This page has been archived and commenting is disabled.

Deconstructing The "Massive Beat" in Employment Data

ilene's picture




 

Deconstructing The "Massive Beat" in Employment Data

Courtesy of Lee Adler of the Wall Street Examiner

The headlines are blaring of a massive surge in January employment that blew away analysts expectations. Frankly, I find it hard to believe that any analysts would not have expected this "news." The real time Federal Withholding Tax daily data for January, which I dutifully cover each week in the Treasury updates, showed a massive surge beginning in late December. Since everybody didn't get a 10% raise, the analysts might have inferred that more people were working. Whether that's a sustainable trend or not is another question, but for January at least, there should have been no mystery.

I like to look behind the headlines at the real unadjusted, unmassaged, unmanipulated numbers to get some idea of what's really going on. Here's where things get strange. Total reported employment and full time employment plunged in January, as is normal for that month. So the Gummit survey data doesn't square with the tax collections. Had we based our forecast for the headlines (which is the only thing that matters to the market in the short run) on the withholding data, we would have gotten it right, but for the wrong reasons. It's a head scratcher that suggests that the Gummit's employment numbers shouldn't be trusted, which isn't news. What we do know for sure is that there was a gigantic surge in withholding taxes from late December to mid January, and that surge disappeared completely in the last week. 

 
 

So there's no question that things were fantastic in January, although why and how that happened is a mystery. Last week's action suggests that the good news may not persist in February. We also know that the big beat in the headline numbers was an accident. The seasonal adjustment fudge that the Gummit adds to the mix grossly overstated what the actual survey data showed. Here's a picture. The red line is the actual survey numbers. The blue line is the fake seasonally adjusted number. 

 
Remember: Red... actual. Blue... fake. 
 
Just so you know your eyes aren't playing tricks on you, let's zoom in to just the past 13 months.
 
 
There you have it. The headline, fake, number was up by 243,000, purportedly the biggest increase since 2006. But what's this? The actual survey number showed a decrease of 2.7 million jobs. In the world of seasonally adjusted government data, down can be up.
 
To be honest though, that's a good number for January. Last year the drop was 2.9 million, in 2010 it was also 2.9 million, and in 2009 it was 3.7 million. This year also compares well with the bubble years of 2005 (-2.7 million) and 2006 (-2.7). So looking at the top line, the bottom line is that it was a good report, just not the blowout positive number that the headlines reported. It wasn't a gain, but it was a much smaller loss than in the worst years of the slump, and about as good as any non-recession year.
 
I like to look at full time employment. There again the seasonal fudging overstated the case. The numbers were not good. Full time jobs declined by 1.2 million in January. That's worse than last year at 834,000, and 2010 at 1.1 million. But it is better than the 2.6 million drop in 2009 and the 1.7 million drop in 2008. Does that mean this year was just right?
 
The year to year gain was 1.5 million or just under 1.4%, which was a little less than last year's 1.5%. Is that a good thing?
 
 

To put this in perspective, the actual survey data says that 111.9 million people had full time jobs in January. That compares with a peak level of 119.3 million in January 2008. They call that a "recovery?" 

I wonder whether these numbers can be trusted at all, given the huge surge in withholding taxes in January. From that perspective, the BLS data would seem to understate the gain. But was the gain in taxes really about more jobs, or something else? What was behind that surge in tax collections is a mystery. Apparently, it may have had more to do with bonuses and sales commissions than a big increase in the number of jobs.

There may be a hint of that in the average weekly earnings report which showed a jump of 1.8% between December and January. Apparently some people got big paychecks during the period. I wouldn't attribute it to a sudden increase in inflation, at least not yet.   

In the end, it's hard to give any of these reports much credence. The blowout headline numbers are misleading, although the tax withholding data showed that some people clearly enjoyed a windfall from late December through the latter part of January. But then that disappeared last week. The chances are that these employment numbers will be heavily revised, and if last week's tax data is indicative of what's ahead this month, the "good news" won't be sustained.  

