers." ... Only 5 percent of the owners reported "finance" as their number one business problem (up one point).

It appears that small business hiring has been very weak during the current "recovery", and this survey suggests the reason is weak end demand, a "shortage of customers".

by CalculatedRisk on 2/08/2010 11:23:00 PM

From the WaPo: Federal government will be closed on Tuesday. More snow ...

This could mean that some of the economic releases might be delayed this week.

And from Paul Krugman: Euro perspective. Professor Krugman provides a pie chart putting the GDP of the PIGS (Portugal, Ireland, Greece and Spain) into perspective.

Greece, which is making most of the headlines, is a tiny economy. So are Portugal and Ireland. The only sizable player among the countries in the news right now is Spain. ... the group of stressed economies account for about 20 percent of the eurozone’s GDP.

So muddle through might work.

by CalculatedRisk on 2/08/2010 07:50:00 PM

From Bloomberg: Greece Says Aid Call Would Send ‘Worst Signal’ as Bonds Slide

“The worst possible signal which we could send out is one calling for outside help,” [Greek Finance Minister George Papaconstantinou] said in an interview with Bloomberg Television in Athens yesterday. “We will tackle the deficit,” he said, adding that tax revenues in January exceeded forecasts “by some percentage points.”

Maybe El Erian was right and it is a game of chicken:

"Europe has become a huge game of chicken, whereby the Greeks are waiting for help from the outside and donors are waiting for Greece to take a step forward."

Or maybe Greece will just muddle through as Martin Wolfe suggested a couple weeks ago in the Financial Times: The Greek tragedy deserves a global audience . Wolfe discussed three possibilities: Greece leaves the eurozone, Greece toughs it out, or Greece defaults - and concludes:

Given the horrendous difficulty of all alternatives, I am sure the effort will be made to tough it out for as long as possible. That will also be the case elsewhere. All will be forced to accept lengthy recessions.

by CalculatedRisk on 2/08/2010 04:00:00 PM

From March 29, 1999: A CNBC Promo ...

Click on graph for larger image in new window.

This graph is from Doug Short of dshort.com (financial planner). His comments:

This chart ... shifts the point of alignment ... to the bear bottom in the Oil Crisis and Tech Crash, the first major low in the 1929 Dow, and the March 9th closing low for our current Financial Crisis.

As the chart illustrates, the S&P 500 lows in 1974 and 2002 marked the beginnings of sustained recoveries. The Dow low in 1929 failed 11 months later.

The second graph shows daily closing prices for the Dow since Jan 1999. The dashed line is 10,000.

The Dow has crossed the 10,000 level many times, and my Dow 10K hat is worn out.

Of course there is nothing magical about 10K - it is just a round number.