Looking for a very bad opening and subsequent sell off in Asia and especially the euro zone as hopes of exports to the US fade leaving them no escape from their deteriorating domestic demand.

This is now the beginning of the endgame for the Euro zone, as they discover the firewall is another Maginot line that markets go through like a knife through butter.

Employers Added 120,000 Jobs in March

By Timothy R. Homan

April 6 (Bloomberg) — Hiring by American employers trailed forecasts in March, casting doubt on the vigor of the more than two-year-old economic expansion.

The 120,000 increase in payrolls reported by the Labor Department in Washington today was the smallest in five months and less than the most pessimistic estimate in a Bloomberg News survey of economists. The unemployment rate fell to 8.2 percent from 8.3 percent as people left the labor force.

Stock futures, the dollar and Treasury yields all fell as the report highlighted Federal Reserve Chairman Ben S. Bernanke’s concern that stronger economic growth is needed to keep the nation’s jobs engine humming. Today’s data also showed that Americans worked fewer hours and earned less on average per week, boding ill for the consumer spending that makes up 70 percent of the world’s largest economy.

“We see a lack of sustainability in terms of strong job growth,” Tony Crescenzi, a strategist at Pacific Investment Management Co. in Newport Beach, California, said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “This is still not strong enough to create escape velocity, which is to say an economy strong enough to make it on its own without additional monetary stimulus from the Federal Reserve.”

Among those having trouble finding work is Xander Piper, 30, who has been looking for a full-time job since September, when he completed a master’s program in social science at the University of Chicago. He decided to go to graduate school in 2010 to improve his employment prospects after losing his position at an advertising agency.

Expected Work Sooner
“When I graduated, I assumed I was going to get a job within the first couple of months,” said Piper, a San Francisco resident who said he’s looking for work in education and sometimes sends out 10 resumes a day.

“Now I work for a temp company, but even they’re having trouble staffing me,” he said. “I recently had a two to three month break at my temp company. What I have gotten recently is call center work, which is just brutal.”

A separate report today from the Fed showed consumer borrowing rose less than forecast in February, restrained by a drop in credit-card debt. Credit increased $8.7 billion, the least in four months, after an $18.6 billion gain in January.

Employment Forecasts
Employment in March was forecast to increase by 205,000, according to the median projection of 80 economists in the Bloomberg survey. Estimates ranged from increases of 175,000 to 250,000 after an initially estimated 227,000 gain the prior month.

S&P 500 futures expiring in June slumped 1.1 percent to 1,374.90 following the benchmark index’s 0.7 percent weekly loss. U.S. stock exchanges were shut for the Good Friday holiday. The dollar weakened 1 percent to 81.57 yen at 12:14 p.m. in New York, touching the lowest level since March 8. The yield on the benchmark 10-year Treasury note fell to 2.06 percent from 2.18 percent.

“We see modest growth inside the U.S. and demand for labor,” Carl Camden, president and chief executive officer of Kelly Services Inc. (KELYA) (KELYA), a Troy, Michigan-based staffing agency, said March 12 during a conference. The expansion is “a nice steady, not robust, not rock-and-roll, but a steady recovery, capable of producing a steady stream of jobs.”

Temporary Hiring
Employment at service providers increased 89,000 after a 211,000 gain in February. Professional and business service payrolls rose 31,000 last month, restrained by a 7,500 drop in temporary hiring.

J.C. Penney Co., the fourth-largest U.S. department-store company, is among employers cutting jobs. The company said today it notified about 1,000 workers, primarily in its headquarters in Plano, Texas, and its Pittsburgh customer call center, that their jobs will be cut as part of a restructuring plan.

Part of the slowdown in March may have reflected a warmer winter, which prompted some employers to hire more or retain workers in previous months than they otherwise would have, Paul Ashworth, chief U.S. economist at Capital Economics Ltd., said in an e-mail to clients. The average gain in payrolls from December through February was 246,000.

“We had mild weather, which basically had consumers in the marketplace earlier,” said Jack Kleinhenz, chief economist of the National Retail Federation, a Washington-based trade group. As a result, retailers postponed headcount reductions that typically follow the holiday shopping season, he said.

Retailers Cut Back
The March data showed a 34,000 decrease in retail employment, the biggest decline since October 2009. The Labor Department said today that the number of people unable to work due to inclement weather was 360,000 below average from December through February.

Temperatures in December through February averaged 36.8 degrees Fahrenheit (2.7 degrees Celsius), 3.9 degrees above the average in the 20th century, representing the fourth-warmest winter on record for the 48 contiguous U.S. states, according to the National Oceanic and Atmospheric Administration.

Some economists saw similarities with early 2011, when the economy slowed amid rising energy prices, a disruption of supplies caused by the tsunami in Japan and political gridlock in the U.S. over the debt ceiling.

This year, rising gasoline prices and the European debt crisis are taking a toll, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania.

19 Responses

    1. @Brian,

      Same ‘ol, same ‘ol.

      The Zero Hedge types believe that QE is “monetization”, and that the Fed has been artificially propping up the economy with said “monetization”, and that eventually the piper’s bill will come due. MMT shows us that “monetization” is a fallacy for a sovereign currecny issuer in a floating rate regime (bonds, currency, reserves: it’s all equally “money” and therefore there is nothing to “monetize”), that QE does nothing except weaken the economy by removing government interest spending (and thus aggregate demand) from the private sector, and thus it’s irrelevant.

