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Job growth and economic improvement are for REAL
Just a few thoughts and facts before the employment report for March is out. No time like just before the report to issue some thoughts so that the next day you can be shown to be horribly wrong, but here it goes.
I see on ZH a lot of antipathy for government data especially on jobs. Interestingly this week a number NON GOVERNMENT reports have been very up-beat
The ADP, a well-known private sector report based on a blown up sample from actual data from a payroll-services company continues to pour out evidence of over 200K jobs per month being created.
Private sector source…
The Challenger Gray and Christmas issue a report that looks at firms’ announced corporate layoffs from notices (medium-sized and larger) firms are required to post each month. The report for March shows us the 16th lowest announced corporate layoffs in March among the last 19 Marches. Since data are NOT seasonally adjusted (some of you will like this report even more because of that) this is an objective way to assess its strength/weakness. This lay off indicator is low.
Private sector source…
A Bloomberg Survey on consumer comfort has just shot up this week to show a one week increase in ‘consumer comfort’ with a jump so large that it occurs less than 6% of the time. In this weekly series going back to 1986 the 17-week change in the Bloomberg index has been surpassed only three other times (all of these were the product of the same 1998 episode). This is a twice in a 25-yeear experience.
Private sector source…
So put it together and SOMETHING is happening.
For those who belong to that shadowy group ‘weather-o-nomics’, yes weather has had an impact on data but it has had pluses and minuses- try talking to someone who runs a ski resort or a winter lodge business. I think the weather thing is overplayed for its impact.
On balance the big problem we do not seem to ever to be able to agree on is unemployment and this fine. We can all have our own favorite measure. Just be sure to plot it back in time and to compare today’s figures with the same definition and its higher numbers at all points in the past.
Everything is relative here.
I am encouraged that the ADP shows that private small services businesses have brought their employment levels back up to where they were Pre-Recession. Some small businesses are making great strides; some are not..
Of course the goods sector is challenged. Despite some good-looking recent MFG reports recently, the fact is that although the calendar year of 2011 was the first year in a decade in which MFG gained jobs the sector is lagging woefully behind in creating jobs in this recovery cycle.
The job market is a hodge-podge and it is not in good shape but it is improving. The improvement is quite good compared to what had been in train, previously. There is a long way to go. But let’s recognize progress without being satisfied by it.
And we’ll see if the ‘official report’ reflects that progress tomorrow. I expect it will. Also note that two government surveys one of firms’ payrolls and the other from the more inclusive household survey are showing job growth that is in step with the private sector ADP report.
Stay tuned for a 240K sort of gain in Private jobs for March.
Remember do not ever forecast a job number unless you are prepared to be wrong. There is nothing that breeds humility like making a forecast.
Well posting comments on ZH…and reading the blow-back is right up there.
Good luck any of you market junkies that bet on this number.
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No its not.
If we don't look at where we've come from, how we got here and where we're going, we'll crash again. I've given you the benefit of the doubt and never commented, but you seem rather pollyannish.
One man can't do the work of three forever.
RobertBrusca
http://www.zerohedge.com/contributed/2012-14-05/job-growth-and-economic-...
Job growth and economic improvement are for REAL
"horribly wrong"
Comment:
I've shortened and corrected the entire article for you for free. No Thanks required.
Well written!
Very funny, thank you for the chuckles. I agree 100% with your revised article!
thank you
Unemployment and economic improvement, are these together and why?
Unemployment rate is dependent upon a few databases that can be manipulated. The rate may indeed be declining but the numbers in the databases are adjusted as well. Individuals for whom there are no jobs -- rather than being hired -- are not considered unemployed: this does not inspire confidence in the databases.
Politicians/managers have too much to gain by lying.
Is the eccnomy improving? By what metric? Are real estate prices increasing? Are gasoline prices decreasing? Isn't 'improving buth vague and subjective?
