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A +316,000 NFP Print On Friday? The BLS Seasonal Fudge Factors Make It Very Likely

Tyler Durden's picture





 

While the ADP number today of -84k was not much of a surprise to consensus, everyone is focused on this Friday's much more important NFP release, which economists expect to post the first rise in 2 years at +10,000. Yet an analysis out of Stifel Nicolaus points out that due to various seasonal adjustments, an NFP print of up to +100,000 could be expected (which incidentally does not reflect anything favorable at all about the actual employment picture as it is due exclusively to seasonal fudge factors). In fact, Stifel argues, a print of +316,000 is theoretically possible (we await Goldman's whisper leak to provide additional color). In either case, should the NFP come at that level, we fully anticipate the market will react like a stung, rabid bull, as computers buy blindly on the headlines, with no regard for the underlying adjustments.

For those who care where such an aberration of a number could come from, here is one explation courtesy of Michael Widner at Stifel, Nicolaus.

  • Any rigid predictive model will occasionally be predictably wrong.
  • We believe we are coming up on such an event with employment data.
  • We believe the jobs reports later this week and for the next few weeks will paint a rosier picture of the employment market than is expected or warranted.
  • This is driven by the interaction of how the methodology works, how seasonal adjustment factors are calculated and applied, and the specific economic condition we are currently in.
  • Non-farm payroll appears the likely big beneficiary on Friday and we see a strong chance of a +100K or better print (vs. ADP data today at -84K).
  • Thursday's claims numbers are just a precursor to next week's as this mathematical peculiarity plays out but we believe there is a reasonable likelihood of seeing reported initial claims fall below 400K and continuing claims fall below 4M in the January 14 data.
  • The issue here is that the Department of Labor's fairly rigid adjustment models assume we had the usual surge in seasonal end-of-year hiring in 2009 and that the corresponding post-Christmas and post-New Year cutbacks will follow.
  • It doesn't account for the fact that average weekly hours worked before the holidays were at an all-time low (indicating excess labor capacity), that retail shopping expectations were muted, and in general seasonal hiring was fairly low. As a result we believe it overestimates impending seasonal firings and will subtract too high a number from actual results.
  • There are additional peculiarities in the models that we believe will have predictable effects. While the non-farm payroll data oddities are less predictable we believe there is a quantifiable positive bias which suggests we should see good numbers there this month and next.

And the most relevant bit for those computers among you who only read the first 2 letters of a headline before lifting any and all offers:

  • Our point is not to try to accurately predict what the numbers will be. There is far too much uncertainty to have any confidence in doing that.
  • Rather, our point is to demonstrate that the odds are skewed toward data looking better than expectations because the methodologies at this particular juncture have a bias.
  • This is independent of any actual jobs market improvement or decline.
  • The bad news is that the adjustment models are built by definition to be zero sum across the year. So the bias toward under-reporting now will come back as over-reporting as we move into the spring and the model expects seasonal hiring rather than firing.
  • We remain highly concerned about the employment situation and expect it to weigh on economic recovery much more than usual in this cycle.

Yet while January and February numbers will likely under-report, with the launch of the census hiring, those numbers will likely offset the adjustment shifts throughout the first half of the year, painting an abnormally and transiently rosy picture for a good six months. And no, this is not artificial consumer boosting. At least not in the purest sense, as that would be illegal, even for this government. And what is going on here is perfectly legal.

Some additional information from Stifel that indicates just how the DOL's adjustment model works in various situations:

In the simplest quantitative terms the Department of Labor's seasonal adjustment model will assume 33% of this week's initial claims are seasonal and will eliminate them from the as reported number. Next week it will jump to 45%.

This is based on historical patterns that are similar but quite a bit more sophisticated than simple regressions. But their chief limitation, and thus the basis of this commentary, is that they do not take into account the specifics of current labor markets or recent employment trends.

This will likely result in initial claims reaching their highest level since last February next week while the model reports it as the lowest level in 18 months.
 
Initial claims data is distorted in two ways by the adjustment model. The first we described in the introductory bullets. The summary is that it expects a large number of seasonal firings that we believe will come in light because the model doesn't know that the corresponding seasonal hiring was light. If we had to guess we'd say this adds a weekly bias of 15K – 20K currently. But don't look for that as a w/w change as the bias started to roll in during November and will continue into February. As a result the model is understating (over-
correcting) the data each week. This effect peaks next week.
 
The second issue is that the model works using multipliers rather than additions or subtractions. Specifically it expects a 15% w/w increase on an already inflated number. Put in terms of actual jobs the model will back out 223K expected seasonal job losses from headline numbers over the next two weeks. In a more normal environment (e.g., 2003 – 2006) this would about 160K.
 
Put differently, the model assumes that when firings are already running high the seasonal component will be amplified as well. Intuitively we expect the opposite. Firms have already cut to the bone and since the seasonal hiring was modest the corresponding firings will likely also be. We expect this to add a bias of roughly 60K over the next two weeks, with most of it coming next week rather than this week.
 
