Black Swan Insights

Well the number came in below expectations at +162,000 for March. The real highlights were the +48,000 census workers hired (temporary jobs), +81,000 inferred by the Birth/Death model (all they do is guess), and a weather adjustment of +100,000. I would strip out the census hiring and the B/D model because these do not give you a good indication of how the real economy is doing. When you do this you get +33,000 jobs. Even this is a little suspect considering how the BLS calculated the Feb. weather adjustment into the numbers. Overall, the job market remains terribly weak but is slowly recovering. An interesting note--the US has to create 200,000 jobs per month just to keep up with the growth in the population. So in order to see a sustained drop in unemployment, you would need to have over 200,000 jobs created per month. We are a long way from that.

Black Swan Insights

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Wall Street is currently expecting payrolls to increase by 190,000 for the month of March. Goldman Sachs is slightly more optimistic with an estimate of 200,000(revised down from 275,000). However this week's ADP number showed a decline of 23,000 jobs. So what is it going to be? One thing to note about the ADP number is that it only tracks private payrolls and does not include government hiring. The US government is expected to hire between 75,000-100,000 census jobs in March, which should provide an artificial boost. Then all of the simpletons on CNBC can finally say that the job market is recovering and now is the time to buy more stocks.

My guess for Friday's number is +50k which without census hiring would be flat to negative. Many US corporations have discovered that they do not need to rehire the people they laid off during the worst of the recession. I doubt they will be so quick to rehire them now. Corporations know that the recent boost in the economy has been due to inventory restocking and will likely wait until end-user demand appears before hiring more personnel.

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Words of Wisdom from Leonardo da Vinci

1. I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.

2.Simplicity is the ultimate sophistication.

3.Life well spent is long.

4.Life is pretty simple: You do some stuff. Most fails. Some works. You do more of what works. If it works big, others quickly copy it. Then you do something else. The trick is the doing something else.

5. Marriage is like putting your hand into a bag of snakes in the hope of pulling out an eel.

Black Swan Insights

Highlights from the Non-Farm Payrolls

Preview of Friday's Non-Farm Payrolls