In the Long Run, We're All Temps

To judge by the one percent gain in the S&P 500 and one percent drop in the long Treasury bond (as of 11:30am, when I started writing this post), today's employment report was a positive surprise -- even if the details aren't especially pleasing, in that the improvement was not widespread. The current report still has a lot of negative numbers in it, and just a few large positive ones get us to the nearly-breakeven net loss of just 11,000 jobs. It's hard to get specific about what industries are climbing out of the trenches, because what made the report look so good is a big jump in temporary workers, but that's a logical step in the healing process, so I won't quibble with the improvement.

In the Bureau of Labor Statistics' Employment Situation's graph of monthly changes for the past two years, November is hardly noticeable:

Consider the details, though. Goods-producing jobs are still falling, and within services, the progress is concentrated in education-related jobs in the private and public sectors, and even more so in temporary workers. Exactly what those people are working on, or how they'll be doing it, we can't say.

The idea of a shrinking U.S. manufacturing sector is a familiar one, but when I took a look at the long-term history, I was surprised to see just how small it has become, both in the number and share of jobs:

After World War II, goods-producing jobs grew steadily to about 20 million, and to 25 million in the 1970s and 1980s, and have lately broken through 20 million again, on the downside. And until this recession, it has been goods-producing workers that bore the burden: service employment typically flattened out, but was able to resist falling. This time, service jobs have fallen from 116 million at their peak in December 2007 to about 112 million.

Now it's 12:30pm and the stock market has given back much of the gain. Here's a mid-day comment from The NY Times:

Lawrence Glazer, managing partner at Mayflower Advisors in Boston, said would-be stock buyers remained somewhat cautious, despite the surprising data.

"Investors are still seeing a divergence between Wall Street's gains and Main Street's malaise," he said. "The market has been anticipating better data all along. The question hasn't been 'is the market pricing in a recovery,' but 'is the market pricing in too big of a recovery.' "