Weekly Wrap and Forecast - December 4, 2006

[EJ]

Weekly Wrap and Forecast - December 4, 2006

Market Forecast
Week: Mostly Cloudy http://www.itulip.com/forums/../images/partlycloudy.jpg Month: Periods of Rainhttp://www.itulip.com/forums/../images/heavyrain.jpg Three Months: Stormy http://www.itulip.com/forums/../images/stormy.jpg

Key Economic Reports

December 5 – Factory Orders Oct: Predictions range from -4.2% to 2.1%. We expect -4% to -5%
December 8 – Nonfarm Payrolls Nov: Predictions range from 115K to 92K. We expect 60K to 90K.

Details at briefing.com (http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm)

Key Events

http://www.itulip.com/images/housingpermits1966-2006.gif

The prospect of a housing led US recession received new evidence last week that sent the stock markets reeling for a day when the manufacturing sector showed a "surprise decline (http://www.itulip.com/forums/showthread.php?t=667)."

The markets are dealing with the usual cross-currents that accompany the start of an inflationary recession: rising profits and prices, and falling demand.

Briefing.com offers a good analysis on ... [to be completed later.]



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[jk]

U.S. Economy: Employment Growth Exceeds Forecasts (Update1)

By Joe Richter

Dec. 8 (Bloomberg) -- Employers in the U.S. added more workers than forecast in November, showing the economy's resilience as housing and manufacturing slump.

The increase of 132,000 followed a gain of 79,000 the prior month that was less than initially estimated, the Labor Department reported today. Hiring accelerated at retailers, restaurants and health-care firms, while manufacturers and homebuilders shed jobs. The jobless rate rose to 4.5 percent from a five-year low of 4.4 percent.

[metalman]

U.S. Economy: Employment Growth Exceeds Forecasts (Update1)

By Joe Richter

Dec. 8 (Bloomberg) -- Employers in the U.S. added more workers than forecast in November, showing the economy's resilience as housing and manufacturing slump.

The increase of 132,000 followed a gain of 79,000 the prior month that was less than initially estimated, the Labor Department reported today. Hiring accelerated at retailers, restaurants and health-care firms, while manufacturers and homebuilders shed jobs. The jobless rate rose to 4.5 percent from a five-year low of 4.4 percent.

"Half the world is impressed by the low levels of unemployment in the United States. The other half knows that these statistics aren't official, but the result of a voluntary telephone survey. Many of those who declare themselves employed are assistants and day workers. Working just one hour a week is enough for one to be classified as "employed." Given that it's considered antisocial to declare yourself unemployed, the US statistics may well say more about American society's dominant norms than about its actual condition."

http://www.globalpolicy.org/socecon/crisis/tradedeficit/2006/1025dollarillusion.htm

[jk]

i believe the employment numbers are based on a survey of enterprises, while the unemployment number is based on a household survey. you can criticize the employment numbers because of the birth-death model plug factor used to estimate small business labor activity, but it's not based on individuals' self reports.

[bart]

"Half the world is impressed by the low levels of unemployment in the United States.

The author is also a bit uninformed. The US calculates unemployment in a different way than most of the rest of the world. If it were similarly reported, as in the U6 rate that's still reported by the BLS instead of the U3 report, it would be lots less impressive (http://www.nowandfutures.com/grins/impressive.wav).


http://www.nowandfutures.com/download/unemployment_short_term.png


http://www.nowandfutures.com/download/unemployment.png