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Message: Real Views On Today's U.S. Jobs Data
Posted below are comments from three respected economists on the most laughable U.S. jobs data issued earlier today. Too bad Mr. Obama himself could not deliver the "good" new jobs report to one of the growing lines of food stamp collectors as I am sure they would have believed him alright. The only item more laughable issued today came from Stats Canada, which stated 79,000 jobs were created in Canada in November. This would be equivalent to 790,000 jobs created in the U.S.!!! To end the comedy routine, the following link should be watched before proceeding further...
Regards - VHF
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Golden Unemployment Jibber Jabber
Max Keiser
December 4, 2009
Apparently, enough computer algorithms believe that all those losing their unemployment benefits and thus falling off the unemployment rolls and thus causing the unemployment rate to ‘contract’ is positive news that trumps the negative of the real contraction in services. By next year this time many millions more will have lost their unemployment benefits so it should get really, really ‘good.’ Yeeha! Casinos are fun!!
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An Alternative Read On Today's "Bullish" Jobs Data
Michael Panzner
December 4, 2009
Economists and stock bulls cheered this morning's better-than-expected November employment report. But was the data as good as it seemed? Consider the following:
Temporary jobs
Could the nine-month rally in share prices and the positive spin pouring out of Wall Street and Washington have encouraged some owners and managers, who are seeing little direct evidence of a rebound in the economy, to acquire what might be described as a labor call option -- that is, temporary staff (a key factor in the overall increase)?
Otherwise, temporary employees accounted for 52,400 of the hefty 86,000 jump in the professional and business services category. Might this reflect the fact that firms are temporarily taking on accountants, lawyers, and others who can help them further reduce costs (e.g., labor), restructure operations, and maybe even prepare for bankruptcy?
Long-term unemployed
Today's employment report revealed that the labor force participation rate dropped to 65%, it's lowest level in more than two decades; the number of Americans who are unemployed over 26 weeks fell to a record 3.8% of the civilian workforce; and, the "underemployment" ratio improved only marginally, to 17.2%.
Could this set of statistics be interpreted as a sign that employers don't see enough good opportunities to justify taking risks as far as hiring is concerned? In other words, are they are sticking with the safe option -- the job market's "known quantities" (e.g., those who are currently employed or who haven't been out of work too long)?
Category trends
While much of the focus was on the overall number, the breakdown by category was less reassuring. Those areas of the economy that would naturally be associated with a sustainable rebound in activity, including manufacturing, trade, transportation and utilities, and construction, are still hemorrhaging jobs.
Moreover, recent developments suggest that two categories which did see respectable gains, education and health care, face major headwinds in the period ahead. With municipal budgets under growing strain, school budgets -- and education-related hiring -- have nowhere to go but down. And with all eyes now focused on the rising cost of health care, the pressure to reign in spending will only increase.
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Trim Tabs
Charles Biderman
December 4, 2009
TrimTabs employment analysis, which uses real-time daily income tax deposits from all U.S. taxpayers to compute employment growth, estimated that the U.S. economy shed 255,000 jobs in November. This past month’s results were an improvement of only 10.2% from the 284,000 jobs lost in October.
Meanwhile, the Bureau of Labor Statistics (BLS) reported that the U.S. economy lost an astonishingly better than expected 11,000 jobs in November. In addition, the BLS revised their September and October results down a whopping 203,000 jobs, resulting in a 45% improvement over their preliminary results.
Something is not right in Kansas! Either the BLS results are wrong, our results are in error, or the truth lies somewhere in the middle.
We believe the BLS is grossly underestimating current job losses due to their flawed survey methodology. Those flaws include rigid seasonal adjustments, a mysterious birth/death adjustment, and the fact that only 40% to 60% of the BLS survey is complete by the time of the first release and subject to revision.
Seasonal adjustments are particularly problematic around the holiday season due to the large number of temporary holiday-related jobs added to payrolls in October and November which then disappear in January. In the past two months, the BLS seasonal adjustments subtracted 2.4 million jobs from the results. In January, when the seasonal adjustments are the largest of the year, the BLS will add anywhere from 2.0 to 2.3 million jobs. In our opinion, trying to glean monthly job losses numbering in the tens of thousands or even in the hundreds of thousands are lost in the enormous size of the seasonal adjustments.
In November, the BLS revised their September and October job losses down a surprising 44.5%, or 203,000 jobs. In the twelve months ending in October, the BLS revised their job loss estimates up or down by a staggering 679,000 jobs, or 13.0%. Until this past month, these revisions brought the BLS’ revised estimates to within a couple percent of TrimTabs’ original estimates.
The large divergence between the two results begs the question of what is causing the difference. While we don’t have an answer today, we will be poring over the data in an attempt to answer that question.
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