January 7, 2011 at 6:01 PM
Well, as I predicted on Wednesday, the ADP report turned out to be Another Dubious Prediction. The establishment survey from the Bureau of Labor Statistics showed that the U.S. created just 103k NFP jobs in December. The unemployment rate dropped, as measured from the household survey, from 9.8% to 9.4%. But before you break out the champagne, it should be noted that the workforce shrank by 260k, thus lowering that rate because those erstwhile jobseekers have given up the fight.
The average workweek remained unchanged at 34.3 hours and the average hourly earnings ticked up by just .1%. Most importantly, the number of goods-producing jobs actually declined by 2k. Therefore, not only are the number of new jobs being created woefully inadequate to satisfy population growth but the type of jobs being filled are completely opposite of what we need to balance our trade deficit and increase the nation’s wealth.
This was a very substandard report, especially given how far we are supposed to be along in this “recovery”. Apparently, any talk of Bernanke not finishing QEII was grossly premature. And, consequently, the selloff in precious metals and commodities was dramatically overdone.