All in we believe there is a high likelihood that reported initial claims will fall below 400K next week (1/14) even if the jobs market doesn't actually improve. This week is a bit less clear and we expect the reported number to actually come in fairly flat w/w and expect last week's 434K number will likely be revised higher.
 
We are fond of the following chart that shows how these issues have impacted the reported data over the past six months. The bars show actual initial claims, the line shows the as-reported figures. The reported data has shown a steady decline since July while the actual initial claims have been on a steadily rising trend. In other words people have been losing jobs at a faster and faster pace since September, but the adjustment model expected job losses to rise even faster than this and thus turns the rising trend into a falling trend.

Source: Department of Labor
 
Mathematically if the model was built to assume seasonal hiring and firing was a percentage of total employment (e.g., 1% of total employment ebbs and flows seasonally) rather than a percentage of total firings (e.g., 33% of firings this week will be assumed seasonal) the chart would tell a much different story. But it bears repeating this is a zero sum game. What the model credits us with now it will demand of us later.

The same adjustment mechanism will also wildly distort the Continuing Claims picture:

Continuing claims data suffers from the same biases as initial claims data as it is built using the same models. When unemployment claims are running high it assumes a greater number of them are attributable to seasonality. And we happen to be heading into the weeks where the highest percentage of claims will be stripped out in the name of seasonality.
 
We spent 27 consecutive weeks this year (April through October 3) with the reported continuing claims numbers in the 6M+ range. Over the next 10 weeks the number gradually declined to just under 5M. In the next two weeks we believe the adjustment model can push the figure to 4.1M and possibly produce a below 4M print in January. (At this point we expect it to rise again in the spring.)
 
There are two factors at work here. The first is the fact that individuals can only remain in the data series for 26 weeks. After that they are eliminated, even if they are still jobless and collecting benefits (which can last up to 79 weeks now). As a result the number is generally pressured lower by the fact that people are getting kicked out the back end of the data faster than they're coming in the front end, even if they're still jobless.
 
The second factor is the seasonal adjustment that suffers the same biases we discussed for initial claims. Specifically 14% of continuing claims this week will be assumed to be seasonal (up from 2% last week) and 30% of next week's claims will be assumed seasonal. This will translate into 1.2M people being erased from the headline number next week, vs. only 109K last week.
 
Mathematically if the actual number of people in the continuing claims data rises by less than 120K over the next two weeks we'll see a reported number under 4M on January 14. This would represent a huge (apparent) improvement, as we barely touched below 5M last week for the first time since last February.
 
The following chart depicts the unadjusted and adjusted ongoing claims data.
The points we want to highlight are 1) the reported data (red line) has shown steady improvement since July, 2) the unadjusted sum of people collecting benefits (continuing claims plus those on extended benefits) has actually been steadily rising and is now at an all-time peak, and 3) the disparity between these trends is about to get much wider due to the adjustment methodology. We could conceivably have nearly 11M people collecting unemployment and see the data reported as a 3.something million figure.

The bottom line to us is that we expect the headline continuing claims numbers to drop sharply over the next two weeks driven purely by the methodology.
Whether the labor market actually improves or decays at all is going to be completely swamped by the adjustment factor in our view.
 
The big issue we see is that the sharp drop in reported continuing claims seems likely to give the impression that job creation is taking off, when in fact it will actually say nothing about job creation in our view.

But most disturbing for the topic at hand, NFP, here is why the Obama administration will likely be spinning "amazing" job data for the next several months:

For the initial and continuing claims data the seasonal adjustment factors are fairly rigid and published by the Department of Labor well in advance. The non-farm payroll adjustments used to be similar in that regard, but since 2003 that has changed. The Bureau of Labor Statistics no longer publishes adjustment factors in advance, and in fact now actually derives them on the fly as the data comes in. As a result it is now much more difficult to predict how seasonal adjustments may skew the non-farm payroll data. [Thank you Beijing ministry of data dissemination]
 
That said we do know that the seasonal adjustments need to be a zero sum game over the course of the year. And we do know the range of historical adjustment factors each month. As a result we can make predictions of the likely range they are going to exhibit in any given period.
 
The following chart depicts the historical seasonal adjustment factors by month for the non-farm payroll reports since 1996, when the current model was implemented. The vertical axis reflects the monthly adjustment factor, the horizontal reflects the month of the year. First we'll explain mechanically how this works and then talk about implications.

Mechanically the Bureau of Labor Statistics (BLS) surveys business each month and asks questions about their total payroll. If the BLS could talk to every employer the simple sum of all of their employees would be the unadjusted non- farm payroll figure. Of course they only make a statistical sample of businesses, biased toward large companies, but that's an issue for another day.We run with the assumption for now that their statistical sample is accurate and each month they have a correct tally of total employees in the unadjusted result.
 
