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What the April Job Report Means To me

RobertBrusca's picture




 

Unfortunately I had a 'good' jobs forecast this AM as I was looking for 125K; we got 115K.

The previous two months were revised up by a net of just over 50K, and that is something. Revisions matter. But I do not like looking at the number 'net of revisions' and saying they are now as expected. They are not as expected... In fact we learn by looking at the numbers and looking a the revisions, as separate events. For example one thing the revision means is that the drop off in April was WORSE than we expected, from +154K to +115K . Had we 'known' March was 154K what do you think we would have 'expected for April? 115K? I don't think so. This NOT as expected...

For now one thing the revisions do mean is the the estimation techniques of the BLS are being overshot by the actual data trends. That implies that there is still some sort of unexpected acceleration going on by the late reporters. And that is good news.

In some ways having a low headline and an upward revision is a separate bit of good news.

DIVERGENCE - dealing with it....
Despite weak PAYROLL growth the unemployment rate fell. It is now 8.1%, down from 8.2%.

Huh?

No one will like how it happened as the labor force contracted and overall household survey (HHS) employment levels fell. But before going bonkers on this month's results remember that the HHS produced -31K jobs in March, +429K in Feb and +847K in Jan etc

Over six months the HHS job growth is up by 1.255% compared to 0.983% for payrolls... Had the payroll report jobs been growing at the same speed as employment in the household report we would have had an extra 360K jobs over that six month period or an average of about 60K more per month

Over six months payroll job gains average 197K; if they had grown as fast (in % terms) as the HHS the gains they would have averaged nearly 260K per month. So that is why the unemployment rate is dropping. Household jobs are being created at a 'payroll equivalent pace' of 260K per month...

So the household report has been picking up more job growth than the headline-grabbing payroll report and that is why the unemployment rate is falling. Month-to-month the household report is volatile so step back from this volatile jobs number. The trends of the two employment surveys are much more similar over longer periods. So what is really happening?

We still do not know, what we do not know...but we can piece things together

Right now here is what we do not know:
we do not know if the better weather pushed up job growth early this year robbing us of growth in subsequent months. Now, as we get into the period when some of that hiring was supposed to happen since, some of it is already 'on the books', the seasonal factors are reducing growth because they do not see the increase that they expect month-to-month. So the seasonal factors may simply be bringing the employment LEVELS back to where they belong. ..

Or

Is all that true to some extent, but is there a real slowing going on, on top of that? Are we past the seasonal pay-back slowdown and is the economy really slowing and is job growth next month going to be even slower?

This is a key question.

What we KNOW is that the unemployment rate still fell in April. What we also know is that while the part of the HHS job report  tha focuses on levels for employment, unemployment and labor force are unstable, that same report tends to get the unemployment rate right. That implies that the errors in the numerator and denominator (U= number unemployed Divided by number in the labor force) offset. You may doubt this but you can easily verify this as the rate of unemployment is very steady while the data on which it is based (ie number unemployed, number in the labor force) on jump all over the place. That should tend to reassure us that whatever slowing is in train, it is not so bad that it has pushed the unemployment RATE UP. In fact the RATE has FALLEN. That fact argues that much of what we are seeing is a reaction to a data compilation process that has not been able to cope with seasonal abnormalities.

That would also suggest that some of the economic weakness seen in economic indicators is real in so far as the levels of activity had picked up previously and simply did not continue to pick up as much as seasonal factors suggested because growth was shifted ahead. Because of that monthly changes were weaker than expected.

For example, jobless claims after a large Easter bump up are back down in the 360K range. they suggest that we might be through the adjustment period...

While we do not know what is going on precisely, the drop in the unemployment rate is one very important and steady signal that continues to point the way to continued economic progress. The continuing upward revisions to jobs suggests that there is still some unexpected acceleration in place. That does not necessarily mean that we are though the period of seeing all our weather abnormalities wash though the system.

But construction job trends are illustrative: They rose by 26K in Dec and by a further 18K in Jan; they are -1k, -3K and -2K over the past three months, averaging just about 5K per month over that five month period. It suggests to me that we have gone through a period of payback and might expect to see job growth picking up in May.

That's all speculation of course, but that is what the numbers suggest to me.

Also April showers bring May flowers.

END

 

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Sat, 05/05/2012 - 09:42 | 2399149 Cheeky Bitch
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This thread was tweeted by Tyler...#Winning..It's the views and comments that rock ZH...Just saying!!

Fri, 05/04/2012 - 19:53 | 2398584 nmewn
nmewn's picture

"Unfortunately I had a 'good' jobs forecast this AM as I was looking for 125K; we got 115K."

125k is good?...lol...mmmkay.

