Unemployment Report

No significant change. 36,000 jobs lost, 9.7% unemployment rate holds steady. The one semi-interesting development has been the surge in hiring of temporary workers. Over 100,000 temporary jobs have been added in the last two months alone. Below is a graph via Calculated Risk charting temp hiring (4 months shifted) against actual hiring without temps.

It shows about a four month lag between temp hiring and actual employment growth. Judging from the activity we've seen in temporary labor, we would expect to see some positive jobs news in the near future. The logic behind this is simple, following a recession firms will increases hours of current employees and hire temporary workers before making any permanent changes. It's still difficult to tell what's going to happen, but I would say that seeing growth in temporary labor is definitely better than not seeing growth. The economy is still in a depressed state. 9.7% unemployment is way too high. State governments will not be able to maintain public services if they're losing that kind of revenue and the federal government will not be able to maintain unemployment benefits to that number of people without further increases in the deficit.

In general, this report didn't give me a lot of reason to be optimistic. All the pundits seem to be declaring we've "reached bottom," which is great and all, but they were saying the same thing 6 months ago. The most significant part of the stimulus package is behind us, fed emergency programs are unwinding, and the economy is going to have to stand on its own two feet. It just seems like broadly, there are a lot more headwinds out there than tailwinds, that is, more factors are putting downward pressure on the economy than upward pressure.