To adjust for seasonality that unadjusted result is multiplied by the numbers depicted on the following chart. When jobs are seasonally weak the multiplier is greater than one, when they're seasonally strong the multiplier is less than one.
 

 
Here is the real crux of the issue, in our view, all the market ever really reacts to is the m/m change in seasonally adjusted non-farm payroll. And that number is very heavily influenced by the m/m change in the seasonal multiplier.
 
As we said earlier, we don't know where the December multiplier is going to come out. (Chances are the BLS is still deciding that.) But looking at the data plot of the past 14 years suggests it will likely be in a reasonably narrow range.
 
The November point (end of the heavy red line in the chart) was oddly at an all-time low. Effectively the BLS attributed a higher percentage of the current workforce to seasonality last month than any time in the past 14 years. Which means they erased a record high number of people out of the headline non-farm payroll number.
 
As we look to December data (reported this Friday) if this seasonal adjustment multiple returns to anything in the range of historical norms it should provide a huge lift to the reported m/m change. In quantitative terms a return to the 1996–2008 average would create a seasonal lift of 431K to the as-reported m/ m change. In comparison the 1996–2007 actual December m/m change (unadjusted) was 116K. Put differently, if this was an average December for job creation and the adjustment factor returns to a historical average we would see a non-farm payroll print of +316K on Friday.
 
We see this as an unlikely scenario as we don't think the BLS would make that large a change to the seasonal factor and they do have discretionary control.
 
We have no way of knowing what seasonal adjustment factor the BLS will use this month but we do know that eventually this imbalance will have to balance out. (Again, seasonal adjustments must work out to a zero sum across the year.) We suspect the BLS will smooth out that seasonal adjustment imbalance over the next several months, so we may get an upward bias of say 80K this month, 100K next month, then 120K, etc. Conspiracy theorists would suggest this might be an effective way to create the illusion of steady improvement that could potentially become self sustaining. (If we believe the economy could succumb to a placebo effect.) But it bears repeating, eventually these adjustments must all sum to zero.

We won't comment on the last paragraph, safe to say that there is nothing about the current administration that would provoke us to say they may have a data-manipulation agenda. Nothing.

And, once again, to those who trade merely off headline bullets instead of ever reading between the lines, here are Stifel's concluding remarks:

Every now and then circumstances come along that in our view lead to predictable distortions in the data that will create the appearance of a trend, whether or not that trend is real. We believe we are at one of those points. What is really happening and what appears to be happening with the economy can be two very different things for a certain period of time.
 
For those inclined to trade on such anomalies we reiterate that the probability bias seems to favor employment data coming in well above consensus expectations even if the true trend is mild worsening. We expect this to last through January for claims data and likely a few additional months for non-farm payroll.
 
There is most definitely a high degree of noise in actual results but in our view the methodologies force the probability distribution heavily in favor of better than consensus headlines.
 
As a final comment we remain fairly bearish on the economic recovery despite our expectations for data to look strong in the short term.

We will provide tomorrow's Jan Hatzius' NFP estimate the second it is released. We will not be surprised if Goldman once again leaves the consensus estimate pack and ends up with a highly favorable (and mostly imaginary) number, which will be within significant digits of Friday's NFP outcome.

 


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Wed, 01/06/2010 - 19:13 | Link to Comment E pluribus unum
E pluribus unum's picture

Dow 14000by January 31st

Wed, 01/06/2010 - 19:26 | Link to Comment deadhead
deadhead's picture

why don't we just seasonally adjust the numbers up by 4 or 5 million and call the recession over and the beginning of a new dawn in America?

Wed, 01/06/2010 - 21:05 | Link to Comment Howard_Beale
Howard_Beale's picture

Well cuz then the market would sell off instantly because the FED would HAVE to raise rates!

Wed, 01/06/2010 - 21:07 | Link to Comment deadhead
deadhead's picture

I can't tell you how much I enjoy your commentary Howard!

That was a magnificent one liner and the best laugh that I've had today.

Wed, 01/06/2010 - 21:18 | Link to Comment Howard_Beale
Howard_Beale's picture

So glad to get you laughing, DH.

Thu, 01/07/2010 - 04:23 | Link to Comment A Man without Q...
A Man without Qualities's picture

This outcome is quite possible.  Market has risen over the holiday season on pretty light volume, plenty waiting at the sidelines thinking, do I go in or not.  Classic bait and switch would be a upside surprise on jobs, people buy on the news and then the market sells off on expectation of rate increases.  The crocodiles would have eaten a few wildebeest for a good start to 2010.

Wed, 01/06/2010 - 21:56 | Link to Comment Bull v. Bear
Bull v. Bear's picture

I concur, after all it is just a number, not real people say the size of Minnesota...

Thu, 01/07/2010 - 02:00 | Link to Comment WaterWings
WaterWings's picture

Create your own zip code and get freeeeee money from the Fedz!

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Pha...