By the way, I've found a new charity...please give generously to nmewn c/o ZH ;-)

http://www.youtube.com/watch?v=cPIu58FjQFA&feature=player_embedded#!

Fri, 05/04/2012 - 15:37 | 2397892 Sqworl
Sqworl's picture

MOST READ -- MOST COMMENTS @BRUSCA #WINNING..ZH LOVES YA!!

Fri, 05/04/2012 - 15:15 | 2397776 Temporalist
Temporalist's picture

Bob I have investment advice; go long assholes. You were just ripped a dozen so that is a 1100% increase in one day alone.

Fri, 05/04/2012 - 16:56 | 2398246 Walt D.
Walt D.'s picture

.... is this going to create a another bubble?

Fri, 05/04/2012 - 15:02 | 2397752 Bansters-in-my-...
Bansters-in-my- feces's picture

Said it one time ane I will say it again,Robert YOU are a Quack....

A delusional Quack at that.

Have a nice day.

Fri, 05/04/2012 - 14:52 | 2397727 roadhazard
roadhazard's picture

Construction job numbers = LOL

You can get more than that from old carpenters dying off and being replaced. Disasters should create 25K a month.

Fri, 05/04/2012 - 14:14 | 2397621 vmromk
vmromk's picture

Brusca, judging by all of the "favorable" comments your articles are receiving, I think it is safe to say that you are the ass-clown of Zero Hedge.

Fri, 05/04/2012 - 15:04 | 2397759 ihedgemyhedges
ihedgemyhedges's picture

Just found this on wiki.  Read the whole thing, and when you get to the LAST TWO WORDS, you will know who this Brusca dingbat really is.........a central banker knob schlobber.........

In March 2008, Greenspan wrote an article for the Financial Times' Economists' Forum in which he said that the 2008-financial crisis in the United States is likely to be judged as the most wrenching since the end of World War II. In it he argued: "We will never be able to anticipate all discontinuities in financial markets." He concluded: "It is important, indeed crucial, that any reforms in, and adjustments to, the structure of markets and regulation not inhibit our most reliable and effective safeguards against cumulative economic failure: market flexibility and open competition." The article attracted a number of critical responses from forum contributors, who, finding causation between Greenspan's policies and the discontinuities in financial markets that followed, criticized Greenspan mainly for what many believed to be his unbalanced and immovable ideological suppositions about global capitalism and free competitive markets. Notable critics included J. Bradford DeLong, Paul Krugman, Alice Rivlin, Michael Hudson, and Willem Buiter.[77]

Greenspan responded to his critics in a follow-up article in which he defended his ideology as applied to his conceptual and policy framework, which, among other things, prohibited him from exerting real pressure against the burgeoning housing bubble or, in his words, "leaning against the wind". Greenspan argued, "My view of the range of dispersion of outcomes has been shaken, but not my judgment that free competitive markets are by far the unrivaled way to organize economies." He concluded: "We have tried regulation ranging from heavy to central planning. None meaningfully worked. Do we wish to retest the evidence?"[78] The Financial Times associate editor and chief economics commentator, Martin Wolf, responded to the discussion with an article defending Greenspan primarily as a scapegoat for the market turmoil. Several notable contributors in defense of Greenspan included Stephen Roach, Allan Meltzer, and Robert Brusca.[79]

Fri, 05/04/2012 - 14:09 | 2397606 Hedgetard55
Hedgetard55's picture

He makes Reggie's editor look like a genius.

Fri, 05/04/2012 - 13:57 | 2397577 Tenshin Headache
Tenshin Headache's picture

"While some will tell you that with revisions is was 'as expected is say: Huh?"

Cogently stated.

Fri, 05/04/2012 - 13:54 | 2397571 catch edge ghost
catch edge ghost's picture

I've had better luck deciphering YouTube comments than I did with this.

Fri, 05/04/2012 - 13:43 | 2397531 vmromk
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Brusca, no one wants to read your nonsense here, go to Cramer's website.

Fri, 05/04/2012 - 13:02 | 2397375 akak
akak's picture

If one million chimps sat randomly punching at typewriters for one million years .... everything they ended up typing would make more sense than this gibberish of Robert Bruschetta.

Really, I am embarrassed for you.

Fri, 05/04/2012 - 12:48 | 2397321 Intoxicologist
Intoxicologist's picture

Another telling typo: "We learn buy looking at the numbers..."

Translation, "I am bought and paid for to look at numbers and write this drivel."

 

Fri, 05/04/2012 - 12:41 | 2397296 Dadburnitpa
Dadburnitpa's picture

Mindlessly, he seeks truth in government data that is devoid of truth.

