Philzone.org - Philzone Phansite Community Discussion Board: Politics: Politics - Archive 2012: Fantastic Jobs Report

It's doubly good news. First, it's just objectively good news because it's, you know...a good jobs report.

Second, it affords yet another opportunity to watch the usual dingbats try to parse the numbers in such a way that it's actually bad news (although, of course, when unemployment was trending up, the same numbers were the gospel truth).

243K new jobs.
8.3% unemployment.

http://www.cnbc.com/id/46250775

A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that's not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.


Great news from today's BLS report, right (when one excludes that record 1.2 million explosion in people out of the labor force of course)? Wrong. As is well known banks have been firing workers left and right: these are the jobs that actually matter in the grand withholding taxes scheme of things. Yet someone is getting hired supposedly. Well, as we suggested before the NFP report, this is merely rotation from high paying jobs to "low-wage jobs." And no, it's not our words - this is what CRT Capital says. Per Bloomberg: About 113k of NFP gain from “low wage jobs,” David Ader, strategist at CRT Capital Group, writes in note. Additionally, “we didn’t see the drop in courier and messengers as expected - but suspect we will." Moreover, ‘‘long-term stress remains at the U6 measure at 15.1% is still high, but likely falling due to people leaving labor force, and duration on unemployment remains over 40 weeks." But yes, it is an election year, so by November expect the labor participation rate to be under 60% and the unemployment rate to drop to under 6%, or some other propaganda BS.


Sick of the BLS propaganda? Then do the following calculation with us: the US civilian non-institutional population was 242,269 in January, an increase of 1.7 million month over month: apply the long-term average labor force participation rate of 65.8% to this number (because as chart 2 below shows, people are not retiring as the popular propaganda goes: in fact labor participation in those aged 55 and over has been soaring as more and more old people have to work overtime, forget retiring), and you get 159.4 million: that is what the real labor force should be. The BLS reported one? 154.4 million: a tiny 5 million difference. Then add these people who the BLS is purposefully ignoring yet who most certainly are in dire need of labor and/or a job to the 12.758 million reported unemployed by the BLS and you get 17.776 million in real unemployed workers. What does this mean? That using just the BLS denominator in calculating the unemployed rate of 154.4 million, the real unemployment rate actually rose in January to 11.5%. Compare that with the BLS reported decline from 8.5% to 8.3%. It also means that the spread between the reported and implied unemployment rate just soared to a fresh 30 year high of 3.2%. And that is how with a calculator and just one minute of math, one strips away countless hours of BLS propaganda.


nd another major economic indicator beat, this time coming from the January Non-manufacturing ISM data, which unlike yesterday's miss in the manufacturing ISM, surged past estimates of 53.2, up from a revised 53.0 in December, to a whopping 56.8 in January. The primary reason for this was the reported jump in Employment which rose from 49.8 to 57.4, which was the biggest jump pretty much ever (see chart below), and the highest employment number since 2006. And this happened in a month in which the banking sectors laid of thousands of bankers. Brilliant. We leave it up to readers to estimate the credibility of this report. In other news, inflation is back, as the report states that "Corrugated Cartons is the only commodity reported down in price." What was up? "Airfares; Beef; Chemical Products; Chicken; Crab; Coffee (2); #1 Diesel Fuel (2); #2 Diesel Fuel (3); Fuel; Gasoline; Medical Supplies (2); Paper; Petroleum Based Products; Resin Based Products; Vehicles; and Wire." In other news, factory order missed expectations of a 1.5% increase, coming in at 1.1%. But who cares: it is an election year and the propaganda machine is on in full force.



It appears the record surge in people not in the labor force is not the only outlier in today's data. For the other one we go to the Household Data Survey (Table 9), and specifically the breakdown between Full Time and Part Time Workers (defined as those "who usually work less than 35 hours per week"). We won't spend too much time on it, as it is self-explanatory. In January, the number of Part Time workers rose by 699K, the most ever, from 27,040K to 27,739K, the third highest number in the history of this series. How about Full time jobs? They went from 113,765 to 113,845. An 80K increase. So the epic January number of 141.6 million employed, which rose by 847K at the headline level: only about 10 % of that was full time jobs: surely an indicator of the resurgent US economy... in which employers can't even afford to give their workers full time employee benefits. We can't wait for Mr. Liesman to explain how this number, too, is unadulterated hogwash, and how it too is explained away to confirm economic strength. Incidentally this is not the first time we have discussed the issue of part vs full time workers: for more see here: "Charting America's Transformation To A Part-Time Worker Society, Following 6 Straight Months Of Full Time Job Declines"



www.zerohedge.com

Blair, why do you hate America?

