So this was promised last week but I am  only getting to it now. Anywho: Lets look at a few data series. I’ll do this in separate posts to keep them readable.

Non-Farm Payrolls:  First, the big dog — the monthly payroll series. There are a couple of different ways to slice this up. When thinking about how bad this recession is compared to others, I like percentage change over the last 12-months. What we are getting here is a sense of how fast the labor market is deteriorating or improving. The 12 month time frame averages out noise and the percentage lets us get a fair comparison with the past.


A couple of things worth noting

  1. Things are bad but they are nothing compared to ghosts of recessions past. The Great Depression isn’t even on here. The payroll series begins in 1939. Contra a lot recent blogosphere musing, I don’t think the Great Moderation was an illusion. Though, it may have as much to do with structural changes in the economy as it does with good monetary policy
  2. Generally speaking once the payroll series turns around on a 12 month basis it keeps going. There is a lot of inertia in this series. You don’t see it just wildly moving up down. There’s a pretty clear cycle.

For green shoot watching we want to take a closer view and lets switch to the month-to-month percentage change.


That’s a strong upward spike and though we gave a little of it back we are still moving well relative to the local bottom. However, see that little shelf around the end of 2008, just before the series dives off? I question whether the series is headed back there and then will stall out.  There is no econometrics behind that hunch, just the sense that we were loosing jobs before the Lehman crunch, so even if we have undone the damage of Lehman does that just put us back to where we were in the middle of 2008?