Wed, 01/06/2010 - 19:29 | Link to Comment Stoploss
Stoploss's picture

Bank sector has been under accumulation. My guess is, someone knows those numbers are going to be good, or why else buy banks.

Time to get long apparrently.   Or both with tight stops.

Wed, 01/06/2010 - 21:01 | Link to Comment msorense
msorense's picture

They are alternately squeezing IYR and IYF.  Right now you can breath a bit if you own SRS but not FAZ.  In a couple more weeks it could be different. 

 

 

Thu, 01/07/2010 - 19:07 | Link to Comment Anonymous
Wed, 01/06/2010 - 19:29 | Link to Comment Heroic Couplet
Heroic Couplet's picture

Common sense: if Republican tax cuts worked to create jobs in the US, they would work immediately or, at the latest, at 26 weeks, when Unemployment Insurance (UI) ends.

There would have been no job loss under George W Bush and a Republican US Congress (2000-2006). You will never see a Republican voter figure this out, given the politics of distraction promulgated by the MSM.

Wed, 01/06/2010 - 20:02 | Link to Comment BS Inc.
BS Inc.'s picture

As far as I'm concerned, giving me a tax cut is more to let me keep my own money and do with it what I choose, not necessarily to "create jobs".

Even so, the headline unemployment rate went down while Bush was in office, last I recall.

Anyway, that's the past and the post is about the future, specifically, Friday's release and what it might show.

Thu, 01/07/2010 - 14:38 | Link to Comment Master Bates
Master Bates's picture

Yeah, I mean the actions Bush took were SO great for the economy, I don't know why any of us would question any of his policies at all.

Thu, 01/07/2010 - 00:40 | Link to Comment PierreLegrand
PierreLegrand's picture

So raising taxes is the answer? Who knew...

Fri, 01/08/2010 - 00:18 | Link to Comment baserunr
baserunr's picture

No, raising taxes is not the answer...printing money is!  I just don't understand why it took us 200+ years to figure it out! If we just print money in an endless stream, we can print our way to prosperity!

 

/sarc

Thu, 01/07/2010 - 10:45 | Link to Comment Anonymous
Thu, 01/07/2010 - 14:39 | Link to Comment Master Bates
Master Bates's picture

Thanks to the jobs situation in this country, I just may have to do that!

Thanks Dubya!

Wed, 01/06/2010 - 19:31 | Link to Comment Anonymous
Wed, 01/06/2010 - 19:47 | Link to Comment alexdg
alexdg's picture

Many would consider this as the official ending of the recession, but wouldn't it put pressure on the Fed to raise rates?

Wed, 01/06/2010 - 20:42 | Link to Comment El Hosel
El Hosel's picture

"This will likely result in initial claims reaching their highest level since last February next week while the model reports it as the lowest level in 18 months".
     

 Yeah, that is some nice modeling.

Wed, 01/06/2010 - 19:51 | Link to Comment RobotTrader
RobotTrader's picture

Sorry, I was out most of the day...

Bank stocks are still doing well........Could see some real acceleration if this proves to be a consolidation marking the midpoint of the move...

Oil Service on fire....

Coal going nuts...

Stronger retailers starting to show some life

BBBY up $3.50 after hours....

Monsanto shook off the warning last night...

Huge volume in Kraft....

AT & T, Verizon, Apple, Google were hammered today, but the commodity stocks took up the slack...

Wed, 01/06/2010 - 21:41 | Link to Comment deadhead
deadhead's picture

Sorry, I was out most of the day...

little tryst with Maxine Waters perhaps?

Wed, 01/06/2010 - 22:25 | Link to Comment Careless Whisper
Careless Whisper's picture

@ Robo   back from the dead = CIT

Wed, 01/06/2010 - 23:25 | Link to Comment Reductio ad Absurdum
Reductio ad Absurdum's picture

"Motors Liquidation Company" up 20% in 2 days. The motors liquidation business is booming!

Now all we need is an "American Liquidation Company" and our problems will be solved.

Thu, 01/07/2010 - 09:34 | Link to Comment Leo Kolivakis
Leo Kolivakis's picture

Robo was slacking off yesterday, knee deep in hookers and booze:


 

Are these the next ten baggers in the solar space? Another one that surged yesterday was Worthington, a steel company:

 

 

As for the jobs report, I don't need to read any GS report. Profits are up, ISM new orders are surging, and business investment is picking up. We'll see if they sell or buy the news. Either way, BUY THE DIPS!

Thu, 01/07/2010 - 18:43 | Link to Comment aaronvelasquez
aaronvelasquez's picture

Solars are overfunded, hence overbought, and heavily mismanaged.  The guys from a local solar company toured my plating shop with 7 or 8 people, talked big numbers and promptly shut it all down.  They were a**holes, sadly, and running on a model out of an '80s business movie.  

Wed, 01/06/2010 - 19:51 | Link to Comment perchprism
Wed, 01/06/2010 - 22:43 | Link to Comment Anonymous
Wed, 01/06/2010 - 19:59 | Link to Comment Anonymous
Thu, 01/07/2010 - 02:36 | Link to Comment bluebare
bluebare's picture

A market can stay irrational longer than you...