Given the confusion inherent in these numbers, the proof of whether there's any real improvement in the employment trend may not come until this summer when peak employment levels are normally reached. In 2009, 2010, and 2011, peak full time employment stalled at about the same level each July. This year and last year the seasonal lows have trended upward. So if the economy really is growing, given the running head start off the lows I would expect full time employment to leap past last year's highs in May or June. If that does not happen, then we have gained nothing. The initial indications will come in the rate of growth in February and March. Those are numbers to watch. If the growth rate holds up, then the economy is growing, but if those growth rates slow, then we're probably running in quicksand. 

Meanwhile, the government's own survey data show that 7.4 million fewer people have full time jobs today than was the case 4 years ago. Those 7 million jobs were the fake jobs spawned by the housing and credit bubbles. Those jobs were vaporized when the bubble economy collapsed. They are NEVER coming back. The "new normal" is just the old normal without the added froth. What we are left with is the bitter reality of fewer people carrying the tax load and more people needing government assistance. We have yet to see any real proof that the trends are improving enough to ameliorate those burdens on the economy.

 

Get regular updates on the US housing market, and stay up to date with the machinations of the Fed, Treasury, Primary Dealers and foreign central banks in the US market, in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Try it risk free for 30 days. Get the research and analysis you need to understand these critical forces. Click this link to try WSE’s Professional Edition risk free for 30 days! 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 02/04/2012 - 17:22 | 2127154 Cand-Hamz-Bitchez
Cand-Hamz-Bitchez's picture

The gist of the comments in this article: "We all don't have jobs, so when somebody says that new people got jobs, I call bullshit."

What, Cand-Hamz-Bitchez's employer hired 50 people in January alone, for 50ish K a piece?

Poppycock.  The sky is falling.  Nobody has jobs.  Hide under your porch, hoard gold and silver,  and the United States will fall to Zimbabwe after printing 80 trillion dollars a day.

African third world, bitchez!

And what you'll need is some canned hamz to barter!

Sat, 02/04/2012 - 13:30 | 2126609 TruthInSunshine
TruthInSunshine's picture

Another FANTASTIC break down of the flaws in the January 2012 BLS U3 report by Robert Oak over at Economic Populist (this guy is on fire - I hope Zero Hedge starts linking his articles).

He has a knack for separating the wheat from the chaff in the statistical data used by the BLS in pointing out the misleading (intentional or not) factors:

The January Employment Report Shows Things Aren't as Rosy as Some Want to Believe

 

And here's an excerpt of his that is purely AWESOME, which speaks to how the census bureau data that revised the U.S. population adjustment for the entire last year got dumped into January's pool that the BLS used to compute U3, rendering January's report WORTHLESS (not to mention that the December 2011 to January 2012 month-over-month change is nothing but noise):

The December to January unemployment statistics are often reported wrong in the press. We're sorry, god love ya, but these articles are plain incorrect. People like to compare the month to month change in population, the number of people no longer considered part of the labor force and other data. The grave mistake made by so many in the press and elsewhere is not realizing annual population adjustments are placed in the January data, not distributed evenly across the entire year, or backwards applied and that's why one cannot compare these two months. Below is a graph of non-institutional population monthly change. This is the number from where all other unemployment statistics are derived. It represents people 16 and older, not locked up somewhere, in a medical facility or in the military.

 

 

Getting It Wrong on the BLS Employment Report

 

 

Sat, 02/04/2012 - 12:36 | 2126502 pmm009
pmm009's picture

Great piece.  HOWEVER, THIS IS NOT A MYSTERY.  Part time employment is becoming a larger share of the US economy, so is grey market for cash employment which boosts other numbers.

MOST IMPORTANT, what do you do if you own or run a business and believe capital gains and taxes on income are going up in 2013?  Why you pay out as much as you can in early 2012 to maximize the time value on taxes paid in April 2013. 

Sat, 02/04/2012 - 14:00 | 2126697 therearetoomany...
therearetoomanyidiots's picture

This is right on.  Once again we see a continnual expansion of the haves vs the have nots OR the elite and those that serve them.  The bosses.ceos etc got xmas bonuses, the rest of us got reduced to permanent temporary status levels, with no benefits, and no guarantee of employment next week.    Or, we get mcdonald's jobs.   This makes the OWS efforts ever more relevant and valid. 

 

 

Sat, 02/04/2012 - 12:31 | 2126492 Money 4 Nothing
Money 4 Nothing's picture

Honorable Zero Hedge mention on Drudge Report link.

http://video.cnbc.com/gallery/?video=3000071275

 

I think Santilli may find himself on UE pretty soon. Good work.

