Tuesday, January 31, 2012

UBS analyst forecasts the loss of hundreds of thousands of jobs

UBS analyst Art Cashin today showed a chart on how January is historically a very bad month for job creation, and in fact, should belay the loss of hundreds of thousands of jobs now that the Christmas season is over.

Disappointing Jobs - While everyone seems to debating what the non-farm payroll numb will be Friday, a few are looking toward the annual revisions in the much debated Birth/Death model.

As you probably recall, it does not refer to the birth or death of humans. The badly named model refers to the birth and death of businesses. Each January the BLS revises the number, usually vaporizing thousands of jobs.

The Net Birth/Death (NBD) statistic adjustment – an adjustment the BLS uses to account for job creation or loss with respect to births and deaths of businesses – is always the weakest during January. Over the last five years the NBD for January has averaged -335k. [January 2011: -339k, January 2010: -427k, January2009: -356k, January 2008: -378k, January2007: -175k.] – Art Cashin via Zerohedge


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