March Jobs Report -701,000

[James48843]

Uh-oh!!
This just in:


A 'misclassification error' made the May unemployment rate look better than it is.

Source: Washington Post

When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.

The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May.

The Bureau of Labor Statistics, the agency that puts out the monthly jobs reports, said it was working to fix the problem.

“BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address the issue,” said a note at the bottom of the Bureau of Labor Statistics report.

Read more: https://www.washingtonpost.com/business/2020/06/05/may-2020-jobs-report-misclassification-error/


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[tsptalk]

Well, fast forwarding two months and obviously things have changed. Back then I was talking about despondency and said...

I expect the market to start to rebound several months before the economy shows signs of recovering. Of course this could be a multi-year thing, so maybe it will be 6 months? I don't know. I'll take it week by week. Just remember the cycle of market emotions. "Optimism" comes half-way on the upside...

If I could only have listened to myself because I sold way too early after the initial bounce off the lows. But now where are we on the cycle of emotions chart? Is everybody on the opposite end of despondency now? Is it time to throw caution to the wind, or to realize that euphoria is upon us?

The market is due for a rest, but when and how much? I wish I could tell you exactly. I just know it's inevitable. I just hope I'm smart enough to buy that pullback when it comes.

Buy fear - sell euphoria.


Posted in early April...

I don't see anything optimistic about the stock market for at least six months.

That sounds more like a wish list for you and Joe Biden. j/k

I expect the market to start to rebound several months before the economy shows signs of recovering. Of course this could be a multi-year thing, so maybe it will be 6 months? I don't know. I'll take it week by week. Just remember the cycle of market emotions. "Optimism" comes half-way on the upside...

Despondency
Your expectations have been disappointed, you got a strong loss from your investments, you feel bad and you don’t want to buy a stock ever again. This is the point of maximum financial opportunity for investors that are aware of what is going on and are willing to be contrarians.

That sounds more like a wish list for you and Joe Biden. j/k

I expect the market to start to rebound several months before the economy shows signs of recovering. Of course this could be a multi-year thing, so maybe it will be 6 months? I don't know. I'll take it week by week. Just remember the cycle of market emotions. "Optimism" comes half-way on the upside...

 

[nasa1974]

A friend of mine, an ex Chicago cop, is saying friends of his in Chicago and Boston are afraid of civil unrest if this continues into late June and early July.

 

[tsptalk]

I don't see anything optimistic about the stock market for at least six months.

That sounds more like a wish list for you and Joe Biden. j/k

I expect the market to start to rebound several months before the economy shows signs of recovering. Of course this could be a multi-year thing, so maybe it will be 6 months? I don't know. I'll take it week by week. Just remember the cycle of market emotions. "Optimism" comes half-way on the upside...

Despondency
Your expectations have been disappointed, you got a strong loss from your investments, you feel bad and you don’t want to buy a stock ever again. This is the point of maximum financial opportunity for investors that are aware of what is going on and are willing to be contrarians.

 

[James48843]

They're still calling for double digit unemployment rate numbers before long so yeah, ww is right about it lagging. Of course by the time we see a 10% or 15% unemployment rate in the report in April or May (May / June releases), the market may have had that all priced in, and stocks could be climbing already. Especially if the virus numbers stabilize in the interim.
....

I still, for the life of me, can't understand how you see anything remotely like stocks climbing in May/June. I see the next unemployment data report will have 10 million plus job losses, and high single to perhaps low double digit unemployment (8-11% unemployment next month is a real possibility. I'm seeing HUGE numbers, who haven't even been able to file yet for unemployment because the computers are down or jammed. Michigan's system for filing is designed for 5,000 filers a week. Last week it blew out after over 300,000 filers tried.

I think we will see staggering numbers of deaths, and an increasingly desperate economy self-destructing all the way until at least August, and then I think it will be a veeeery slow recovery after that.

I hope I'm wrong, but I don't see anything optimistic about the stock market for at least six months.

 

[TommyIV]

So then based on that April's numbers could be much worse? Just saying if it doesn't include the whole month of March.

The 701,000 jobs lost up to March 12th is mostly the result of employers not hiring anymore. Regular job turnovers of employees moving from one job to the next halted leaving more workers stuck between jobs. April's report will reflect when nationwide shutdowns began and the layoffs followed.

 

[Rod]

It will be interesting to see how the market reacts to the earnings reports in the coming weeks. The 1st quarter wasn't impacted until into March so the numbers may not be horrible, but the question is whether their negative guidance going forward is fully priced in.

I wonder if companies will hold off as long as possible, given that the SEC has granted a 45-day extension to file?

https://www.marketwatch.com/story/will-companies-in-the-dow-report-earnings-as-usual-despite-covid-19-disruptions-or-delay-them-because-they-can-2020-03-31

 

[tsptalk]

They're still calling for double digit unemployment rate numbers before long so yeah, ww is right about it lagging. Of course by the time we see a 10% or 15% unemployment rate in the report in April or May (May / June releases), the market may have had that all priced in, and stocks could be climbing already. Especially if the virus numbers stabilize in the interim.

At this point, as far s the stock market goes, it's more about the technicals working out the expectations - testing the low, relief rallies, etc.

It will be interesting to see how the market reacts to the earnings reports in the coming weeks. The 1st quarter wasn't impacted until into March so the numbers may not be horrible, but the question is whether their negative guidance going forward is fully priced in.

 

[Rod]

Sounds like the worst case scenario may already be priced in. :scratchchin:

I think you're right. At least for this week, or so.

 

[weatherweenie]

The government’s survey of establishments painted a grim picture of the U.S. employment situation through early March, but its poll of households was far worse.

The household survey, which asks individual residents how many people are working there, showed a stunning drop of 2,987,000 workers for the month.

 

[LTJPFED]

Both use the week up to the 12th of the month for sampling, which in this case was before the worst of the job losses began.

Thanks for that info. So then based on that April's numbers could be much worse? Just saying if it doesn't include the whole month of March.

 

[weatherweenie]

Both use the week up to the 12th of the month for sampling, which in this case was before the worst of the job losses began.

Isn't 700k pretty low considering there were 10 million new unemployment claims the past 2 weeks?

 

[LTJPFED]

Isn't 700k pretty low considering there were 10 million new unemployment claims the past 2 weeks?

I thought the same thing.

 

[k0nkuzh0n]

Isn't 700k pretty low considering there were 10 million new unemployment claims the past 2 weeks?

 

[weatherweenie]

Or a sucker rally? Not sure if we have seen the worst.

Sounds like the worst case scenario may already be priced in. :scratchchin:

 

[tsptalk]

Sounds like the worst case scenario may already be priced in. :scratchchin:

 

[weatherweenie]

And the futures rallied, briefly.

US payrolls drop 701,000 in March, the first jobs decline since 2010

 

[tsptalk]

Amazingly, the futures improved after the report.

 

[tsptalk]

US payrolls drop 701,000 in March, the first jobs decline since 2010

Nonfarm payrolls dropped by 701,000 in March, according to Labor Department numbers released Friday that begin to show the economic damage wrought by the coronavirus crisis.

It was the first decline in payrolls since September 2010.

The unemployment rate rose to 4.4% as employers just began to cut payrolls ahead of social distancing practices that shut down large swaths of the U.S. economy in order to stop the virus’s spread.