Why do you hate the truth?

If you want jobs in this country..there is only one place to look.

http://static8.businessinsider.com/image/4f2c0a756 bb3f7472f000025/chart.jpg


Good thing we are stopping pipelines.

The propaganda machine is in full force today. Job numbers were a farce!

That's it. Game over. Obama is getting re-elected.

if i am reading that graph correctly....

270 x 1000 people is the highest number of folks to work in that sector.

though a load of jobs, it still doesnt seem like too many jobs as a % of population, then or in the future.

what % of the pop is in service industry as a %.

>>>>That's it. Game over. Obama is getting re-elected.

oh, that did it?. have you listened to the spew coming out of the mouths in the primary land?

i dont think i single person showed up at my precinct for the primary. care not they do, when idiots pipe up with wind.

I love how the numbers are right when they're negative, wrong when they're positive.

(((Idiocy)))

Hollis, I'm inclined to agree...the Republican electorate simply doesn't really care about any of these candidates, and the whole "anyone but Obama" crowd is too insubstantial to either swing an election or inspire an electorate to turn out.

Schnee had it right...Obama wins an election with record low turnout.

Neither the fossil, wanna be Tea Party-er nor the Morman pseudo-liberal are gonna bring the Conservative Christians out in droves. Obviously the blue hairs with nothing better to do will show up, but that's pretty much all you can count on from the Repub base. Can't win a general election with JUST the Keep your government out of my Medicare crowd.

>>>>Obama wins an election with record low turnout.

these are things i am interested in, moreso than winners.

this primary in my precinct. among 415 regs Repubs, we had 18% turnout.

numbers
Gingrich - 30
Romney - 28
Santorum - 15
Paul - 13

the numbers for the 08 general are stupid, with almost 4x growth in turnout among the afri american pop in my precinct, and they hold 69% of the reg. voters in my pre.

they havent been in any regards political since(in those numbers), and i wonder if we see another DAY of political action from that growth group in this yrs general.

and also, we had record turn out among those reg/ repubs in the 08 general.

numbers are fun, and voting trends as well.

i tend to not like the folks we vote for as much as i like the dataset as a cross section of a community.

>>>Schnee had it right...Obama wins an election with record low turnout.


I'm still holding on to the landslide theory. IMO when the primary is over and the GOP runneris set, that they will wither under the accomplishments of this administration. Despite the "Anyone But Obama" crowd the President has an established record of growth and reversing the Bush era depression that we are working out of.

Obama by a landslide.

But I do think there will still be record low turn out for this elecetion overall.

grab the momentum and keep moving forward.


you are either with us or against us.

Let's see

Under bush it was mcjobs.


Now the numbers are fantastic.


Chance all you do is spin.....aside from lying.

Under bush it was mcjobs

Now these provable shit numbers are fantastic.


Chance all you do is spin....aside from lying.

Why are you so angry, Blair?

please clarify the spin here.

thanks in advance.

i had to look up mcjob.

Except with Bush we were losing the McJobs, Blair. There's a difference...

https://data.intrade.com/graphing/jsp/timeAndSales Form.jsp?contractId=743474&tradeURL=https://www.in trade.com

>>>please clarify the spin here

something to do with fewer people actually looking for work, the total amount of jobs available, the number of people that have completely removed themselves from the labor force, etc.

plus the cbo predicts another rise in unemployment during the 3rd quarter this year. just in time for the election.

just pick a spot & hold on.

If you look at the internal numbers from this report and revised numbers from November and December, it's hard to make the case that these are just McJobs.

would like to see breakdown of what areas of country were good for jobs and what types of jobs.