Thu, 01/07/2010 - 03:05 | Link to Comment hidingfromhelis
hidingfromhelis's picture

A market can stay irrational manipulated longer than you...

Wed, 01/06/2010 - 20:01 | Link to Comment Rainman
Rainman's picture

Somewhat related, speaking of employment.

Arnie coughed up a nice little hairball during his final CA State of the Disunion speech this a.m. CA State employee pension liabilities have increased 2,000 % since the turn of the century, while State revenues increased 24% for the same period.

But not to fear, current employees/pensioners are protected by "law" for the full amount. He made a plea for the madness to be cap stopped .

An absolute goatfuck for the taxpayers. I gotta' get out of here.

Wed, 01/06/2010 - 21:11 | Link to Comment aces and eights
aces and eights's picture

Yeah, and I wonder how many of those CA pensioners get out of here and head to our no-income-tax neighbor NV once they retire.

Wed, 01/06/2010 - 22:26 | Link to Comment Rainman
Rainman's picture

You are right... boogeyin' like the Haitians on boats heading for Florida.

Orange County has gone bankrupt, but never an entire State. And that appears to be what will happen in CA. Since Arnie is lameduck, he'll probably pull that default stick out of his trick bag soon .....threaten to whack the Legislature with it. He really doesn't have much choice with all the dysfunction in SAC. No sliding through '10 without a war over a $21 Billion hole, that's for sure. 

Even the FURLOUGHS have triggered a dozen lawsuits against the State demanding back wages.

It's way fukked up.

Arnie's making a case that for every dollar paid by CA residents to Uncle Sugar, only 78 cents comes back to the State in benefit. Good luck with that plea. Hey, maybe Barry, SanFran Nan, Diane and Barbie will throw the Terminator a lifesaver in his sinking hour of need. NOT !!

 

Thu, 01/07/2010 - 07:01 | Link to Comment Anonymous
Thu, 01/07/2010 - 12:14 | Link to Comment Anonymous
Thu, 01/07/2010 - 19:48 | Link to Comment Anonymous
Thu, 01/07/2010 - 11:50 | Link to Comment torabora
torabora's picture

I'm only 40 miles from Nevada in Commiefornia...Nevada is tempting but the hidden problem there is water. Unless something changes people are going to state smelling there. Water bills will approach mortgages. This is year 4 of drought.

Thu, 01/07/2010 - 11:50 | Link to Comment torabora
torabora's picture

I'm only 40 miles from Nevada in Commiefornia...Nevada is tempting but the hidden problem there is water. Unless something changes people are going to state smelling there. Water bills will approach mortgages. This is year 4 of drought.

Thu, 01/07/2010 - 08:15 | Link to Comment johnny9iron
johnny9iron's picture

I would if I were you. Life is too short to play from the rough every hole.

Wed, 01/06/2010 - 20:12 | Link to Comment Anonymous
Wed, 01/06/2010 - 20:15 | Link to Comment Jesse
Jesse's picture

 

I doubt that big of a print quite a bit.

I like my forecast of +58,000, but would not rule out on as high as +100,000.

 

Wed, 01/06/2010 - 21:03 | Link to Comment Rainman
Rainman's picture

But the more outrageous the lie.......

Wed, 01/06/2010 - 20:16 | Link to Comment Anonymous
Wed, 01/06/2010 - 20:23 | Link to Comment Racer
Racer's picture

The pyramid scam that is the Socialist States of America is really becoming obscene in the manipulation.

But I thank you greatly ZH, it is up to people like you to show the truth

Wed, 01/06/2010 - 20:35 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

This is nuts - who is hiring? No one! Bullshit.  Sorry, O.

Wed, 01/06/2010 - 21:10 | Link to Comment deadhead
deadhead's picture

true. all over upstate NY, there are literally no jobs, with the possible exception of stuff in the health field (always seem to be looking for nurses).  Even in the worst of times over the past 30 yrs that I have been watching, there were always some shit sales jobs being advertised but even those are down to close to nothing.

Thu, 01/07/2010 - 14:45 | Link to Comment Master Bates
Master Bates's picture

I live in Colorado, and I've had three job interviews this week, counting the one I have this afternoon.

People are hiring here, it's just that 19 million people are looking for jobs, so it's a bit harder to get your foot in the door.
And even harder to make an impression interviewing against people that have had 20 years experience and stuff when I haven't even been working for that long.

Wed, 01/06/2010 - 20:39 | Link to Comment QuantTrader
QuantTrader's picture

+316K!  woohoo!  ZH scoops Goldman again!

 

Bidders dont buy.  market buy orders all morning tomorrow.

