Business Booms and Depressions Since 1775

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Where Are The Jobs?

We just had the August jobs report get released and it was nothing short of atrocious.

The August Nonfarm Payroll report came in unchanged, versus estimates of 70,000 jobs to be created during the month. What is even worse is that June and July were revised down an additional 58,000 jobs. The July payroll report was revised down to 85,000 from 117,000, and June was revised down an additional 26,000 jobs. What is interesting to note that despite no jobs being created during the month, the unemployment rate remained unchanged, at 9.1%.

What may be the start of a disturbing trend is the average hourly work week fell to 34.2 hours. Expectations were for 34.3 hours. That could be a sign of a slowdown in activity across the board. Average hourly earnings dropped by 0.1%, not a good sign when expectations were for an increase of 0.2%. If people are losing money, they can not spend. If people can not spend, jobs can not be created.

Breaking down the report via the Bureau of Labor Statistics website is even uglier than the headline number. The Birth/Death model accounted for +87,000. If you take this out, the country actually lost 87,000 jobs during the month of August.

European Stocks Extend Losses After Payrolls

1253 GMT [Dow Jones] Euro Stoxx 50 is down 3.4% at 2226.60, pushing further south after key US nonfarm payrolls and unemployment data come in worse than expected. NFP for August come in unchanged, the worst result since a small decline in September 2010 . The unemployment rate, which is obtained from a separate survey, is also unchanged, standing at 9.1%. Banks are some of the leading decliners, with the Stoxx 600 index, losing 4.1% on fears of stagnating economic growth. US futures are indicating a softer opening on Wall Street . The front-month DJIA contract is down 1.5%; the S&P 500 contract is 1.7% lower. No further data are due.

Canadian Dollar Hits Session Low As US Jobs Data Disappoint

TORONTO (Dow Jones)--The Canadian dollar slumped to a session low early Friday after U.S. nonfarm payrolls came in flat, raising fresh concerns over the strength of the economic recovery in the U.S.

The U.S. dollar strengthened to C$0.9824 from C$0.9780 , and from C$0.9770 late Thursday, according to data provider CQG.

The Canadian dollar, seen as a barometer of risk, strongly tracks macroeconomic data and growth outlooks of the U.S., which consumes nearly 70% of Canada's exports.

"The payroll number was pretty awful at first glance. Expectations were pretty low going into this data number, but it nevertheless shocked the market," said Blake Jespersen , director of FX sales at BMO Capital Markets in Toronto .

Payroll data assumed greater significance after U.S. Federal Reserve Chairman Ben Bernanke last week said the central bank still had the tools to stimulate growth if the situation warranted, putting the focus squarely on macroeconomic data.

"The data will amplify fears of recession or near-recession conditions in the U.S. economy," Avery Shenfeld , chief economist at CIBC World Markets in Toronto .

-By Satish Sarangarajan

Flat Payrolls Is A Black Swan Event

Some hilarity from Kathleen Madigan of Dow Jones :

8:45 (Dow Jones) Do you know how hard it is to tally up a labor force of 131 million workers and get absolutely no change month-to-month? Eyeballing the monthly revised payrolls number, it looks as if it hasn't happened since 1945. The closest in recent history was mid-2003 when payrolls dipped 2,000.

CAD Slides After Disappointing US Jobs Report

8:33 (Dow Jones) The Canadian dollar is under pressure after the release of the key US employment report for August as investors sought safety in the US dollar. The US dollar was C$0.9824 , from C$0.9780 before the data, and C$0.9770 late Thursday, according to CQG.