      Unfortunately, it’s the ZH and other “hard money” types who are the true “monetary mystics”, so you will never get them to understand this.

    2. @Brian,

      I’m with Jim. This is hard to even begin arguing with, reveals some deep-seated prejudice and ignorance, and return on your time is almost certain to be negative (or ‘zero’ at best?):

      “We don’t have sufficient time to go into the nuances of what this revolutionary run-on sentence means on this good Friday, suffice to say that it makes virtually all the literature on modern monetary theory (in practice of course, the theoretical part is such gibberish that only fans of MMT and Neo-Keynesianism care about it – something nobody actually in the market gives a rat’s ass about) obsolete.”

      Consider filing ZH and its commenters under FEPO (for entertainment purposes only).

  1. “This is now the beginning of the endgame for the Euro zone, as they discover the firewall is another Maginot line that markets go through like a knife through butter.”

    Technically the Germans went AROUND the Maginot Line (and, as former DOJ attorney John Loftus disclosed, were tipped off to French battle plans by an unlikely source), but that’s hard to boil down into an analogy. :o)
    British wire tappers confirmed FBI Hoover’s suspicion that Edward, the Duke of Windsor, was a Nazi agent. After he was forced to abdicate the throne in 1936, Edward and his American wife Wallace Simpson visited Hitler and betrayed the entire plan of the “Maginot Line” to the Third Reich. A British diplomat pleaded with American investigators not to reveal that their king was a Nazi traitor.

    1. @beowulf, Preposterous! The king a nazi spy? That is so silly, like giving up the throne of england and all the benefits for a common american woman, was she a woman though? I did hear that Wallace Simpson was born a man:


      Give up the throne for– what? Apparently it wasn’t the sex. She’s credited with icily stating, “No man is allowed to touch me below the Mason-Dixon line.” There were also ugly and persistent rumors challenging her own physical endowments as a lady. Shady, unsubstantiated stories surfaced that Wallis Simpson was born a man, and suffered from Androgen Insensitivity Syndrome– a hormonal irregularity that causes a genetic male’s body to develop as a woman, but without fully developed, ….

    2. @beowulf,

      Beowulf, I presume you’re joking, but even that is rather lame joke. Center of the Universe isn’t the National Enquirer, nor the Crossville-Chronicle (Crossville, TN).

  2. Hey Warren

    Re: Re: Re: Re: Re: petition
    WE, the Residents of the City of Dallas, demand that the City Council publicly examine the banking, lending, and investment practices of financial institutions utilized by the City for the management of public funds. In addition, WE demand an examination of their home-foreclosure practices, as well as an examination of their political contributions to our local elections. Furthermore, as WE have lost confidence in so-called “Too-Big-Too-Fail” Wall Street banks, such as Bank of America, J.P. Morgan-Chase, Wells Fargo, Citigroup, Morgan Stanley, and Goldman Sachs, and effective federal regulation of U.S. financial markets, WE demand that the City make every effort possible to conduct all financial business with community owned banks and credit unions; and that the City Council establish a financial reform committee, bringing together experts and the general public, to examine ways of bringing immediate effect to these goals.

  3. the Upper Looting Class doesn’t want staff, they want serfs

    see: http://www.bloomberg.com/news/2012-04-09/worker-shortage-dogs-trail-king-as-s-d-jobs-go-begging.html

    this is all about disparity; we’ll see if “flat” population structure outdoes class-segregated populations; they always have in the past;

    so far, the path to fastest adaptive rate has been to maximize flexibility/agility/diversity in the smallest population (i.e., no class barriers);

    having less agile lower-classes on hand looks convenient one day, but is a non-scalable burden the next day;

    in any adaptive race, you’ll see a large spectrum of options tried, but the weight of model-species evidence indicates that there’s a sweet spot with tolerance limits:

    “species able to increase group agility (aka diversity/flexibility) while controlling the inter-dependency-costs that come with population size … inevitably outdo competitors”

    that’s basically why eukaryotes outdo prokaryotes, (diploid vs haploid)

    & why social species outdo solitary species (diverse teams able to rapidly combine team-behaviors greater than the sum of visible member properties)

    & why democracies outdo monarchies/aristocracies;

    & why “flat” organizations outdo hierarchical ones.

    It’s odd to see a conservative political movement develop in parallel to the “flat” organizational structure of industries like Intel (not to mention within our supposed Democracy). It’s as though business & public purpose have temporarily separated, and must re-connect.

  4. @roger erickson,

    Huge, Roger. I reposted at MNE. Plus, it’s a good argument for the MMT JG with its buffer stock of employed rather than a permanent buffer stock of unemployed running into the millions.

    Regarding conservative politics, I submit we in the West are still in the throes of Thatcherism, which is typified by her response to Hayek, “You want me to be a Whig, but I am a Tory.”

    1. @Tom Hickey,
      You mean at http://mikenormaneconomics.blogspot.com/2012/04/roger-erickson-evolutionary-scientist.html ?

      Glad it registered. It would be useful to recruit more biologists/anthropologists/sociologists to read Mosler & look into natural selection of monetary operations.

      Orthodox macro is embarrassingly out of touch. Once Krug-like subspecies can get cushy prizes & endowments for moated opinions, they don’t feel any compunction to interact or align with the real world – or be of use to their nation. Their ideology becomes their own reference.

      There’s a general natural selection rule that applies here. “The unexamined process is not worth unlimited investment.” I believe Churchill paraphrased Darwin on the same point (It’s useful to periodically see if you have any relevance).

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