Tuesday, April 24, 2012

ASA Staffing Index Highest Since 2008 for Week 16

The American Staffing Association reported its weekly index today for temporary and contract employment, with the following highlights:

1. The ASA Weekly Staffing Index increased to 91 for the week ending April 15, which was the highest reading this year, and was the highest index for any week during the month of April in four years, going back to April of 2008.

2. The index of 91 for Week 16 was an improvement of 1.84% from the previous week, and a 6.9% year-over-year gain.

3. The April reading of 91 this year was just slightly below the pre-recession index of 93 in the comparable week of 2007.  

Bottom Line: As a leading indicator of future, broader-based labor demand, the upward trend in the Staffing Index for temporary and contract employment this year, and the index's four-year high for the month of April, would suggest that conditions in the overall labor market will continue to improve going forward.  

32 Comments:

At 4/24/2012 12:54 PM, Blogger james said...

One should take a look at the quality of the jobs being created its not a pretty picture. Most of the jobs being created are low wage 42% to be exact. A report on this just came out the other day.

 
At 4/24/2012 1:04 PM, Blogger Unknown said...

A writer on Seeking Alpha noted that this index is VERY highly correlated to monthly job gains. I'll see if I can dig it up later.

 
At 4/24/2012 1:53 PM, Blogger morganovich said...

unknown-

if would have to be. this is a subset of job gains. these jobs are included in the broader number. that's like saying that m2 is highly correlated to m3.

the real question is do these jobs indicate an improving jobs environment and an upswing in full time, permanent employment.

there, the data does not look great over the last couple years.

us nonfarm payrolls were 132.8 for 3/12. there were at this same level in 2/09.

if the temp index is up 20 points from then but overall jobs are flat, how are we to look at this as a meaningful predictor of jobs creation?

if temp jobs are up a great deal since 2/09, then full time jobs must have actually dropped.

 
At 4/24/2012 3:12 PM, Blogger VangelV said...

LOL...It is not all good news...

Headlines from Zero Hedge...

Case Shiller Misses Expectations, Unadjusted Home Prices Lowest In A Decade

The US Has Finally Done It: Mexican Immigrants Become Emigrants

Apple Suffers Biggest Two-Week Drop In 39 Months

Guest Post: What Data Can We Trust?

Apple Angst As Expectations Remain Extreme

Russia And Mexico Both Buy Nearly $1 Billion Worth of Gold in March

How Much Bigger Can TARGET2 Imbalances Grow? Goldman Answers: "A Lot"

It Took The Bank Of Greece Only Three Weeks To Revise Its 2012 GDP Forecast Even Lower

Why is it that this site is always pushing 'good news' and hype while it always ignores anything that may seem to be negative? You would think that a rational person would choose to look at the whole picture and ignore the temptation to cherry pick data to only support a predetermined narrative.

 
At 4/24/2012 4:14 PM, Blogger Jon Murphy said...

It is not all good news..

I think, Vangel, Dr. Perry is providing that "other side of the coin" view. I mean, if you only read the newspapers or watch TV, you would think the US and global economies are dead and going nowhere. That, simply, is not the case. Leading economic indicators throughout the world are overtly positive. Dr. Perry is trying to bring attention to these and say "hey, just maybe this recovery is sustainable." I think, and please correct me if I am wrong, you may be interpreting this as saying "Everything is wonderful! Let's go dance in the streets!" I know I have seen written here multiple times by Dr. Perry that the recovery is slow but ongoing. That is what the economic data is telling us. It will likely remain so through 2013.

True, this has not been the V-shaped recovery we may have hoped for, but it is a recovery nonetheless. To focus on the bad is only one aspect. Besides, if the media and others are reporting on the bad, why should Dr. Perry repeat it?

There are many things one can find in this recovery to take comfort in: US Industrial Production is growing, the US Leading Indicator is overtly positive, the PMI has signaled 33 months of expansion, Retail Sales (deflated, excl autos and gas stations) are at a record level and growing, Wholesale Trade is at a record level and growing, Nondefense Capital Goods New Orders (excluding aircraft, deflated) are at record levels and growing, US Exports are at record levels and growing, US Imports are at record levels and growing, and even Housing is showing some signs of life (although the recovery in housing will likely be flat).

But then, you do have other news: home prices are awful and likely to remain so as foreclosures move through, PIIGS (Europe in general), Iran, and all the other things you mentioned (except Apple. They reported a 94% gain in profits).