Sat, 02/04/2012 - 12:11 | 2126430 DavidC
DavidC's picture

I've gone through the whole of the BLS data and while I agree overall with what ZH, Denninger, Mish, TrimTabs et al (except Ritholtz) have written, it's certainly confusing.
http://market-ticker.org/akcs-www?post=201495
http://globaleconomicanalysis.blogspot.com/2012/02/nonfarm-payroll-24300...
http://www.ritholtz.com/blog/2012/02/no-rick-santelli-and-zero-hedge-one...

Some of the data, year on year or month-on-month, seems to show slight improvement, some not. Some of the unadjusted data seems to show no improvement some of it does.

We've got Lee Adler saying there was a surge in withholding tax in late December and TrimTab's Biderman (love his shirts!) saying that the trailing quarterly collections have just turned negative.
http://www.zerohedge.com/news/trimtabs-explains-why-todays-very-very-sus...

If we're genuinely into a recovery though, why are the spigots still fully opened and rates slated to stay at or near zero for longer than originally declared? Why are banks still marking to fiction? Why is bank leverage higher now than in 2008? Why is personal credit being used to fund rent payments? Why is the only real growth in credit student credit? Etc, etc.

I still don't think this is a recovery.
DavidC

Sat, 02/04/2012 - 15:41 | 2126966 vast-dom
vast-dom's picture

That's because you haven't reviewed the PARANORMAL PAYROLL CHARTS.

Sat, 02/04/2012 - 14:15 | 2126743 TruthInSunshine
TruthInSunshine's picture

What Robert Oak at Economic Populist has written has helped clarify what is an extremely bizarre BLS methodology of computing and reporting U3.

The fact that there's a massive January U3 distortion as census bureau population adjustment data gets poured into January's base numbers (that the BLS works off of) essentially makes the month-to-month % change from December to January absolutely worthless, and that the financial press doesn't explain this does a massive disservice to the public and investing public.

Sat, 02/04/2012 - 14:32 | 2126790 DavidC
DavidC's picture

TruthInSunshine,
Thanks for that. Yes, I'm aware of the January distortion and also the fact that the 2010 Census was used in the recalibration. The BLS did use this data in some of its tables to adjust for some of last year. I also looked at last January's (discontinuous) data and this month's to just get an impression of like-for-like month (notwithstanding the census data being incorporated this year).

Thanks for the extra links - interesting that they seem to confirm ZH, Karl D, TrimTabs et al rather than Ritholtz and his ilk.

DavidC

Sat, 02/04/2012 - 14:36 | 2126799 TruthInSunshine
TruthInSunshine's picture

David,

Maybe you can help me clarify something:

Was this January's U3 (and % change from December) distorted even more greatly than any other January U3?

In other words, did the recent census bureau 10 year population revision get 'dumped' into January 2012's base figures the BLS worked from, whereas only one year's worth of estimated population change would have gotten 'dumped' into any other January's BLS data?

Thanks.

Sat, 02/04/2012 - 14:51 | 2126827 DavidC
DavidC's picture

TruthInSunshine,
Sorry, I meant the 2012 census in my last post but you'd responded quickly before I could edit it!

I don't know the answer to your question, but one of the charts on one of your links shows a BIG spike this year whereas previous non-census Januaries have shown smaller spikes (both up and down). It would be interesting to see the data around the time of the last US census.
http://www.economicpopulist.org/content/getting-it-wrong-bls-employment-...

Mish has pointed out on many occasions that we do not know the inner workings of the BLS model. When I was looking through the data I was trying to get more of a flavour of absolute (non-seasonally adjusted) as well as some of the ratios/seasonally adjusted, hence my confusion(!) but certainly seeing no change for the better (whether or not Oak disagrees with the 1.2 million figure), and certainly no justification for the glee yesterday.

DavidC

Sat, 02/04/2012 - 15:23 | 2126916 TruthInSunshine
TruthInSunshine's picture

David, I do believe the 2012 January U3 report is unique in the sense that - yes, a decade's worth of census bureau population adjustment got dumped into one month of baseline that the BLS worked from in computing their U3 figure.

