THE DOT - if this turns orange or red be alert

Friday, December 4, 2009

part 2

4. Lets put the accuracy factor for the job figures to the side for a moment and concentrate on a new factor showing up - Dollar up sharply and Gold down as stock futures are up. So far the short term top works better for the Dollar ( low) and Gold but stocks I think will follow later today as the exit strategy for the FED gets into the limelight. Which is negative for the financial sector as they ride heavily leveraged the carry trade and the curve trade. The turning point will bring big distress for markets ( I do not think we arrived there anyway) as they need to make big adjustments. Reality will be that the government tries to bring retailers into a shopping mood after Thanksgiving was poor news but for now the market may assume we have reached the turning point. Lets see how it plays out over the day.

Excerpt
Payrolls in U.S. Decline 11,000; Unemployment at 10%
...
Government adjustments subtracted 91,000 jobs from the unadjusted November payroll number, about in line with the historical figure. This indicates the seasonal adjustment issue may not have played much of a role in last month’s data.
....
About 2.3 million persons were marginally attached to the labor force in November, an increase of 376,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-13.)

Among the marginally attached, there were 861,000 discouraged workers in November, up from 608,000 a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Just a little reminder as where reality is Nov . numbers not included but important is to understand the blueline - read the explanation below

Alternate Unemployment Chart

The SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

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