It appears the record surge in people not in the labor force is not the only outlier in today's data. For the other one we go to the Household Data Survey (Table 9), and specifically the breakdown between Full Time and Part Time Workers (defined as those "who usually work less than 35 hours per week"). We won't spend too much time on it, as it is self-explanatory. In January, the number of Part Time workers rose by 699K, the most ever, from 27,040K to 27,739K, the third highest number in the history of this series. How about Full time jobs? They went from 113,765 to 113,845. An 80K increase. So the epic January number of 141.6 million employed, which rose by 847K at the headline level: only about 10 % of that was full time jobs: surely an indicator of the resurgent US economy... in which employers can't even afford to give their workers full time employee benefits. We can't wait for Mr. Liesman to explain how this number, too, is unadulterated hogwash, and how it too is explained away to confirm economic strength. Incidentally this is not the first time we have discussed the issue of part vs full time workers: for more see here: "Charting America's Transformation To A Part-Time Worker Society, Following 6 Straight Months Of Full Time Job Declines"



Here are the internals...

Mcjobs.


You stayed at a holiday inn express last night?


"If you look at the internals." Lol lol.


You are such a tool.

Since there still is confusion regarding yesterday's whopping "surge" in non-farm payrolls, which represented a 243K jump in the Establishment survey (of which 490K was temp jobs, same as in the Household Survey where temp jobs soared by a record 699K), yet only to arrive at an employment number last seen ten years ago, when the US population was about 30 million lower (think about that: 30 million increase in population and no change in the total employed), here is the final explanation of what happened yesterday.

As everyone knows by now, January is when the BLS imposes its annual seasonal adjustment revision (more on that in a second) for the previous January-December period. What this manifests itself most directly in, is the divergence between the Nonadjusted January number of the establishment survey of any given year and the Unadjusted number. And while the January adjustment is always substantial, it is the fact that the so-called beat was entirely based on assumptions that makes yesterday's NFP number so meaningless, and hardly the basis to assume that the US economy has taken off.

The chart below shows the adjusted and unadjusted employment survey data for total Nonfarm Employees. The annual January overadjustment is more than evident. Just as evident are the subsequent under-adjustments as seasonal data is lowered to account for volatility in the NSA data. What is very notable is that in January, absent BLS smoothing calculation, which are nowhere in the labor force, but solely in the mind of a few BLS employees, the real economy lost 2,689,000 jobs, while net of the adjustment, it actually gained 243,000 jobs: a delta of 2,932,000 jobs based solely on statistical assumptions in an excel spreadsheet!




http://www.zerohedge.com/news/explaining-yesterday s-seasonally-adjusted-nonfarm-payroll-beat

If you want to avoid coming off as a drooling Rushbot by citing "Tyler Durden" again, read and learn: http://www.ritholtz.com/blog/2012/02/to-rush-limba ugh-a-lesson-on-the-seasonal-adjustment/

"...
While perusing various articles on the Employment Situation Summary that was released yesterday (2/3/2012), I came across this transcript from the Rush Limbaugh radio show where Rush decides essentially that we shouldn’t bother with the seasonally adjusted numbers and only look at the raw (NSA) job creation number from the Establishment Survey (likely because this number is negative and thus “bad” for Obama). What Rush says is:

“That’s part of this two and half million fewer jobs. Are you hearing me on this, folks? It is corrupt as it can be. Well, now, the wait a minute, though. There’s nothing new here in the seasonal adjustment. Normally we never talk raw numbers. Nobody ever reports or talks about raw numbers. I happened to see today the raw numbers, and little red flags are going up, my curiosity is being piqued here. And then I see that the labor force participation rate, 1.2 million people dropped out of the labor force in one month, and it happens to be December to January.”

What exactly are are these “red flags” Rush? These is a very good reason we have seasonal adjustments and more importantly, there is very good data on just how big the January adjustments typically are. What follows is is the “raw data” for January job reports going back to 1983 (the first year of the recovery from the 81 recession to pick an arbitrary date):

1983-01-01 -1667
1984-01-01 -1490
1985-01-01 -1744
1986-01-01 -1960
1987-01-01 -1966
1988-01-01 -2092
1989-01-01 -1979
1990-01-01 -2094
1991-01-01 -2550
1992-01-01 -2388
1993-01-01 -2167
1994-01-01 -2250
1995-01-01 -2309
1996-01-01 -2700
1997-01-01 -2546
1998-01-01 -2559
1999-01-01 -2755
2000-01-01 -2639
2001-01-01 -2876
2002-01-01 -2889
2003-01-01 -2685
2004-01-01 -2661
2005-01-01 -2706
2006-01-01 -2653
2007-01-01 -2794
2008-01-01 -3035
2009-01-01 -3698
2010-01-01 -2869
2011-01-01 -2858
2012-01-01 -2689