What this adds up to is a slow but steady recovery.

Here's something else to consider: the last time gas prices were this high, the US slipped into a recession. Now, we are growing despite high gas prices. Just something to consider.

 
At 4/24/2012 4:58 PM, Blogger Mark J. Perry said...

Thanks Jon Murphy, you pretty much nailed it.

 
At 4/24/2012 5:40 PM, Blogger Unknown said...

"Why is it that this site is always pushing 'good news' and hype while it always ignores anything that may seem to be negative?"

Why is it that you are always pushing 'bad news' and ignoring anything that may seem to be positive?

BTW, lol at that Zerohedge article about Apple!

 
At 4/24/2012 7:53 PM, Blogger VangelV said...

I think, Vangel, Dr. Perry is providing that "other side of the coin" view. I mean, if you only read the newspapers or watch TV, you would think the US and global economies are dead and going nowhere....

Truth has no 'side.' It is what it is and spin has no place in a rational world.

That, simply, is not the case. Leading economic indicators throughout the world are overtly positive.

Really? From what I see industrial production is declining and prices are going up because of all of the money printing that we have seen from CBs trying to save foolish governments that borrowed and spent too much.

Dr. Perry is trying to bring attention to these and say "hey, just maybe this recovery is sustainable."

But he has little reliable data to support that view. It took destroying the Fed's balance sheet and pumping huge liquidity just to prevent a further collapse in nominal terms. That is not the basis of a sustained recovery.

I think, and please correct me if I am wrong, you may be interpreting this as saying "Everything is wonderful! Let's go dance in the streets!" I know I have seen written here multiple times by Dr. Perry that the recovery is slow but ongoing. That is what the economic data is telling us. It will likely remain so through 2013.

But that is not what the data is telling us. You would be lucky not to have a major collapse before the election. And let us note that does not include external pressures from unrest in the Middle East, a European collapse, a Chinese slowdown, or another crisis in South America, Africa, or Russia.

What do you think happens when everyone owns Google and Apple but the economy slows down? What happens to shale gas and oil producers who need to borrow money if liquidity dries up? Or to the FIRE economy when counter-party defaults wipe out the asset side of the balance sheets of institutions that are leveraged up like hedge funds?

None of what I bring up is novel or unknown to anyone who understands even a tiny bit about Austrian economics. Mark is a smart guy who should know better. The fact that he missed the housing bubble and is deliberately ignoring obvious issues in shale gas and the financial sector leads me to believe that he is either pushing an agenda or is not as well versed in economics as he should be.

 
At 4/24/2012 8:07 PM, Blogger VangelV said...

True, this has not been the V-shaped recovery we may have hoped for, but it is a recovery nonetheless. To focus on the bad is only one aspect. Besides, if the media and others are reporting on the bad, why should Dr. Perry repeat it?

He should report all of the data, not cherry pick data that supports a narrative not reflective of reality.

There are many things one can find in this recovery to take comfort in: US Industrial Production is growing, the US Leading Indicator is overtly positive, the PMI has signaled 33 months of expansion, Retail Sales (deflated, excl autos and gas stations) are at a record level and growing, Wholesale Trade is at a record level and growing, Nondefense Capital Goods New Orders (excluding aircraft, deflated) are at record levels and growing, US Exports are at record levels and growing, US Imports are at record levels and growing, and even Housing is showing some signs of life (although the recovery in housing will likely be flat).

As I hinted above, nominal gains are not very important. That is particularly true when they are purchased by destroying the Fed's balance sheet during an election year and engaging in massive borrowing and deficit spending.

But then, you do have other news: home prices are awful and likely to remain so as foreclosures move through, PIIGS (Europe in general), Iran, and all the other things you mentioned (except Apple. They reported a 94% gain in profits).

Apple is overbought and cannot justify its price multiples. The company is great but when everyone owns it who is left to sell to when there is a need to raise funds? (Let me note that share buybacks do not make much sense at a high multiple so there will be little help on that front.)

What this adds up to is a slow but steady recovery.

Here's something else to consider: the last time gas prices were this high, the US slipped into a recession. Now, we are growing despite high gas prices. Just something to consider.


This is typical election year manipulation and pump priming. When that ends you will see a huge collapse. If it does not you get a crackup boom. You are trapped by Scylla and Charybdis but do not seem worried even though your navigator and captain are fools. Good luck with the journey. You will need it.

