And just like that, instead of praising the January jobs report, Goldman's Jan Hatzius is far more interested in pounding the table on its one scariest chart...
Given the spate of recent poor economic numbers in the U.S. and internationally, analysts are beginning to question the veracity of some of the U.S. government's economic statistics including their jobs numbers today. “The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie ...”
According to corporations themselves, there were at least 18,000 terminations in the high-paying energy sector. According to the January payrolls report, the number of Oil and Gas Extraction workers declined to 199.5K in January from 201.4K in December, a virtually non-exstant drop of 1,900 workers (and even the not seasonally adjusted, raw data shows a tiny drop of just 3.1K workers). So did the BLS choose to ignore for these thousands of jobs losses, or did it simply forget?
As already observed, when it comes to tracking the job losses in the energy space, the BLS had some rather significant "seasonally-adjusted" or otherwise issues in January, reporting just 1.9K job losses in the oil and energy exploration space, when the reality was orders of magnitude higher. But while the Bureau of Labor Services may have failed to notice the collapse of the highest-paying US jobs (after Wall Street of course), it determined that over 250K jobs were created in other sectors. Where were they?
Remember that whopping 353K jobs number in November? Well, following the data revision, it was boosted by 20% to a whopping 423K - the second biggest monthly increase in jobs in the 21st century! And breaking it more fully down, what was supposed to be a total gain of 2,952K jobs in 2014 has now been revised to 3,197K. And the best news of the day: that average weekly wage you thought you were collecting during all months of 2014? That too was just revised higher across the board.
January Payrolls Smash Expectations Rising By 257,000 As Hourly Earnings Surge Most Since November 2008Submitted by Tyler Durden on 02/06/2015 09:35 -0400
So much for expectations that January, missing on 9 out of 10 previous occasions, will miss again, as the BLS just reported that in January a whopping 257K jobs were added, far above the 228K expected, and up from December's 252K which was revised as part of the annual BLS data revision to 329K, a whopping 147K revision! The unemployment rate rose from 5.6% to 5.7%, above the 5.6% expected. But most notable, the average hourly earnings surged from last month's -0.2% by a whopping 0.5%, the highest monthly jump in average hourly earnings since November 2008. It remains to be seen just how this is happening with mass layoffs in the oil patch, but what is now practically assured is that the Fed will have no choice but to hike as soon as June.
It has been a quiet overnight session, following yesterday's epic short-squeeze driven - the biggest since 2011 - breakout in the S&P500 back to green for the year, with European trading particularly subdued as the final session of the week awaits US nonfarm payroll data, expected at 230K, Goldman cutting its estimate from 250K to 210K three days ago, and with January NFPs having a particular tendency to disappoint Wall Street estimates on 9 of the past 10. Furthermore, none of those prior 10 occasions had a massive oil-patch CapEx crunch and mass termination event: something which even the BLS will have to notice eventually. But more than the NFP number of the meaningless unemployment rate (as some 93 million Americans languish outside of the labor force), everyone will be watching the average hourly earnings, which last month tumbled -0.2% and are expected to rebound 0.3% in January.
We can certainly "hope" that the markets will continue to march endlessly higher. However, "hope" has never been an effective portfolio management strategy. Considering that the decline in oil prices is supposed to good for the consumer, even though personal spending declined in the most recently reported period, the decline in dividends will certainly have a negative effect on those depending on those dividends. The current detachment between spending and the stock market will likely be corrected rather harshly at some point.
The US chief analyst of Nordea, Johnny Bo Jakobsen, points out a curious statistical finding: in the past decade, consensus forecast over-estimated January reading on 9 out of 10 occasions. As the chart below shows, the average overoptimistic consensus miss for January is just about 50K, with the last time consensus was lower than the final result taking place in 2012, and before that, one has to go all the way back to 2003 for the second payrolls "beat".
The last time 41% of the ISM respondents, and rising, saw "lower" prices was in October 2008. We can't quite put our finger on what had just happened the month prior.
Is the BLS overstating employment growth? I guess it depends on whose data set you choose to believe. However, there is little denying the fact that with over 60% of the population living paycheck-to-paycheck, stagnant wage growth and declining net worth over the last five years, there is something that simply does not add up. If employment growth were indeed growing as strongly as in the late 90's, it would seem logical to expect that many of the disparities in the economic landscape should be starting to equalize somewhat. Unfortunately, that has yet to be the case.
Want to boost US wages across the board? Then just unionize everyone!
The Fed's own favorite mouthpiece Jon Hilsenrath (for more see "On The New York Fed's Editorial Influence Over The WSJ"), just released a piece in which he claims, or rather his sources tell him, that the Fed is "on track to start raising short-term interest rates later this year, even though long-term rates are going in the other direction amid new investor worries about weak global growth, falling oil prices and slowing consumer price inflation." In other words, just like the ECB in 2011, the Fed which has hinted previously that it will hike rates just so it has "dry powder" to ease once the US economy falls into recession, will accelerate a full-blown recession in the US when it does - if indeed Hilsenrath's source is correct and not merely trying to push the USDJPY higher (for reference, see Reuters "exclusive" report on the Samsung takeover of Blackberry, denied by both parties within hours - hike some time this summer.
There Is No Inflation (Unless You Eat Food, Use Water, Live In A House, Get Sick, Go To School, Or Do Taxes)Submitted by Tyler Durden on 01/17/2015 12:04 -0400
Government data reports are so funny. The blaring headlines today tells us that prices dropped in December. We are all saving billions from the drop in oil and gas. Hallelujah!!! The corporate MSM never digs into the numbers to get the real truth. These reports and their distribution to the sheep are designed to keep you sedated and calm. Facts are not necessary. How this data pertains to your everyday life is not important to the .1% who control the flow of information. Your government keepers will continue to drown you in propaganda and misinformation. But the average person should know they are being lied to. They see how much money they have left over at the end of every month. If any.