Strategic Briefing | 3.8.12 | Jobs, Jobs, Jobs

Treasuries Slide Before U.S. Payrolls Report as Greek Bond Deadline Looms
Bloomberg | Mar 8
“The jobs report is key,” said Alessandro Mercuri, an interest-rate strategist at Lloyds Bank Corporate Markets in London. “The market has been telling itself over the past two months that the U.S. is not going to have a double-dip recession. If you look at the 10-year yield it seems that is has been forming a new range, a higher, much narrower one.”

Labor market shows more signs of life
Reuters | Mar 7
“After two years of expansion without much gain in employment, we’re finally hitting the point where firms need to begin adding people in order to meet increased orders,” said Steve Blitz, senior economist at ITG Investment Research in New York. “There are still risks ahead, but if you could just stop the clock right where we are now, you’ve got a recovery that is gathering some momentum; it appears to be self-reinforcing.” Economists polled by Reuters expect Friday’s report to show a gain of 210,000 in nonfarm payrolls, with a gain in the private sector of 225,000 jobs offsetting a modest decline in government jobs.
NFIB Jobs Statement: Job Creation Breaks Even in February; Hiring Plans Look Grim
Nat’l Federation of Independent Businesses | Mar 2
Chief economist for the National Federation of Independent Business (NFIB) William C. Dunkelberg, issued the following statement on the February job numbers, based on NFIB’s monthly economic survey that will be released on Tuesday, March 13, 2012. The survey was conducted in February and reflects the responses of 642 randomly-sampled NFIB members: “February was a ‘break-even’ month for job creators on Main Street. For small employers, the net change in employment per firm (seasonally adjusted) was 0.04. While this is better than January’s net zero report, it’s certainly nothing to get excited about.
Will Weather Give a Lift to February Employment Data?
Northern Trust | Mar 7
The February employment report will be published on Friday, March 9. Payroll employment rose 243,000 in January and the unemployment rate fell to 8.3% from 8.5% in December. There is a possibility that favorable weather conditions could provide a lift to employment numbers of February. The Bureau of Labor Statistics publishes data of the number absent from work due to bad weather. In 2010 and 2011, inclement weather led to people missing work and held down employment. This time around, surprisingly favorable weather could boost employment. Based on the downward trend of initial jobless claims and the likely positive weather impact, employment could show a strong reading for February. The consensus forecast is a steady unemployment rate of 8.3% and an increase of 210,000 payroll jobs. The Conference Board’s responses about labor market conditions in February point to the possibility of a decline in the unemployment rate. The number of respondents indicating that jobs are plentiful rose, while the number responding that jobs are hard to get, fell in February.
Drop in unemployment tied to aging labor force
McClatchy Newspapers | Mar 8
New research challenges the conventional wisdom that the unemployment rate is falling because workers have given up looking for a job and have exited the labor force, and the rate likely will climb again once these discouraged Americans renew their search for a job. In a March 1 report titled “Dispelling an Urban Legend,” economist Dean Maki at Barclays Capital, part of the British financial giant Barclays, argued that the size of the U.S. workforce is shrinking as aging baby boomers hit retirement age amid a sluggish economy. This — not the so-called missing workers from the labor force — may be knocking down the jobless rate faster than expected.
Three Measures of a Healthy Labor Market: A Cyclical View
Wells Fargo Economics Group | Mar 6
Looking at the data more carefully, we see several demographic trends that are also exerting downward pressure on the unemployment rate and these have several long-run implications. First, the participation rate has declined and this is consistent with the aging demographic of the baby boom. Second, a lower female participation rate is a significant turnabout from the historical trend since WWII. Lower participation rates suggest fewer labor inputs to production and, thereby, a reduction in the potential growth rate of the U.S. economy over time. This slower growth rate will put additional pressure on local, state and federal budgets that already are dealing with reduced employment and income gains in the short run. This intermingling of cyclical and secular forces require the most careful strategic choices by decision makers going forward.