Last Friday's jobs number is not a secret and has been overanalyzed to death. But let me sum it up to start the new week: The 10.2% rate of unemployment was definitely an "ouch," especially since it was due solely to more people losing their jobs and not to a change in the numbers of job seekers. The U6 rate of jobless, which includes those who want full-time work and those discouraged workers who have stopped looking, hit an all-time record of 17.5%. The length of the work week did not change and is still at its all-time low of 33 hours.
On the other hand, the prior two months' numbers were revised to the good by 91,000 jobs. Temporary employment swung to the positive by 34,000 and the last two months were revised a bit so we now have three months in a row of temp job gains. Temp job losses were 200,000 for the first three months of the year with January the worst month with job losses of 90,000. A swing from a 90,000 loss to a 34,000 gain is heartening. Temp work is usually a precursor to full-time employment.
Average hourly earnings increased 0.3%. Coupled with the recent news on productivity -- private nonfarm productivity grew at an annual rate of 9.5% last quarter and the manufacturing sector by 13.5% --- you can conclude that not all the news is bad. It does, however, mean that the prospect for a jobless recovery cannot be ignored. While the early indications registered by a jump in temporary jobs is encouraging, the magnitude of any potential job gain is questionable. Former Federal Reserve governor and Soleil's Chief Economic Advisor Lyle Gramley continues to forecast a tepid recovery and no need for the Fed to take action on interest rates for some time.
Market Commentary The Stock Doc: The Bonus Blame Game 11/6/2009 3:00 PM EST The bonus blame game will likely heat up as the government mulls regulation for bailed-out banks.
Market Commentary Employment Is Key 11/6/2009 12:24 PM EST We need policies to incent innovation and productive job creation at home.
Vincent Farrell Jr. is chief investment officer for Soleil Securities Group and a regular guest on CNBC and other national print and broadcast media.
Prior to joining Soleil in August 2008, Farrell was a principal of Scotsman Capital Management. Before that, he was chairman of Victory Capital Management of Cleveland and chairman of Victory SBSF Capital Management in New York. He was a founding partner of Spears Benzak Salomon & Farrell, which was acquired by KeyCorp in 1995. Vince held a variety of positions in his 23 years at SBSF, including chief investment officer, and he served as the portfolio manager on a number of the firm's largest client relationships.
Prior to joining SBSF, Vince spent nine years at Smith Barney as a vice president, sales.
Vince graduated from Princeton University in 1969 and received his MBA from the Iona College Graduate School of Business in 1972.
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