Where Are the Jobs?

If non-farm payrolls continue to stair-step downward,

Barack had better start packing his stuff.

This morning the Bureau of Labor Statistics released its monthly employment report (or unemployment report, depending on whether you are a glass-is-half-full or glass-is-half-empty kind of person).  Some were disappointed by the numbers.  According to the Establishment Survey, 115,000 nonfarm jobs were added in the U.S. in April [see chart above], the lowest reading so far in 2012 and barely enough to keep up with growth in the working-age population.

The Household Survey told a grimmer story:  235,000 fewer people working at non-agricultural jobs in April compared to the month before.  And if you are not confused enough already, the BLS has another number called the Adjusted Household Survey that shows 495,000 fewer workers month to month.

Whatever the precise quantity of jobs, the quality of jobs leaves much to be desired.  Table A-8 in the household data shows 490,000 more part-time workers in all industries in April even as the overall number of workers declined.  That number is more or less consistent with a data series kept by the St. Louis Federal Reserve Bank showing a gain of 508,000 part-time workers.  The same source records a drop of 812,000 in full-time workers, the largest one-month drop in three years.

The job prospects of one Mitt Romney are soaring.


SIDEBAR:
As for the bank we love to hate, Bank of America filed its latest 10-Q with the SEC yesterday.  Click on the link and scroll down to Page 65 for management's discussion about Credit Ratings.  You will see that Moody's has warned of a possible downgrade to BofA's credit rating, the second in nine months.  The agency's review should be completed by the end of June.

When ratings drop, borrowing costs and demands for collateral rise.  Management quantifies the risk as follows:

At March 31, 2012, if the rating agencies had downgraded their long-term senior debt ratings for the Corporation or certain subsidiaries by one incremental notch, the amount of additional collateral contractually required by derivative contracts and other trading agreements would have been approximately $2.7 billion...If the agencies had downgraded their long-term senior debt ratings for these entities by a second incremental notch, an incremental $2.4 billion...would have been required.

In other words, a potential $5.1 billion loss of liquidity!