Fri, 05/04/2012 - 12:38 | 2397247 Mercury
Mercury's picture

-->What we KNOW is that the unemployment rate still fell in April. What we also know is that while the HHS job report on levels for employment, unemployment and labor force are unstable, they tend to get the unemployment rate right.

So,  the rate (quotient) is "right" even though both the numerator and the denominator that determine it are "unstable" ?

I suppose if they were both unstable in lock step with each other (magnitude and direction) the rate could be both steady and correct but this stretches plausibility, especially in light of the labor force participation rate story.

-->Also April showers bring May flowers.

This statement does not inspire confidence in your ability to measure reality as we got almost no rain this April and it's rained every day in May so far.

Fri, 05/04/2012 - 12:13 | 2397202 Sqworl
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You bunch of wankers and ingrates...Tyler the peanut gallery needs to be cropped asap.

 

Fri, 05/04/2012 - 15:33 | 2397863 Jack Sheet
Jack Sheet's picture

You Brsucka's latest alias?

Fri, 05/04/2012 - 12:27 | 2397245 fuu
fuu's picture

We learned it from reading Rubber Balls.

Fri, 05/04/2012 - 12:10 | 2397192 Jack Sheet
Jack Sheet's picture

Who's paying you, Bob?

Fri, 05/04/2012 - 12:05 | 2397153 Paul451
Paul451's picture

Huh?

I didnt understand one word of that.

 

Let me tell you what's happening in the REAL world -

There are only two kinds of employees [1] the ones who have been laid off, and [2] the ones who think they might be next.

Employment is dead in the water and it isnt going to get any better anytime soon.

Fri, 05/04/2012 - 12:19 | 2397220 SheepDog-One
SheepDog-One's picture

Exactly. Ive got a friend who has been in an 'interview process' for like 4 months now...he's been interviewed by regional manager, local manager, regional/local supervisor, now has like 4 other interviews left...I dont even have the heart to tell him theyre just jerking him around.

Fri, 05/04/2012 - 12:36 | 2397276 Ned Zeppelin
Ned Zeppelin's picture

The Art of the Slow No. 

Fri, 05/04/2012 - 12:10 | 2397194 Eireann go Brach
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You are the new #1 ZeroHedge Whipping boy and all round douchebag!

Fri, 05/04/2012 - 12:00 | 2397142 ElvisDog
ElvisDog's picture

the drop in the unemployment rate is one very important and steady signal that continues to point the way to continued economic progress

You are either an idiot or deliberately obscuring reality. The rate declined because something like 600K people without jobs were moved over to the "not in labor force" category this past month.

Fri, 05/04/2012 - 11:55 | 2397135 FullFaithAndCretin
FullFaithAndCretin's picture

Babble. Not a single coherent thought from the beginning to the end of it.

Fri, 05/04/2012 - 11:52 | 2397121 EclecticParrot
EclecticParrot's picture

Quoth the Irish Raven:

“There once were payrolls so light

that Pisani cowered in fright.

With markets to fall,

he could not blame it all

on the encroaching Spanish blight.”

Fri, 05/04/2012 - 11:54 | 2397116 Ned Zeppelin
Ned Zeppelin's picture

Who is this guy? Nom de plume for Leo? Like back when he was looking for 300K+ NRP prints - remember those days when you read his clueless posts about the employment picture and wondered what drug he was on? AS it was then, as it remains now: There Is No Driver For This Hoped For Resurgence In Employment.  Period. 

Can I just start writing articles too? I don't pretend to be an expert.  I bet mine would at least make sense. And then I'd get to post pictures.  WTF.

Fri, 05/04/2012 - 14:33 | 2397660 mtomato2
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"Posting Pictures" FTMFW! When, Tyler?! When?

Fri, 05/04/2012 - 13:57 | 2397579 jus_lite_reading
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I'm telling you, "Tyler" puts these people in for comic relief!! LMAO

Remember LEO is still waiting for his solar panels to come in!!

Fri, 05/04/2012 - 12:42 | 2397300 Jack Sheet
Jack Sheet's picture

must be a pure baiting piece for maximizing advertising revenue web clicks. I can see Warren Buffets disgusting mug in a commercial to the right as i write this

Fri, 05/04/2012 - 11:47 | 2397106 been there done that
been there done that's picture

Can we vote someone off the site? WTF... this guy is worse than a waste of space.

Fri, 05/04/2012 - 12:15 | 2397205 Sqworl
Sqworl's picture

I just voted you off the space..enough of your foul comments and bullshit!

Fri, 05/04/2012 - 15:08 | 2397765 Bansters-in-my-...
Bansters-in-my- feces's picture

Sqworl.....

Let me put this politely......Fuck Off shit head.