Both sets of 'data' have been adjusted by interested parties to the point of meaninglessness. A better way to look at the economy is to measure how many industries are succeeding without them having to borrow.
Otherwise, the economy is hopeless. It will never improve, only die taking the humans with it. Better look for a place to hide.
Zactly. Look at the labor force participation rate if you want a truer picture of labor market dynamics. Although the numerator is subject to fudging (since it's the sum of the number employed--harder but not impossible to fudge--and the number of unemployed--more easily fudged), its denominator (the working age population) is less subject to gross manipulation.
The LFPR, as ZH has pointed out in several articles, has plunged to 30+ year lows and remains there. It has tried to get off the mat several times in 2010 and 2011, but cannot. It cannot b/c (a) the working age population continues to grow (raising the denominator and thereby lowering the LFPR) AND (b) people keep getting "defined out" of the labor force (lowering the numerator and thereby the LFPR).
So go ahead and believe in one month's (likely fudged) number if you want, Brusca and place your bets accordingly. In fact, I suspect you'll be right, it probably will be good; but your follow-on conclusion--that it means the economy is on the mend--is highly suspect if not outright absurd.
SIN-ICK!
Whether Brusca is right or not is irrelevant.
Employment is a ridiculous metric and if you think that the world will be better with more employment or that it is a sign of a healthy economy you are nuts. There really is no correlation with the health of an economy and employment.
Soon we will have our own Foxcons and employment will be 6% and you all can rejoice.
Employment is a ploy whether used through mal intent or stpidity to get people's eyes off the real prize which is wealth. While everyone here i sranting about employment up or down the wealth of every working American is being destroyed and in the name of what "full employment"
Exactly, our look at 'economic improvement' based upon job statistics could mean this country only has 10 workers left, and 1 of them delivered a pizza so we've got 10% 'job growth' as a result....totaly meaningless in reality.
I know of 31 plus people applying for 1 Teller job that opened up about a week ago. It pays $11 and change starting out. That's a raw un-manipulated piece of datum that tells me all I need to know about the job non-recovery.
You need a better circle of friends
OH now Robert busts out his hoity-toity arrogance? Youre better than us? How so, tell us please how you played your guestimates in this article?
I know of a job opening with 31 people applying. I don't know the 31 people personally, jackass. But even if I did, I'm sure every one of them would be a better person than you.
Spoken like an elitist.
Food stamp usage up and gas demand down does not support your position.
GM channel stuffing, ever increasing inventory levels and seasonal retail might, however, this inventory doesn't seem to be moving. Bottom line there is very little demand and those that do find employment are earning much less. I guess when you throw x trillion at a problem you can expect some improvement but bottom line it's just another government created bubble ready to burst.
robert brusca
gets a gig here on ZH writing the out line of political talking points
his temporary 12.00 an hour write up is classified as three jobs
1) blog
2) defending blog
3) falling off job rolls
unemployment goes down
The major market indexes lead the economy by about 3 months, not the other way around.
Have look at the S&P500 weekly's. See the move up over the last few months - that's what you are feeling.
Volume during this period was anaemic - very typical of a corrective pattern in a bearish market.
http://www.bullandbearmash.com/latest/sp-500/weekly/
I understand TrimTabs (Biederman) He has numbers that can't befudged and are not nearly as derivative. I suppose there could be some gain in employment, short term...and lousy jobs...but the big picture of collapsing banks around the world, money being created in gobs....these facts make me say 'so what'.
Our economy is screwed and we are all gunna die (financially)...
NFIB numbers are not so upbeat for March either.