Wed, 01/06/2010 - 20:42 | Link to Comment docj
docj's picture

The problem with making-up numbers, and made-up numbers are pretty much all that has been coming out of DC lately, is that they need to be "good enough" to get the desired headlines but not so good as to have Joe Mainstreet scream "BS!" at his TV set.

I'm pretty sure a +316K number would evoke the "BS!" response while +10K is certainly not nearly enough for Ostumble-and-fall to make hay from.  Something in the high 5-figure is probably going to do the trick, say +85K.

Wed, 01/06/2010 - 22:01 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:39 | Link to Comment docj
docj's picture

Well, that's of course absolutely true.  But outside of those in the know (who have no incentive to give it anything other than cursory circulation) and readers of ZH, Denninger, etc. (the whack-a-doo voices crying in the wilderness) how many people do you think are aware that actual tax receipts (income AND sales) are down something like 20% y/o/y?

5%? 1%?  Even that much?

24 is coming back on in a couple of weeks; don't triffle Oprah Nation with facts.

Wed, 01/06/2010 - 22:47 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:48 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:48 | Link to Comment Rainman
Rainman's picture

Don't forget the furlough drag on individual tax receipts. A 15% drag on tax receipts from most CA gubmint employees. Yet none counted in the unemployment figures. 

Wed, 01/06/2010 - 22:56 | Link to Comment Anonymous
Wed, 01/06/2010 - 20:44 | Link to Comment deadhead
deadhead's picture

Even after decades of being a cynic when it comes to the USA government, I am absolutely amazed at the level of lying, obfuscation, and spinning that I am seeing at this juncture.  Honestly, I cannot believe the enormous volume of lies and half truths being injected into the daily national discourse.

After centuries of bubble creation, the powers to be (Fed and US gov't complex, ably assisted by wall street) have created another bubble (acutally, an echo bubble) in an incredibly short period of time without ever having made an attempt at fixing the underlying root problems of what caused the previous bubble.

I understand (though don't agree with) what the Fed is attempting to do but as students of history they should know what the outcome will be, yet it is full speed ahead on the Titanic.

The irresponsibility of the present course of action by the Fed and US Gov't will be absolutely pounded by historians.  I just hope that I live another 10 years to read all about it.

Have any of these phucks ever given thought to the concept of telling the truth and laying all of the facts on the table? 

Our founding fathers and all the men and women who have sacrificed for the USA must be rolling over in their graves in disgust over what a piece of shit the US government has become.  Let me amend that last part by saying what a lying piece of shit.

I thought I had seen or read it all but the last 2 years is beyond surrealistic.

 

Wed, 01/06/2010 - 20:57 | Link to Comment Stoploss
Stoploss's picture

It is like a nightmare you cant wake up from, that gets worse every second. I am not so sure i want to live another 10 years, or at least here on the mainland.  Now it's just blatant fucking of everyone, " 'jus cause we can " type of bullshit.

That's ok though, the level of insanity directly corresponds to my accumulation of protective devices..

Wed, 01/06/2010 - 21:05 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

it will get better, deadhead...wait for election season.

 

i hope i live 10 more years, too. but by the late-40s/50s wasn't the reigning orthodoxy that new deal fiscal stimulus programs had saved the u.s. economy? i'm not sure how much will be worth reading yet in 10 years. maybe we'll still have zero hedge, though

Wed, 01/06/2010 - 21:18 | Link to Comment deadhead
deadhead's picture

i appreciate your words about it getting better, but I fear that this time it won't...i think the holes are too massive I am sad to say. The upcoming election season will not make a difference in my view, as most of the current crop of Repubs and Dems are pretty much more of the same old, same old, to wit, controlled by or powerless to the FIRE group.  The election season that will make a difference is the one after the American citizenry begins to show their fire, much like the civil rights movement or the anti war movement of the Nam era, etcetera. 

Obama did have some possibilities to come in and effectuate change, but he hired the same old group that got us into this mess.  I am of the thought he is well aware of this right now as he is seriously pissing off and losing his base.  The question is if he will throw out the summers, geithner, bernanke crew or not...i don't think that will happen because these guys have scared the shit out of him in terms of what could happen if he doesn't follow their advice.

I do hope that I am wrong and things get much better...I feel for my young adult children and for all those without jobs who want to work and be productive as well as the millions that have been and are still getting phucked by the Fed, Wall Street, and banking complex.

Wed, 01/06/2010 - 21:49 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

i don't mean IT will get better i.e. the economy and/or policymaking. i'm as cynical and pessimistic as the next guy about our prospects for the next 10+ years. what i meant was that the obfuscation and dark machinations of the federal government will get "better" i.e. more entertaining. sorry for the confusion

 

"unemployment" (obviously a malleable term in the eyes of the bls wonks) will tick up a couple more points, despite their careful massaging, obama's approval will plummet, banks will again come begging, etc etc. which will all lead to a very entertaining yet disturbing election season. i guess i was being sarcastic

Wed, 01/06/2010 - 21:55 | Link to Comment deadhead
deadhead's picture

got it....thx for clarification.

