The latest employment release was stunning, insofar as the NFP employment figure was far below consensus . Net job loss was 240K, rather than 200K; moreover, September job loss was revised upward by 125K. In addition to Jim’s assessment, some reaction is summarized here. The acceleration in net job loss is depicted in Figure 1.
Figure 1: Nonfarm payroll employment, seasonally adjusted, various releases. Source: BLS, employment situation, various releases.
Note that Figure 1 highlights, by virtue of plotting the previous vintages of employment releases, the constant downward revision of payroll employment figures. While Dash of Insight’s Jeff Miller has pointed that these revisions are small relative to the benchmark revisions will come our way, the latest revisions do seem to be getting bigger.
Justin Fox has correctly pointed out that quantitatively, net job loss in September and October is quite small, at 0.4%. Even with expected revisions, this percentage for September-October will not change substantially. Most Americans will remain employed throughout this downturn, and adjustment will occur at the margins. One of those margins is the extent to which employed Americans are working. Figure 2 depicts aggregate hours against nonfarm payroll employment, both normalized to peak values in 2007M12.
Figure 2: Log Nonfarm payroll employment, seasonally adjusted (blue) and log aggregate weekly hours index, seasonally adjusted (red), normalized to 2007M12 peak. NBER defined recession dates shaded gray. Tan shading denotes period after 07M12. Source: BLS, employment situation, November 7, 2008.
While employment has fallen 0.9% (in log terms) from peak at 07M12, aggregate hours worked have fallen 1.8%.
In terms of output, we’ve certainly had plenty of bad news. Here is the most recent take from e-forecasting.
Figure 3: Estimated log GDP from e-forecasting (blue), and from Macroeconomic Advisers (Ch.2000$). Tan shading denotes period after 07M12. Source: e-forecasting 10/16 and 11/7 releases and Macroeconomic Advisers [xls] 10/16 release.
According to e-forecasting, October GDP is declining 3.7% m/m at an annual rate (in log terms).
Here’s Bloomberg’s assessment.