An abundance of excuses flew around from some of the economic profession’s biggest names.
Most of them, of course, blamed the government.
“We believe the BLS estimate is wrong,” the respected market research firm Trim Tabs flatly declared.
“We’ll see material upward revisions to the June data,” proclaimed Dennis Gartman, hedge fund manager and author of “The Gartman Letter.”
“There are a sizable number of additional people at work,” promised banking analyst Dick Bove, who released not one but two research notes over the weekend taking issue with the government’s report.
More somber tones, though, came from actual economists.
Jan Hatzius of Goldman Sachs released a lengthy analysis Friday evening that, while not specifically addressing the firm’s huge Friday miss—it projected 125,000 new jobs—confessed that one of its primary models may no longer be useful in predicting economic trends.
The upshot from Goldman’s chief economist: “The impact of financial conditions is only one input into the growth forecast, and other factors—the recent labor market data, the risk of fiscal restraint, and the renewed increase in oil prices—unfortunately look less supportive. We still expect a pickup in growth in 2011H2, but the downside risks to this view have increased.”
Perhaps no one in the economics community was more effusive than Deutsche Bank’s Joe LaVorgna, who had upped his forecast to 175,000 jobs after ADP last Wednesday said the private sector had created a startling 157,000 positions.
But after Friday’s news, LaVorgna declared a “labor lemon” and said prospects had worsened for a robust recovery.
“It is too early to throw in the towel on an expected second half recovery, but there is no doubt that a much improved labor market goes hand in hand with stronger growth,” he wrote Friday.
Asked Monday about the wide miss in jobs expectations, LaVorgna replied in an e-mail: “ADP, claims, and the employment components of the ISM surveys all pointed to a stronger number. Either the June data were an outlier, or the other series will weaken over the next month or so, confirming what we saw in June.”