Agree 100% that it will be more entertaining.  I swear, guys like Stewart and Colbert have so much material handed to them everyday that they don't even need writers!

Wed, 01/06/2010 - 23:12 | Link to Comment Tethys
Tethys's picture

Well, maybe one way to think of it is that the nation, and maybe the civilized world, basically died at the end of 2008.  No fixing it, no solution to the debt and the corruption and the giant squids sucking out the last drops of lifeblood. Nothing left but Mad Max and making room for the next species to advance and take our place.

But, through the miracle of propaganda and government distortions, a few years have been added - a delay of the inevitable.  All you have to do is believe that there is no solution now, and there effectively was no solution at the end of 2008.  Then it doesn't matter that things are getting worse - all that matters is enjoying each and every one of these borrowed days to it's fullest potential.  Do all those things you put off, live in the moment - for the end is nigh.

Just a thought... I will now step away from the hookah. 

Thu, 01/07/2010 - 01:05 | Link to Comment Anonymous
Thu, 01/07/2010 - 14:48 | Link to Comment Master Bates
Master Bates's picture

The only "students of history" I know are Glenn Beck and his viewers.  They get their history from Hamburger University.

Wed, 01/06/2010 - 21:20 | Link to Comment AN0NYM0US
AN0NYM0US's picture

State of the Union address will need to have an employment win

 

therefore this Friday will be somewhat favorable so that the blow out to the upside number in February will look legit

Wed, 01/06/2010 - 21:57 | Link to Comment deadhead
deadhead's picture

Ding a ling.

Hilda: "Hello, this is Hilda Solis, Secretary of the Dept of Labor"

Rahm: "Phuck off. How come your website still says the unemployment rate is 10.0%? I told you to change it to 9.7%"

Hilda: "Rahm, I mean Mr. President, I mean Rahm, I got it down from 10.8% last month and that was a stretch. Hell, my husband is more honest about our tax situation than I was about the unemployment rate!"

Rahm: "Okay. You got a point there.  Listen, Barry has the State of the Union Prevarication and Hope fest coming up this month and we really need a good number this friday.  Can I count on you?"

Hilda: "Of course Rahm.  Even though we are still losing jobs like Democratic incumbents, I think I can justify coming up with a positive number of 50 to 100,000 in job gains.  Pretty good, huh?!!!"

Rahm: "What the phuck do you mean, pretty good?  I want to see a gain of 400,000 jobs because the stimulus worked DAMMIT!  And because health care reform is going to save us so much money, I want another 100,000 added to that.  got it?"

Hilda: "Whatever you say Mr President, I mean Rahm."

Rahm: "That's better.  Now, I see a lot of bullshit out there on those internets bitching about the so called birth death model and that you are actually going to be stupid enough to take away close to a million jobs in Feb.  THAT.IS.NOT.GOING.TO.HAPPEN."

Hilda: "And how do I do that?"

Rahm: "You lie. Phuck off and have a nice day.

Wed, 01/06/2010 - 23:06 | Link to Comment Implosion Therapy
Implosion Therapy's picture

HAHA! I just laughed so hard I almost pissed myself ! Girlfriend wants to know what could be so funny on that "economy website".

Thu, 01/07/2010 - 09:59 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

my girlfriend tells me i "have a problem"

Wed, 01/06/2010 - 23:29 | Link to Comment Anonymous
Thu, 01/07/2010 - 01:26 | Link to Comment Howard_Beale
Howard_Beale's picture

...(sound of "24" telephone)

Barry: "Rahm, Hildy just called and was a bit upset."

Rahm: "Why? She is taking her estrogen isn't she?"

Barry: "You know we put it in her morning juice and double dose her on NFP week--it was your idea. It does keeps her juicy when we need her to be upbeat. But Rahm, she claims you told her to fuck off and have a nice day. You are really pushing the old broad a little hard."

Rahm: "I'm absolutely positive I just told her to fuck off and lie "(heavy breathing in the background). "Have a nice day may have slipped out...I was listening to that Bon Jovi album over the holidays."

Barry: "Well it's that kind of manipulation that gets her panties in a twist. She can handle what we decide for the numbers but when you go telling her to have a nice day, she forgets everything else you said before. She's not used to that from you. I don't have time for this micromanagement, Rahm."

Rahm: "Hey Barry, you want the job done or not?" (heavy breathing is starting to get louder)

Barry: "Rahm, are you having sex?"

Rahm: "Who do you think I am? Bill Clinton? Define sex."

Barry: "Ok...we need to get this straightened out and Hildy needs to be ON on Friday--I need her to keep up the recovery talk and be wiggling with joy. So do me a favor, call her back and just tell her the number. The boys at BLS can reverse engineer anything."  

Rahm: "No problem, big guy. I'll take care of it. I'll bang her again if I have to..."

Barry: "I know you'll do what you have to do. And I don't care what it is, so please, in the future, spare me the image."

