New orders for manufactured goods in August, down following four consecutive monthly increases, decreased $2.8 billion or 0.8 percent to $352.9 billion, the U.S. Census Bureau reported today. This followed a 1.4 percent July increase. Excluding transportation, new orders increased 0.4 percent.
More bad news on new orders for durable goods, down 2.6%:
The headline September unemployment numbers were bad.
Payrolls dropped by 263,000 in September, exceeding the median forecast in Bloomberg’s survey, with losses extending from cash-strapped state and local governments to retailers to builders, today’s report showed. The jobless rate rose to 9.8 percent from 9.7 percent in August, while working hours matched a record low.
This is bad news across the board, and far worse than the numbers the markets expected yesterday. However, these reports dramatically understate just how bad the real numbers were.
For example, if you looked at the non-seasonally adjusted numbers, the labor force shrank by 1,280,000 in a single month! The participation rate in the workforce fell from 65.6% to 65.0%.
The September 2009 ISM manufacturing report PMI came in at 52.6% with new orders, production increasing, but the all important inventories are still contracting, supplier deliveries slower and unemployment still increasing. The overall PMI is slightly down from last month but still way above 41.2%, which is the inflection point between expansion and contraction.
This is from a quote from Mervyn King, Governor of the Bank of England. Here is the full quote:
It's the level, stupid -- it's not the growth rates, it's the levels that matter here
I got this quote from reading Mohamed El-Erian's article in the Financial Times. Dr. El-Erian coined the phrase the "New Normal" for economic growth. While I agree with his conclusion, I don't entirely agree with his analysis for the "New Normal".
The BLS released the metropolitan unemployment rate and every city in the United States show their ranks of the jobless swell.
Unemployment rates were higher in August than a year earlier in all 372 metropolitan areas, the U.S. Bureau of Labor Statistics reported today. Sixteen areas recorded jobless rates of at least 15.0 percent, while 9 areas registered rates below 5.0 percent. The national unemployment rate in August was 9.6 percent, not seasonally adjusted, up from 6.1 percent a year earlier. Among the 369 metropolitan areas for which nonfarm payroll employment data were available, 356 areas reported over-the-year decreases in payroll employment, 11 reported increases, and 2 had no change.
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