Thus, it is even more worthless than the December to January % change (which only typically incorporate population rate change for 12 months, dumped into January all at once, rather than 120 months).

Explaining Yesterday's Seasonally Adjusted Nonfarm Payroll "Beat"

Sat, 02/04/2012 - 10:59 | 2126378 boatwhiskers
boatwhiskers's picture

 The unemployment #'s  A sweet sweet sirens song lulling the masses to the rocky shores. I will be waiting with my driftwood superstore as the fog lifts and the lifeboats are full.

Sat, 02/04/2012 - 10:33 | 2126360 istt
istt's picture

Not a bad article but, in reality, once you read the last paragraph you see it is nothing more than the WSJ trying to sell their premium services.  Pretty pathetic.

Sat, 02/04/2012 - 14:01 | 2126705 therearetoomany...
therearetoomanyidiots's picture

F the WSJ - they threw down the gauntlet yesterday in promoting these numbers as great and good in at least two separate opinion pieces.   Any shred of credibility it may have had musta left with the broad sheet format.  

Sat, 02/04/2012 - 10:33 | 2126359 istt
istt's picture

Not a bad article but, in reality, once you read the last paragraph you see it is nothing more than the WSJ trying to sell their premium services.  Pretty pathetic.

Sat, 02/04/2012 - 14:25 | 2126774 TruthInSunshine
TruthInSunshine's picture

You're speaking of the Wall Street Examiner, correct?

The Economic Populist, just like Zero Hedge, is gratis.

Sat, 02/04/2012 - 10:18 | 2126347 miker
miker's picture

It's clear that employment headlines yesterday were an act of desperation to try and turn around public sentiment.  And the news organizations are clearly on board, or idiots, or both.  Our government does not want its citizens to know how bad it is getting. 

The reality is we still have way more unproductive (e.g., bullshit) work in our economy.  It too will fall by the wayside.   Think about all the things/services people (except the 1% ers) buy that they really don't need; that they really can live without. 

As time wears on, all segments of the economy will continue to grind down.  Unemployment, underemploymnet, giving up....all will continue.  Those that are employed will not get much in raises, and new workers will get lower, sometimes way lower starting wages.  All of this continues until an equilibrium is reached.  That equilibrium is "lower overall wealth level" when you take away all the debt driven "wealth" of the last 25 years.

Sat, 02/04/2012 - 06:25 | 2126208 Element
Element's picture

You didn't get the Memo?

It's da election stoopid.

There will be a statistical economic upswing into late 2012 ... reality be damned.

Sat, 02/04/2012 - 11:33 | 2126396 The Monkey
The Monkey's picture

Unlikely. We have a very deep recession coming in Europe. This baby is barely out of the gate.

Amazingly, the environment is ubber-bullish (toward equity) even though another big flywheel is loosing momentum.

Sat, 02/04/2012 - 05:08 | 2126181 bobbydelgreco
bobbydelgreco's picture

as an employer i paid out more witholding in january  because accountants considered december a 5 week month

Sat, 02/04/2012 - 03:25 | 2126123 q99x2
q99x2's picture

Time for a class action against the BLS.

Sat, 02/04/2012 - 04:07 | 2126154 The Monkey
The Monkey's picture

I'm long 30 year treasuries and 3X short the S&P 500 with 96% of my assets. I'm dollar cost averaging the short position with SPXU.

Let's get this baby to 1,400!

Sat, 02/04/2012 - 01:47 | 2126048 TheArmageddonTrader
TheArmageddonTrader's picture

First thing, this Lee Adler guy is full of it. He says that withholding receipts show that employment was gangbusters in December and January. He's flat out wrong. Withholding receipts always spike in December and January. It's a seasonal thing, basically Christmas temps and year-end bonuses. Receipts actually spiked less this December-January than in Dec10-Jan11. 

Second thing, withholding receipts are not a very good way to gauge employment trends. Especially not daily receipts data, which doesn't separate out income tax (very volatile) from FICA (fairly stable). Monthly data is better, as it does separate withheld income tax, and breaks down FICA into Social Security (OASI, DI) and Medicare (HI). Also the daily receipts data appears to be wildly inaccurate - for reasons unknown to me (I guess mainly to do with income tax), if you compare the monthly totals from the daily data to the monthly data, they are off by up to 6%. That's a huge range of error, much bigger than the changes typically caused by the employment gains or losses that you are trying to read.