Rahm: "Have a nice night."

Barry: "What's that supposed to mean?"

........

Thu, 01/07/2010 - 09:59 | Link to Comment deadhead
deadhead's picture

Great way to start the day Howard!  Laughing my stones off with my morning coffee.

 

the big laugh of the day could be the enormous Fed buying of bank stocks that started a few days ago! 

Thu, 01/07/2010 - 07:30 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

+1 love the phone call transcripts

Wed, 01/06/2010 - 21:34 | Link to Comment Anonymous
Wed, 01/06/2010 - 21:35 | Link to Comment QuantTrader
QuantTrader's picture

what about the absurd birth/death adjustment?  why dont they just report raw figures?

Wed, 01/06/2010 - 21:41 | Link to Comment buzzsaw99
buzzsaw99's picture

Barry-O = Balloon Boy

Hoax me Barry-O

http://www.youtube.com/watch?v=YEkGqb2wu5k

 

Wed, 01/06/2010 - 21:58 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:04 | Link to Comment glenlloyd
glenlloyd's picture

Well...regardless of how the number comes in, what now they give later on they must take away.

Wed, 01/06/2010 - 22:07 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:11 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:34 | Link to Comment A_MacLaren
A_MacLaren's picture

The Bureau of Lying Statistics has, have and will be one of the most politically influenced manipulators of data constantly seeking to obliterate the truth.  Thank goodness for guys like John Williams and the truth teller/model dimantlers like Michael Widner at Stifel, Nicolaus.

Considering the CONfidence imperative of TPTB standing behind the corrupt oligarchic triumveret of chrony corporatism, washington whitewashes and wall street wizardry, the truth will not emerge, until TPTB intend to use it to psychologically crush what remains of the middle, upper middle and lower ranks of the upper classes.  The sheeple can't handle the truth. 

Useless eaters will now report to FEMA camps for indoctrination and re-education.  Debt-slaves are to continue their labors until summoned.  Those espousing views contrary to the State are hereby declared enemy thought combatants and will be dealt with accordingly, when captured.  Your life and labors always were theirs, or so at least They think...

Fight back by starving the beast.  Quit playing their game.  Re-localize.

Pay off your debts and remain individually debt free.

Accumulate real life sustaining property and assets.

Educate others.  End the Fed.  Re-elect No Incumbant.

 

Wed, 01/06/2010 - 23:31 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:39 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:43 | Link to Comment Anonymous
Wed, 01/06/2010 - 22:45 | Link to Comment Anonymous
Thu, 01/07/2010 - 00:59 | Link to Comment Anonymous
Thu, 01/07/2010 - 01:55 | Link to Comment Cursive
Cursive's picture

Steve Liesman's head is swimming right now.  I'm sure he'll explain all of this when the time comes.  Surprised the article didn't mention the February adjustment for Birth/Death.

Thu, 01/07/2010 - 02:46 | Link to Comment MichaelC
MichaelC's picture

The 2nd Jan 2010 seasonal adjustment factor is 148.9.

So if unadjusted claims are 550,000, the SA claims will be 369,375

The 9th Jan 2010 seasonal adjustment factor is 180.6.

So if unadjusted claims are 550,000, the SA claims will be 304,540

similiarly if unadjusted Insured Unemployed remains the same:

2nd Jan - Adj factor 130.3 making continuing claims 3,906,870

9th Jan - Adj factor 124.3 making continuing claims 4,095,456

 

 

Thu, 01/07/2010 - 06:28 | Link to Comment Anonymous
Thu, 01/07/2010 - 06:13 | Link to Comment MiningJunkie
MiningJunkie's picture

Just go read "Atlas Shrugged" again and again and again and it all becomes quite clear and rational. The People's State of America is alive and well...

Thu, 01/07/2010 - 08:14 | Link to Comment Donlast
Donlast's picture

 

Tyler.

Why not keep updating on a regular basis your Jan 1 article on total unemployment understated by 32%. Follow the Treasury data on monthly payments to the unemployed and release the update just before the payrolls number.  Assuming it goes on steadily rising it will belie any false statistical improvement in the labour situation.

 

Thu, 01/07/2010 - 11:05 | Link to Comment Anonymous
Thu, 01/07/2010 - 11:08 | Link to Comment Anonymous
Thu, 01/07/2010 - 11:38 | Link to Comment Anonymous
Thu, 01/07/2010 - 12:24 | Link to Comment Anonymous
Thu, 01/07/2010 - 12:33 | Link to Comment Anonymous
Thu, 01/07/2010 - 12:49 | Link to Comment Anonymous
Fri, 01/08/2010 - 09:54 | Link to Comment Anonymous
Fri, 01/08/2010 - 10:06 | Link to Comment loup garou
loup garou's picture

I'll just trade the market, and leave the asinine soothsaying to the asinine soothsaying industry.

Fri, 01/08/2010 - 10:59 | Link to Comment Anonymous
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isolinx's picture

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