National Federation of Independent Businesses
Robert - This is more of blue pill vs. red pill stuff. You are not going to get one inch at ZH when you write from a blue pill perspective. Have you read Black Swan? I cannot remember if I started reading ZH first or the Black Swan, but they are both about living in the real world that nature built for us. The author used averaged height to give an example of distributions that are bell shaped. He stated you can sample pretty much any 1000 people and your average height will be close to the real average globally. Then he said sample the income of 1000 people. This is not a bell shape curve and to forecast anything for these types of samples is just plain stupid. Then he goes on a rant about empty suits and economists that I cannot argue against. Everything in a blue pill world is in a bell-shape curve and outliers are thrown out. I would call it fraud, but it is called research for some unknown reason. The red pill world is the world nature built for us. It has power rules like 80-20 and fractals that are nearly impossible to put into a bell shape curve. The real important question is asked.....does a complex adaptive system live in a bell shaped world or this other world that the author called type 2? You decide. The author cites losses in banks over history to make his point. He did not cite 2007 as the first edition of the book was published before 2007.
The other point he makes is the narrative. Blue pill writing is supporting a narrative and you will be criticized at ZH when you continue to write to support a narrative and throw out outliers. ADP data is just one of these items that does not belong in a bell shaped curve and is a part of a complex adaptive system. They are also not trusted here at ZH, or at least I do not trust them. They look too much like BLS numbers. When you make statements like economists from both parties are at BLS trying to adjust seasonally, this is narrative type writing. You will get push back. Blow back means something else here...usually with CIA also included in the sentence.
I am impressed you take time to answer comments. Keep the good fight up and we will continue to disagree with you. I watched fight club over this last weekend. ZH for me is like an intellectual street fight!!!
Quote of this great movie:
"Man, I see in fight club the strongest and smartest men who've ever lived. I see all this potential, and I see squandering. God damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don't need. We're the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War's a spiritual war... our Great Depression is our lives. We've all been raised on television to believe that one day we'd all be millionaires, and movie gods, and rock stars. But we won't. And we're slowly learning that fact. And we're very, very pissed off."
Yes. Liked the Book; assigned it to my class.
Some interesting points. Different perspective on a lot of issues.
But if the world is not Gaussian it still exists.
There are still lots of metrics we look that we can make sense of. BS (unfortunate acronym) is not a rejection of economic theory but of empirical market analysis.
But who cares? Nobody here likes anybody's numbers so why worry what what the doggone distributions look like!
Just make it all up!
BS is about fat tails all too many of these comments are about fat heads- not yours. You have something significant to say.
Thanks for being serious.
Interesting that you have read the book. After I read "Confessions of an Economic Hit Man" and "The Black Swam" my views about the MSM (Main Stream Media) and my business school education went very negative to say the least. The international finance and economic theory went out the window. My dad also read the "ECHM" book and was a few hours shy of a PhD in international finance when he was still a spring chicken. He could not finish the book he was so upset. One's mind opens in bear markets and mine has become wide open with ZH and numerous readings/youtube videos that I have seen in the comments section of ZH. I am passing a few along.
Are humans smarter than yeast?
http://www.youtube.com/watch?v=hM1x4RljmnE
Century Of the Self
http://www.youtube.com/watch?v=lhxfArTAcfM
http://www.youtube.com/watch?v=3dKhODjUqGU
http://www.youtube.com/watch?v=cCu1jBLbthk
http://www.youtube.com/watch?v=3IBGgWLF5qE
Your quotes: "It still exists" and "empirical market analysis". I have to wonder, what does one do with these types of numbers besides make forecasts. I find them meaningless unless I am going to take the opposite side of a trade and still think there are a lot people who take these number seriously. It is bread and circus for smart people and the parasites win most of the time taking the other side. What I do find interesting is capital formation/capital flows and recently came to a conclusion that a community that creates the capital and is able to keep the capital in their complex adaptive system will more than likely have a good standard of living. I also think rule of law also has a high correlation to this as well. Again, these are my thoughts based on speculation. I am still coming at this from a trading perspective which is a zero sum gain type transaction. The better way to look at all these complex adaptive systems is capital formation and capital flows and how many of these transactions benefit the community as a whole. These are not broken windows in my view.