The only possibly useful withholding numbers for reading employment trends are the monthly FICA receipts, in Treasury's MTS. I'm not sure they're any better at gauging employment than BLS's employment data, and they're published about a week later, but they are worth looking at. I recommend looking only at Medicare (federal hospital insurance trust fund) to exclude the effects of the payroll tax cut. January numbers aren't out yet. December was up 6.8% mom compared to a 7.2% mom gain in Dec 2010. So that would indicate the Dec 2011 employment gain was probably slightly smaller than the Dec 2010 employment gain. Which contradicts BLS, which reported a much better Dec 2011 (+203k) than Dec 2010 (+120k). However,  to do this right, you need to adjust the FICA data for shifting dates of holidays & weekends, which is tricky. Besides, BLS is counting jobs, FICA receipts counts aggregate payroll income, not the same thing.

It's also worth noting that December Medicare withholding was up a bit over 2% year-on-year. Which is pretty pathetic, considering that the number of employed supposedly grew by 1.3% while inflation ran at 3%.

Sat, 02/04/2012 - 10:19 | 2126348 Lee Adler- The ...
Lee Adler- The Wall Street Examiner's picture

The chart shows year to year real % change. This year's January spike was 10% larger than last year on average at peak. That clearly shows that something was going on. 

The volatility of total withholding doesn't diminish its usefulness to the experienced analyst. When compiled over 10 and 30 day periods, as this chart does, it has often been useful in predicting whether the BLS report would beat or miss expectations.

Just because data is volatile does not mean that it isn't useful. Stock traders read the patterns of volatile stock prices day in day out. Some even make money doing just that. 

After the fact monthly data is great for predicting the past, if that's what you want to do.  

Sat, 02/04/2012 - 13:10 | 2126578 TheArmageddonTrader
TheArmageddonTrader's picture

Thanks for taking the time to reply, but with all due respect, you're just chasing after noise in a noisy data stream. There is no value in that noise.

According to Treasury's daily reports, the monthly total withholding receipts were Nov 10 $138.9b, Dec 10 $169.9b, Jan 11 $152.9b; Nov 11 $134.1b, Dec 11 $162.3b, Jan 12 $158.5b. According to the very data you are looking at, January was overall stronger this year than last, but December was much weaker (relative to the previous month).

But, I am not saying that the withholding data actually indicates a worse December-January than last year in terms of employment. The income tax withholding is simply far too volatile to be of predictive value. Moreover it's too inaccurate. The Dec 10 witholding total was $180.5 billion according to the MTS. Somehow the daily reports missed more than 6% of that month's withholding taxes.

As I said I doubt the monthly FICA data is any better at gauging employment trends than the BLS and it comes out about a week (or more) later. I doubt it's much better than 50-50 in predicting the direction of BLS revisions.

The daily receipts data is worthless for predicting either BLS initial reports or revisions. I challenge you to create a consistently applied rule that uses daily withholding receipts data to predict the direction of BLS first reports versus the previous month's (more net job gains or fewer) and show that it predicts better than 55% over a ten year period. Even with the benefit of retrofitting, you can't do it.

Sat, 02/04/2012 - 15:07 | 2126871 Lee Adler- The ...
Lee Adler- The Wall Street Examiner's picture

Again, the chart does not compare month to month. It is a year over year comparison. This year was 10% better than last year. The huge bulge is plainly visible. So is the fact that it has now disappeared. Seems pretty clear to me. 

Sat, 02/04/2012 - 16:25 | 2127050 TheArmageddonTrader
TheArmageddonTrader's picture

Yes but so what? Dec 11 receipts were down 4.5% year-on-year according to the daily reports, but net job gains were up, from 120k in Dec 10 to 203k in Dec 11.

The bulge you see in early January reflects fluctuations in income tax withholding receipts totally unrelated to employment numbers. Such bulges and depressions in the daily receipts data do not correlate with accelerations and decelerations of net job gains. Seems abundantly clear to me.