Fri, 05/04/2012 - 15:35 | 2397879 Sqworl
Sqworl's picture

Let me respond in a language only you can understand..Unemployed, LOSER!!!

Fri, 05/04/2012 - 11:47 | 2397101 riphowardkatz
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The nice part about Brusca is its like a window into the mind of academics and economists who amazingly people still listen to and respect. As long as people are listening and following the advice of these jackasses there will always be good opportunities to bet against them.

My only problem with Brusca is he is so bad at it I have a feeling no one actually does listen to him.

Fri, 05/04/2012 - 13:57 | 2397573 jus_lite_reading
jus_lite_reading's picture

Well said. Bernanke is also an academic... they make the same decisions for the future based on past results, always expecting a different outcome. Wow, sounds like Einstein's definition of an imbecile.

Bob, I gotta ask, what DOES the April Job report mean to you? I mean, I read your 'piece' and I am still waiting for the answer... I know that you're not, well, ahem... 'techinally' allowed to think for yourself and have been conditioned to read the gubmint tea leaves only one way... but you do know that the S is already hitting the fan blades behind the smoke and mirrors?

 

 

Fri, 05/04/2012 - 12:38 | 2397287 Jack Sheet
Jack Sheet's picture

probably some poor bastards of students

Fri, 05/04/2012 - 11:43 | 2397087 dataanalytics
dataanalytics's picture

Robert, I had thought you were 'off' a bit after reading your past tripe- you call reporting/journalism.

But after today, there is NO doubt, you suffer from some sort of psychosis. You truly have a disorder and mental issue that prevents you from logical and critical thinking. It is a sad reality, the deteriorated mental condition, that you suffer from.

Have you ever seriously thought of seeking medical attention for it? I understand that you are extremely reluctant to admit you have some sort of problem. Like any addict, denial is a powerful detriment to recovery.

Enough of my compassion for your illness.

Even knowing that you are suffering from some mental issue, I have to say, what you have written today is some of the most ridiculous, garbage-filled, drivel I have read in a long time. Your words are beyond idiotic. You appear to be one of the most ignorant persons in the media and society for that matter.

The fact that you call yourself an 'economist' is a disgrace and embarrassment to those who are actually well performing, professional economists.

Now, seriously, go see a medical professional, your condition is worsening, much like the real unemployment rate. I fear you may have something akin to a 'Goebbels-minded' affliction.
You are a sad man indeed.

Fri, 05/04/2012 - 11:48 | 2397084 SheepDog-One
SheepDog-One's picture

What this article means to me- 'Bob Brusca is a Fed shill tool with lips firmly sealed to Bernak's butthole'.

April showers, bring May flowers? Yea, Shitflowers. Bob you better learn some Jim Leahy wisdom- 'When you plant SHIT seeds, what do you get? Shit WEEDS!

Fri, 05/04/2012 - 11:48 | 2397109 riphowardkatz
riphowardkatz's picture

Even Bernanke is embarrased for Brusca and that is saying something

Fri, 05/04/2012 - 11:40 | 2397077 Temporalist
Temporalist's picture

What This Article Means To Me:

Brusca and Leo are the same person and they both own 50% share in a unicorn ranch.

Fri, 05/04/2012 - 11:41 | 2397076 QQQBall
QQQBall's picture

5,000 per month avg construction job growth. That is 100 people per state per month.  Have you considered the drop we are trying to reverse. 60,000 annual run rate is 1200 people per state per year.  Happy days are here again.

Fri, 05/04/2012 - 11:32 | 2397041 digitlman
digitlman's picture

Bullshit Brusca rides again!

Fri, 05/04/2012 - 11:21 | 2397022 Cursive
Cursive's picture

Mr. Brusca,

Do you seriously think that the unemployment rate is down because the household survey shows a pick-up in hiring that the NFP does not? That's what you wrote, but I'm giving you a chance to recant before losing any more credibility.

Fri, 05/04/2012 - 12:30 | 2397256 piceridu
piceridu's picture

I swear I'm seeing very similar writing patterns. This guy has to be Leo...or the newest status quo shill.

Fri, 05/04/2012 - 12:57 | 2397358 akak
akak's picture

Personally, I think he and AnAnonymous, our dear Chinese dishwashing troll, are one and the same, merely with different foci of trolling depending on the particular handle under which they have logged in.

Fri, 05/04/2012 - 19:41 | 2398559 StychoKiller
StychoKiller's picture

That's one smart piece of software, right there! :>D

Fri, 05/04/2012 - 11:58 | 2397155 SheepDog-One
SheepDog-One's picture

He likes phone polls....must have learned that in 'Super Economist' school.

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