 
At 4/24/2012 8:14 PM, Blogger VangelV said...

Why is it that you are always pushing 'bad news' and ignoring anything that may seem to be positive?

I am not. There are many things that I like in this economy and do not have any short positions at any time. I simply prefer to be long what is under-owned and is supported by fundamentals and to avoid what is over-owned and overpriced.

 
At 4/24/2012 8:41 PM, Blogger Jon Murphy said...

As I hinted above, nominal gains are not very important.

You are correct. That's why I was talking about deflated numbers.

You would be lucky not to have a major collapse before the election.

You seem to be pretty confident. Would you like to make a bet? I will bet you $1,000 the US economy will not decline into a recession before the election.

 
At 4/24/2012 8:44 PM, Blogger Unknown said...

Here's the article I referred to above:

The Only Surprise In Employment Numbers Is That People Are In Fact Surprised

Seems the disappointing March print doesn't quite square with his prediction, but the Jan and Feb ones sure did. Maybe we'll see a large upward revision to March.

 
At 4/24/2012 8:55 PM, Blogger Unknown said...

From the same guy (this time on his own blog), this was very interesting too!

Temp Employment UP 22% YTD
"The “sell in May” crowd “may” be in store for a disappointment (sorry for that). The theory seems to be the US economy is weakening (this is based on a couple of week’s “not great” economic data) and we are in for a repeat of ’10-’11. Isn’t this the “recency bias”? For those not familiar with it, it is the tendency of investors to extrapolate recent events into the future indefinitely. So, because the late spring/summer of the last two years was bad, ’12 will be also.

But temporary employment tells us hiring is going to increase again May/June, rail data is telling us that an increasing amount of goods are being produced and shipped, auto sales continue to beat expectations and Q1 earnings numbers are thus far better than expected.


Beyond.com concurs with his May prediction
" "Hiring demand continues to be strong," says Jim John, chief operating officer of Beyond.com, an online career network based in King of Prussia, Pa., for employers and job-seekers. He says job ads posted on his website in January (which would typically be filled in March) also suggested a slowdown in hiring after a very strong December. Since then, job postings have picked up again, rising 32 percent from February to March, which would suggest strong hiring in May."

 
At 4/25/2012 5:51 AM, Blogger VangelV said...

You are correct. That's why I was talking about deflated numbers.

But that is the problem; you are not. The BLS has been understating inflation for a very long time. If we applied the current methodology to the 1970s we would not see much inflation during that time. If we apply the previous methodology to today's data we find inflation rate running at close to 6%. This is the point that Bart has been trying to make and that is what Rogers, Faber, John Williams, and others have been making.

You seem to be pretty confident. Would you like to make a bet? I will bet you $1,000 the US economy will not decline into a recession before the election.

If we use the BLS data the US economy will look like it is improving. The problem is that it has not. John Williams shows 6% inflation using the old methodology while the BLS is showing 2%. He shows unemployment at more than 20% once the estimated long-term discouraged workers, who were defined out of official existence in 1994, are added to U-6. He shows housing starts at historically low levels even as Mark is cherry picking data to imply the beginning of a recovery in the sector. And then there is the Fed, which has made it clear that it is willing to sacrifice the long term purchasing power of the currency to 'save' the economy. If it continues to add liquidity and the BLS continues to understate inflation you can report headline numbers that show a slow growing economy. What interests me is the reality.

 
At 4/25/2012 5:56 AM, Blogger VangelV said...

Here's the article I referred to above:

The Only Surprise In Employment Numbers Is That People Are In Fact Surprised

Seems the disappointing March print doesn't quite square with his prediction, but the Jan and Feb ones sure did. Maybe we'll see a large upward revision to March.


LOL...The data is adjusted for seasonality so that the snow and cold weather are accounted for. The problem was that there was not as much snow and cold weather in January and February as previous years. That meant that the 'adjustment' overstated the 'recovery' in the labour market. But out in the real world U-6 is around 15% and when we add the seasonally adjusted long term discouraged to the picture we get 22%. That makes it look a lot like the 1970s.

 
At 4/25/2012 6:01 AM, Blogger VangelV said...

From the same guy (this time on his own blog), this was very interesting too!....

This 'guy' seems to be very ignorant of economics and the way that the data is being used. He ignored the effect of adjusting data for extreme cold and snow when there wasn't much cold or snow. He ignores the labour composition problem and the fact that increased consumer spending when consumers are broke is not a foundation for a recovery.

