First Negative Payroll Numbers in 4.5 years

Friday, 1 Feb 2008 | 9:23 AM ET

Today's payroll numbers are in and this is the first month since August 2003 that the economy shed jobs instead of adding. Total non-farm payrolls fell by 17,000. On the flip side, December's meek increase was revised up from 18,000 to 82,000. So what is the underlying trend?

Here is a chart of total non-farm payrolls. The blue line is the change in non-farm payrolls; the red is the 12 month moving avg of total non-farm payrolls. Gray band are recessions. Most interesting is the blue line - Observe the consistent pattern between recessions: There is a somewhat symmetrical upside down "u" or parabola-like curve between each recession. If this pattern plays out again, it would point to the fact that we are definitely on the downside of this hump.

Are we in a recession yet? Based on the symmetry, we may not be there just yet but the past three recessions began within months of the payroll numbers going negative.