05/04/2009 05:12 am ET Updated May 25, 2011

The Job Report In Context

The headline number you'll be hearing is 663,000, which is from the survey of businesses (the establishment survey). The population survey (where they call households) show's a reduction in employment of 861,000 jobs, with 161,000 leaving the workforce, for a total increase in unemployment of 694,000 (you aren't counted as unemployed if you've given up looking.)

The official unemployment rate jumped from 8.1 to 8.5%.

The only sector still adding jobs is the health sector, though not by much. Goods producing workers are being hammered, taking almost half the losses despite accounting for less than a sixth of the economy. The US continues to shed precisely those jobs it needs in order to deal with its addiction to borrowing from foreigners to buy foreign produced goods.

The establishment survey is generally considered more accurate, though the household captures losses and gains of self-employed workers.

Employment is generally considered a lagging indicator, and the general consensus at this point amongst economists is that the leading indicators are beginning to turn around. I think they're calling it a bit early, but I expect that when the "recovery" does come it will initially be a jobless recovery, similar to those of the early 2000 and '90s recessions. When jobs do start to be created they will not be created fast enough, or in great enough quantities to make up the job losses, and the economy will shake apart due to inflation into the next recession long before all jobs have been regained. I wouldn't be surprised if this occurs by late 2010 or early 2011, since the actual stimulus spending is neither sufficient nor well put together.

Remember that any "recovery" won't hit you for quite some time unless you're attached somehow to the spigot of money that Bernanke and Geithner are spewing into the financial sector.

In the meantime I'd expect that we're going to see quite a few more devastating months. I wouldn't expect to see any job gains before 2010, and they won't be very large. I would, however, expect to start seeing some inflation in parts of the economy, while deflation continues in other areas.