I have no problem with positive stories. But if you are going to use them make sure that they reflect reality and look at the big picture. All those people who got killed in the housing market bought the optimism and spin until reality intervened. Let us not repeat their error because we were too lazy to do our own thinking.

 
At 4/25/2012 6:19 AM, Blogger Jon Murphy said...

If we use the BLS data the US economy will look like it is improving.

I'm using FRB and Census data, not BLS. Regardless, I've been deflating using CPI + 4 percentage points.

Look, Vangel, if you are so convinced, then this is a sure bet for you. If a grand is too much, then let's lower the bet. %500? $100?

 
At 4/25/2012 6:20 AM, Blogger Jon Murphy said...

That should say $500, not %500

 
At 4/25/2012 6:42 AM, Blogger VangelV said...

Look, Vangel, if you are so convinced, then this is a sure bet for you. If a grand is too much, then let's lower the bet. %500? $100?

The US economy is toast. When that shows up in the data, and 4% is too little when the true inflation rate is 50% higher, is less certain. As I have written before, you should never make bets against the Fed's willingness to flood the system with liquidity and to blow up another bubble.

I suggest that you look at the Fed's message later on today. I expect it to signal the end of operation Twist but with a huge caveat that it stands ready to act as a safety net for a falling market and weakening economy. If what you said were true and the economy was sound there would be no need for such hand-holding and reassurances. In fact, the Fed would be talking about hiking rates to take away the punch bowl.

 
At 4/25/2012 9:13 AM, Blogger morganovich said...

jon-

vangel has a point there. the way the numbers are cooked, printing money looks like real growth.

making this even more pronounced, the bea has been using gdp-d's for the last 2 q's that are WAY below even CPI.

q4 used a 1.1% gdp-d vs cpi of what, 3.2? 3.4?

q3 gdp was pretty much all created by the spread between gdp-d and cpi.

so, if you think cpi is too low by a significant margin, it's actually quite easy to believe that we are in a stagnant economy/recession.

betting that the BEA figures will show this is a sucker bet. they will not. but i think vangel's point (with which i agree) is that these numbers are not doing a good job of capturing reality.

 
At 4/25/2012 9:21 AM, Blogger morganovich said...

jon-

"I'm using FRB and Census data, not BLS. Regardless, I've been deflating using CPI + 4 percentage points."

if you are using cpi + 400bp to deflate, then we are already in recession as both q3 and q4 2011 showed real contraction using that deflator.

CPI has read about 2.9% ytd.

if i am understanding you and you agree that 2.9% + 4% = 6.9% is the appropriate deflator, then i have real doubts about how you can expect positive real growth in q1 and cannot see how you got to real gdp growth in either of the last 2 q's using delfators of over 7%.

am i misunderstanding you somehow?

 
At 4/25/2012 9:31 AM, Blogger Jon Murphy said...

am i misunderstanding you somehow?

Possibly.

I am looking at the data series I mentioned above, not GDP. The reason for this is these series are monthly and the GDP is quarterly and revised too often to really be of use when looking at how things are now.

I'm also using a 12 month moving total/average (depending on what's appropriate) to smooth out seasonality, freak months, and other anomalies. Comparing the 12MMT/A to the same time last year gives me the figures I am looking at.

For example, the retail sales for the 12 months ending in March (deflated, excl. gas stations and autos) are the highest total on record and 1.9% above the same 12 month period last year.

I repeat the process using the past three months (3MMT/A) and comparing the same month to last year to get an idea of where the 12MMT/A trend is heading.

 
At 4/25/2012 9:41 AM, Blogger Jon Murphy said...

Just, for the record, I am not saying the US economy is all sunshine and ice cream. We still have a long way to go.

What I am saying, though, is the US economy will not be in a recession for 2012.

 
At 4/25/2012 9:48 AM, Blogger morganovich said...

jon-

but retail sales is not gdp.

you spoke of "recession" which has a specific definition as 2 quarters of consecutive declines in real gdp.

if we deflate nominal gdp for q3 and q4 of last year using your cpi + 400 bp deflator, then, by definition, we are already in a recession and, i would be willing to bet, will still be in q1 as i do not think nominal gdp growth in q1 will exceed 6.9%.

retail sales is not the gauge of recession, just a component of gdp.

i think you may be being a bit loose with your definitions here.

