First Negative Payroll Numbers in 4.5 years

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.

080201 Employment.jpg

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.