Sat, 02/04/2012 - 00:41 | 2125965 lynnybee
lynnybee's picture

notice how the poor souls searching for employment are simply ignored as if they do not exist ?    i get the feeling that they are deliberately being marginalized, deliberately being ignored & abandoned.    the government wants a depression; they want to shrink the economy & destroy it.   it's part of the plan, Stan .    it's all part of the grand design to shrink jobs & wages.   Not only are there no jobs, but the lucky few who do have employment are working @ $8.50/hr Panera or Walgreen or Target or Walmart jobs.    It's a shame, a crying shame.    try as hard as they can, my kids can't come up with any jobs that even support an apartment, a car payment, utilities, etc.     well, hell ...... i was making $10 / hr . back in 1978 !     (do not look down @ those less fortunate; there but for the grace of God go I . )  

Sat, 02/04/2012 - 14:14 | 2126739 therearetoomany...
therearetoomanyidiots's picture

You can't have a 'global' economy without eveyone sharing the global income.   We've seen obummer and the evil fucks in world wide corporations touting the idea that we're now 'insourcing' jobs.   The ONLY reason that is happening is because we now CAN pay AMERICANS china and other third world salaries because 'they' have successfully brought us down.   SOOOO many without jobs, that they'll work at McDonald's or some shit supermarket for min. wage even though they hold Masters and PhDs.   And this, too, is touted as something great by the bone heads on Fox news like Hannity.   'I used to work in construction...blah blah blah."   Well, it's one thing when you're starting out an ddon't have experience.   It's another when you have significant experience and can't get a jbo because there is no job to get.   This is so sad and what's more is we have half a country full of assholes thinking the government is going 'help' us.    Oy Vey!

 

Oh, and this didn't start with obamao....we only have to look to Ross Perot who tried to warn us all that Nafta etc was going to lead to some bad shit.   Who won that battle?  

 

Vote ron paul, don't let media select your president.  Tell everyone you know.

Sat, 02/04/2012 - 00:59 | 2125996 Vic Vinegar
Vic Vinegar's picture

If you wanna talk about poor souls look at me lynnbee… I gotta read the best website in the world but then debate as to whether or not and go down into the comments section.

While there are great insights from commenters in every article, it’s often getting to be mostly all grey bags talking nonsense down here. 

But I would be remiss if I forget your repetitive bitching about ‘the way things used to be’, and tossing in a few jew-hate comments along the way.  So let’s give you the credit you deserve!

It’s Tyler’s site and I’ll never hate on it b/c: a) it’s the best site around and b) it’s his site. 

So let’s keep it positive: the lucky few are those who have rode the PNRA train over the last five years.  Take a look at this run 'grandma'.

http://finance.yahoo.com/q/bc?s=PNRA+Basic+Chart&t=5y

Even luckier are those who got in on the stock and never had to be subjected to your nonsense.  LOL.

Sat, 02/04/2012 - 05:53 | 2126200 falak pema
falak pema's picture

that's some run on "bread"...and cheap sweat!

Fri, 02/03/2012 - 22:23 | 2125742 disabledvet
disabledvet's picture

Clearly you haven't seen the "internal group dynamic videos" released "so that the public's mind will be put at ease" contrary the "rantings of the lunatics at Zero Hedge."
http://www.youtube.com/watch?feature=player_detailpage&v=Q8DkmzIcDeA
now what could be wrong with these numbers i ask you? WHAT AT ALL!!!!!!

Fri, 02/03/2012 - 22:01 | 2125698 adr
adr's picture

So 1.1 million jobs were lost in a month from the smallest labor pool in 30 years and that is supposed to be good??? Yes we didn't lose as many jobs as the bubble level of 2005, however losing 1.5 million jobs when the labor pool was far larger isn't as big a deal as the loss now. 1.1 million is a far larger percentage of the remaining labor force than 1.5 million from the 2005 labor pool. To say the labor market is anything other than a complete disaster is a total fraudulent lie.

Fri, 02/03/2012 - 20:20 | 2125430 Dermasolarapate...
Dermasolarapaterraphatrima's picture
American Airlines Seeks 13,000 Job Cuts

 

http://www.nytimes.com/2012/02/02/business/american-airlines-seeks-job-c...

 

This is horrendous news for those at the DFW AA hub. They never recovered fully from the tech crash and now this.

Ouch!

Fri, 02/03/2012 - 20:02 | 2125386 monopoly
monopoly's picture

Good post and puts it all in perspective. Time will tell. Meanwhile, enjoy the bull.