Notice a pattern here Rush? You see, every January many people get laid off regardless of underlying economic conditions. It is a very predictable and very consistent pattern (not one year with fewer than 1.49 million job losses), hence the seasonal adjustment. The BLS adjusts most months (although some adjustments are larger than others). For instance, last year, the “raw numbers” for February were +821,000 jobs, for March were +913,000 jobs, and April were +1,179,000 jobs, but obviously the seasonal adjustments took those numbers down considerably. So Rush, I am going to issue a challenge to you. I am going to challenge you to quote only the “raw numbers” for job creation every month this year, right up to the election, since you don’t trust the seasonal adjustments. I am going to take a guess and say that you won’t take me up on the challenge and instead will likely just pick and choose which number to use based on what is worse for Obama, but maybe there is a hint of journalistic integrity somewhere in your body.

Also Rush, since you decided to quote Zero Hedge regarding the “1.2 million people that dropped out of the labor force in January” (you do realize that Tyler Durden isn’t a real person right?), I have decided to correct you on that point as well since I am already writing to you. That 1.2 million increase in those not in the labor force is an adjustment that the BLS applied based on actual data from the 2010 census. Essentially, since the census provides more exact numbers on the population statistics every 10 years, the BLS adjusts their estimates that were made in the intervening period (ie 2001-2010), but since the census doesn’t break down monthly changes, the BLS simply applies the adjustment in one month (ie this January), which they clearly pointed out in the report. Conveniently, the BLS also provided a very nice table that showed what the December 2011-January 2012 change in the adjusted categories would have been without the once a decade adjustment. The actual change (without the revisions) from December to January in those “not in the labor force” was only -75,000. I wrote a post on this yesterday to correct both Zero Hedge and Rick Santelli, who made the same reading comprehension mistake that you succumbed to. And in case you just don’t want my word on it, you can go to Calculated Risk for another take on it.
..."

Here is the kicker: the market mood yesterday would have been far more somber if instead of a seasonal fudge-factored statistical addition of 2,146,000 jobs, the BLS had decided on a number that is merely the simple average of the statistical adjustment of the past 3 years, which comes down to 2,035,000. In fact, had the BLS used this seasonal adjustment, the final NFP headline number (SA) would have been +132,000, or a miss of expectations of 8,000 (the Seasonal Adjustment number to get to consensus January expectations would have to be +2,043,000 to the NFP number). In other words, the difference between a + and - 2% move in the stock market is based on less than a 5% variation to the entire January seasonal adjustment, as had the BLS add just the simple average, the BLS report would have been a disappointing miss, and the market would have likely dropped (although with 5 momos in charge of the entire market, the thesis would have likely promptly shifted to "more QE coming" so who really knows). And now you know how the BLS' seasonal adjustment, which as Charles Biderman pointed out yesterday is guarded as secretly as Coke's recipe, defined the tone and the mood of the market for at least one month.

Finally, as to some newsletter and namesdropping blogs allegation that the Labor Force did not, in fact, increase by 1.2 million in January, we have one simple question: just how does one "refute" a statement with an assumption? Because last we checked, the BLS did not provide a smoothing breakdown of how it applied its seasonal adjustment for the "population control effects" which saw the population increase by 1.7 million in January and those not in the labor force rose by 1.2 million. Quite the contrary , what the BLS did provide is Table C: "December 2011-January 2012 changes in selected labor force measures, with adjustments for population control effects" which does show how on an apples to apples basis the adjustment factors did in fact impact the two key components in determining the unemployment rate: the amount of Americans employed, and those not in the labor force.



And while one can try to say it is inconceivable to say that the US population jumped by 1.7 million in one month, we reply that this is coming from the BLS whose admission of the "population control effect" adjustment merely confirms that it has been misrepresenting the actual labor force participation rate for at least a year. In other words, while one may pander to semantics, and believe that a data series is not a data series because of one's mastery of sophistry and assumptions, this is totally irrelevant: the end result is that in January, those "not in the labor force" did in fact rise by 1.2 million (whether compared to December or to 2011 - please, go ahead and check as many times as needed), and the labor force participation rate dropped to a new 30 year low of 63.7%, a number which incidentally only has to drop by 5% more percent for the BLS to report zero, or even a negative, unemployment rate.