One last link: The Secret of OZ
http://www.youtube.com/watch?v=7qIhDdST27g
Not sure what to make of this yet as I am still giving it some deep thought. The one thing I found interesting is the idea of the bank for the community in North or South Dakota. I cannot remember which state. It was somewhere out west. The capital formation process takes place in this state and the capital stays in the community's system to finance the next set of projects or the next truck of cars etc. They have a healthy economy.
Do you read Martin Armstrong? He has some interesting views on capital formation and capital flows.
When I put all these competing ideas in place, I try to ignore the bread and circus for smart people unless I am being a parasite that day and trading against it.
I am reminded of the old joke where a company goes through several applicants for an accounting position, asking each candidate what 2+2 equals, and hiring the candidate who responds with, "What do you want it to be?"
A few thoughts: the numbers are suspect at best; at some point you run out of people to lay off, so of course initial claims are decreasing; after you've been down so long, just about anything will look up to you.
Claims are decreasing at a decreasing rate...
data not all roses
data do not get revised for lying. Republicans do not revise Democrat's data and vice-versa.
??
There's lying, and then there's statistical adjustment after the fact to better potray reality. Granted, it could be for a number of reasons. Two researchers just "corrected" the civil war death toll upward by 20%'... I doubt the original counters had complete info ... In today"s info-rich world, it would be to hide the bodies.
they have a gentlemans agreement. airing dirty laundry sets a bad precedent
My suggestion...put down the Bong:
Penney cuts 600 workers, 13 percent of HQ staffThe mid-priced department store chain said Thursday that it has laid off 600 workers, or 13 percent of the staff at its headquarters in Plano, Texas, as the company looks to streamline its operations amid a major reinvention of the business.
http://www.sacbee.com/2012/04/05/4393536/penney-cuts-600-workers-13-perc...
Read more here: http://www.sacbee.com/2012/04/05/4393536/penney-cuts-600-workers-13-perc...I don;t think I'm going to miss Penny's or Buggy Whips.
Come on.
Instead of your fairly unwitty retorts respond to Biderman's claims and analysis of lower income tax receipts?
And just who is buying all those new cars cause I sure don't see them driving around Los Angeles. I do see dealerships closing left and right. There must be an alternate universe of people getting good jobs and buying new cars however I am unable to see it but obviously RB can.
I suspect LA and California in general are showing the signs. Massachusetts is one place new trucks are selling, and cars as well. Of course, Massachusetts is one of those places that has benefited from the surge in higher education over the years, and is not as dependent as other states on the "working" economy. If education funding dries up, and students won't go into debt for an education, we'll start to see more of the effects here as well.
Real estate is still stuck at down 30% with no signs of moving; unemployment is stagnating, but below the national average. It really is hard to "get a feel" for how the economy's really doing without touring different regions of the country regularly. So I guess you rely on the numbers and a bag of salt to take them with.
Personally, I think Brusca's whistling in the dark on this. Globally there does not seem to be much better news than domestically. Whether the US is the chicken or the egg hardly matters...
And even more to the point of refuting Robert's arguement . . . .
US tax revenues have been declining for the past three years and continue to decline.
With no upturn in sight.
How are all those newly-created minimum-wage jobs working out for you?
Hint, hint:
Look through the WINDSHIELD on the front of the car, not the rear view mirror!
So, why do you post about a lagging indicator ?
Robert says dont look at rear view stuff, then bases his entire thesis on 2 month old 'data'. You teach a class doing what, basket weaving?
Did just that- the sky is dark and I hear thunder rumbling. Now granted, I dont have a PhD in Monetary Alchemy like yourself but one hardly needs letters after their name to see the world around them or realize that the forecasters havent been right in years.
You may also want to consider that you live in NY and see drastically different weather patterns then those of us not in the NY-DC-LA bubble zones.
The problem is, Robert, YOU believe you are looking through the front windshield and seeing a rosy outlook, but in fact are looking into a mirror and not seeing the truth of what is staring back at you.