 
At 4/25/2012 9:52 AM, Blogger morganovich said...

also:

it's not clear to me to which data series you are referring. you mention frb and census as sources, but do not specify any particular series that i saw.

which ones are you using?

 
At 4/25/2012 10:04 AM, Blogger Jon Murphy said...

retail sales is not the gauge of recession, just a component of gdp.

You are correct. Retail Sales is a leading indicator for GDP.

I use Industrial Production as a substitute to GDP because it tracks coincident with GDP (When USIP rises, GDP does too and vice versa). Also, there has never been a recession in USIP that did not coincide with a recession in GDP (and vice versa).

All the things I discussed above are leading indicators. Individually, they mean nothing, but taken together they do show a picture of a slowly improving economy.

Those are also only a handful of the other indicators I could have mentioned: auto production, auto retail sales, manufacturing new orders, total industrial capacity rate. I can go on. There are so many indicators that are growing and pointing to more growth in the future than I cannot just ignore them.

Same thing on the International level. Our major trading partners, Canada and Mexico, are doing well. China is China. Japan is pulling out of their double dip. Europe is holding it together (for now).

There are just too many positive indicators to ignore. Deflate, inflate, do whatever you like, but the story remains the same.

 
At 4/25/2012 10:13 AM, Blogger Jon Murphy said...

t's not clear to me to which data series you are referring. you mention frb and census as sources, but do not specify any particular series that i saw.

which ones are you using?


Oops, sorry about that.

Most of the production stuff comes from the FRB G.17 monthly release (http://www.federalreserve.gov/releases/G17/Current/).

Retail Sales is from Census (http://www.census.gov/retail/index.html#arts)

Wholesale Trade is from Census (http://www.census.gov/wholesale/index.html)

PMI is from ISM

US LI is from the Conference Board

Probably missing some other indicators.

 
At 4/25/2012 10:15 AM, Blogger Mark J. Perry said...

Note: Two consecutive quarters of negative GDP growth might be a popular, media definition of a recession, but that's not the official economic definition of a recession, see NBER website.

 
At 4/25/2012 10:20 AM, Blogger morganovich said...

mark-

understood, but the NBER's "a recession is what the business cycle dating committee say it is" definition is not particularly useful for anyone else to use. it's just a post facto call they make.

the rest of us need somehting.

the 2 q's of consecutive real contraction definition is actually more rigorous than NBER's.

the 2001 "recession" they called never met that standard (at least using bea figures).

 
At 4/25/2012 10:58 AM, Blogger VangelV said...

I am looking at the data series I mentioned above, not GDP. The reason for this is these series are monthly and the GDP is quarterly and revised too often to really be of use when looking at how things are now.


I saw a commentary, What Data Can We Trust? this morning. It does a good job making the points that I have been making.

As the author points out, "So the numbers are gamed, massaged, adjusted... However you choose to describe it, the “headline number” of unemployment reflects political expediency, not reality." The problem is that political expediency is not useful to those wishing to protect their holdings and eventually those that buy into hype will be hurt by the reality that they fail to recognize. This is not about presenting one side or another. It is about truth as it is warts and all.

 
At 4/25/2012 11:05 AM, Blogger morganovich said...

jon-

this seems to make it very difficult to figure out how to take this bet you proposed.

we need some set standard of recession.

if you want to use a "nominal gdp deflated at cpi + 400bp" metric and "2 consecutive q's of real decline" as a recession definition, i'd take your recession bet.

it seems to me that the metrics you are using all focus on C and ignore/understate I and G etc.

i'm also not so sure about how you are getting these retail figures.

i just ran real retail sales from fred. if you add 400bp to the deflator (as i believe they use cpi but could be wrong) then there has not been a positive real monthly yoy number since sept 2011.

might be different using ttm, but even that looks like about 0 compared to a year ago and using your cpi+4 deflator.

have not run the other series yet, but it looks to me like we have been around stall speed for 6 months+.

 
At 4/25/2012 11:10 AM, Blogger VangelV said...

What I am saying, though, is the US economy will not be in a recession for 2012.

With unemployment, if we count long term discouraged workers who have given up, at more than 20% and the deflator understated by a significant amount an argument can be made that the US is still in recession. Flooding the system with money that benefits Wall Street and having government borrow as it runs record deficits is not real growth. It is time that we look at the bigger picture and answer the critics logically.

 

Post a Comment

Links to this post:

Create a Link

<< Home