Jobs? What Jobs

by Larry Levin

Friday's jobs report has come and gone. Nobody wants to see a report like that again; it was bad. Of course, it was expected to be a poor report; however, it was far worse than expected and is actually accelerating. Nevertheless, the market was still playing cards with Martini in the Cuckoo's Nest - rallying throughout the day.

According to most economists the November jobs data was supposed to show a loss of 350,000. However, the actual number was a shocking loss of 533,000 jobs with an increase in the unemployment rate to 6.5%. The prior two month's of data were significantly revised lower. The jobless rate would have jumped to 7% for the month if not for the exodus of 422,000 people from the work force for any number of reasons; going back to school, retiring or simply abandoning job searches out of sheer frustration. And as I have stated in the past, when people stop looking for work, they're no longer counted in the unemployment rate. Isn't that convenient?

Some analysts predict 3 million more jobs will be lost between now and the spring of 2010 and that the GDP could stagger backward at a shocking 6% rate for the current three-month quarter.

The economy is in a free fall, said Richard Yamarone of Argus Research. It is as if someone flicked off the switch on hiring.

If the government actually did count all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. In other words, if the government didn't change how it calculated unemployment, well, that number is in the last row labeled U-6 which can be found here

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgs7AJh9CDA_Enov4IxesoUgIPdu7hL6RYJrb0PRZWkmpws1E-Pu3UfiB5_51Kpo0bJFpqGtYdIDsYIE6M04zhyphenhyphenUyP-wqHnl_lWoI6hLhGPrm-QHzSwLOYjcCcDJrGnZ1xV1CCLYUGrCxZ5/s1600-h/table-a-12-2008-11.png
The unemployment rate that most Americans "feel" now stands at 12.5%.

But the market rallied - what gives? Investors may have finally talked themselves into a low. Said another way, they believe the recent low is going to hold, so they are buying despite the bad news. If Friday's rally was a one-day wonder, we'll find out early this week. However, if it wasn't, the market may be able to put in a multi-week rally as they cheer the massive government spending that is simply kicking the can down the road.


Previous Day's Trading Room Results:

Trade Date: 12/5/08

E-Mini S&P Trades*
(before fees and commissions):

1) OTF sell @ 10:40am at 828.00 = -1.75 (1 lot)

2) TP buy @ 1:10pm at 841.50 = b/e (1 lot)

3) Algorithm positions (7)...combined daily total...-6.50

ZB (30 Year Bond) Trades*
(before fees and commissions):


1) No trades today.



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