All puffed up with vanity
We see what we want to see
To the beautiful and the wise
The mirror always lies
(War Paint, N. Peart)
We're in the cannibalizing phase where a couple of dealers are buying all of the rest. But hey, they're building our first Mercedes-Benz showroom in town, so we must be doing something right!
you must be near DC where the elected elite live, or in NoDak oil fields.
This is what I am seeing. A few jobs are being created by temporary employment agencies that are minimum wage that still leave the 'employed' at an income level low enought to recieve "Romney Care" (you should see how that works) and food stamps. I know of a small manufacturing startup that had just laid off people because a bid was lost to a Chinese firm.
Tis the season for the landscapers to start cleanups and small contractors to start putting new shingles on the roof and it is warm enough to pour concrete for small jobs. Mud season is still here but it has been dry enough this winter so that the fields are tillable early and planting season will soon be underway.
Yes, a few 'below subsistence' jobs will be created but in order for them to survive we still have to pay for the rest.
It is a fact that if you are 45 or older you DO NOT stand a chance in hell of getting a job. If you have been out for 99 weeks you do not stand a chance in hell of getting a job. If you are over qualified you do not stand a chance in hell of getting a job... if you are over educated (what was that about sudent loans?) you do not stand a chance in hell of getting a job. Some of you may have seen this gem... Only employed persons will be considered...
So the only thing you have left is start a new business... Ask a bank for a loan and you might just be a redneck.
"I am encouraged that the ADP shows that private small services businesses have brought their employment levels back up to where they were Pre-Recession." Hahaha. We may have the same number of working people, but did the population grow since the start of the recession? What about lower tax receipts in 2012?
obama will implement a 29 hr work week as full time. Boom! full employment bitches! Since that strategy worked so well in france!
Job sharing, FTW!
Does Robert Brusca, the status-quo financial elite shill, ever give up?
The BLS is a political entity.
My economic model, based on long-term trends in the stock market, predicts the US will slip back into recession in April/May 2012.
http://ccsenet.org/journal/index.php/ijef/article/view/7033
Sounds like standard business-cycle modeling to me. When does the model predict the next peak after the imminent dip?
Nice, throw in some charts and send it to Durden.
Better yet, include precious metals in your analysis.
Really? That must be why the U.S. is facing a downgrade and real income is down. Just the same I think I will take the other side of this trade. How long has Robert been a government troll?
Too bad, another shot to Robert's credibility. Make about as much sense as ZIRP.
Actually a lot of people do.
A lot of people do what? People who think that there is no cost associated with creating capital but adding no real value to the system will see all their paper "wealth" vaporized.
Moreover, replacing one $50 per hour job with 5 $10 per hour jobs is hardly "winning".
No net growth, period.
FYI- your indicators are the result of channel stuffing and warm weather. If you dig a little deeper you will actually see that this was already covered by your same "sources." Please try harder, that's all I am saying.
Dude, no one believes the shit you spew. Goebbels would be proud of you...
http://www.freedomsphoenix.com/Uploads/Graphics/171/03/171-0302082226-nazi-Goebbels.jpg
Makes no sense to me but whatever. This month the banks are foreclosing en masse on many more Americans, some say to the tune of 1.5 million units hitting the market. Bullish?
Robert, do you honestly believe that the positive job number is a) real and b) an improvement? We are seeing the tail end of the recovery due to massive government spending and stimulus. Those "shovel ready jobs" were just 3 years late.
Soviet Russia had full employment. It was part of the Communist's decree to ensure everyone was working. 3 guys were hired for 1 job and their collective productivity still sucked big time. But America is not Soviet Russia, at least not yet.
Ben is stopping the flow of fresh juice into financial markets because he can't keep it up. Markets are taking a backseat and predicting another recession. Europe is between "growth loosing momentum" (Germany) and "full blown depression" (Greece). China is slowing down considerably. Producers of commodities are in meltdown mode.
All indicators are going negative, not positive.
Why the spin?