Fri, 02/03/2012 - 23:48 | 2125883 WmMcK
WmMcK's picture

Enjoy the bull -- nice double meaning there.  Life will show, for sure.

Fri, 02/03/2012 - 18:59 | 2125161 New_Meat
Fri, 02/03/2012 - 19:38 | 2125247 TruthInSunshine
TruthInSunshine's picture

This is my last post on the sham that was/is the BLS Unemployment Report this am, provided here in condensed form, as posted by Numerian on The Economic Populist, to give a heads up to the weekend ZH readers how massively the BLS (and government/politicians/Wall Street Sell-Side Analysts/sham economists) are manipulating the data to instill CONfidence in the sheeple.

Shearing time just has to be drawing near.

Think about this one excerpt: 

"The percent of the total working population who did not have jobs rose to 36.7%, an all time high. It’s no wonder the unemployment rate fell, when the denominator shrinks so markedly."

The Economic Populist Speak Your Mind 2 Cents at a Time

Wow! 243000 New Jobs Created in January

Submitted by Numerian on Fri, 02/03/2012 - 10:24

 

While a whopping number of jobs were created in January, a far larger number of people left the labor force - 1,752,000 in fact. The percent of the total working population who did not have jobs rose to 36.7%, an all time high. It’s no wonder the unemployment rate fell, when the denominator shrinks so markedly. The total number of people employed fell by 737,000. So what do you want to celebrate – the 243,000 who got jobs, or the million or so people who dropped by the wayside and are no longer counted in the data?


It makes you wonder how much faith you can put in the Labor Department reports. For example, the government, the business press, and Wall Street rarely report on the fundamental ways in which the US labor market is changing, with so many people dropping out of the work force. The press has had a hard enough time getting to grips with the Labor Department’s Birth/Death model, which over time adds to the number of people reported as employed. The model is supposed to compensate for the inability of the government to get good information on the number of new businesses created every month and which presumably add to employment. The problem is the model has been shown in the past to have significantly overestimated the number of jobs created by new businesses. Economists still don’t know if the model is appropriate, and how much of the 243,000 jobs created this month are the result of the Birth/Death model.

Fri, 02/03/2012 - 21:16 | 2125583 Buck Johnson
Buck Johnson's picture

They are doing everything they can to make it look like the economy is turning around right at election time.  This is a total joke.

Fri, 02/03/2012 - 18:57 | 2125156 Mark Noonan
Mark Noonan's picture

Overtime - lots and lots of overtime; companies are keeping work forces slim, but during the holiday sales season so during the holiday sales season a lot of overtime was offered to keep up with increased demand.  Add to the temp job hiring, and you've probably got your whole explanation for the BLS numbers.

Fri, 02/03/2012 - 19:00 | 2125165 New_Meat
New_Meat's picture

hours worked down.  But -~2MM workers in one month? - Ned

Fri, 02/03/2012 - 19:02 | 2125170 Mark Noonan
Mark Noonan's picture

Good point - but the busy season for my employer is from Thanksgiving to Christmas...and we had massive overtime; something we rarely have any other time of year.  The Mrs, too, had lots of overtime. 

Fri, 02/03/2012 - 18:52 | 2125139 Bob The Builder
Bob The Builder's picture

"Since everybody didn't get a 10% raise, the analysts might have inferred that more people were working."

FUTA Withholdings?  High earners max-out the FUTA contributions during the year, then the slate resets on Jan 1 with resumed withholdings??? 

Sat, 02/04/2012 - 02:26 | 2126091 unemployed
unemployed's picture

Bingo,  FUTA is on the first 7000 bucks of wages.  But used to be the Feds only got 0.8 percent or 56 bucks per job per year.   Let me know how that is working out now,   the Feds jack their cut when the states keep borrowing money from them to pay out to the unemployed.   Like FICA but more so it is front loaded at the beginning of the calendar year.

Fri, 02/03/2012 - 18:48 | 2125128 Tristram
Tristram's picture

My wife got a year-end bonus, 5% of her annual salary, that the company insisted be paid in January.  Many others in the company got the same bonus.  Sounds like this might be responsible for some of the discrepancy referenced in this article.

Fri, 02/03/2012 - 18:22 | 2125039 CapitalistRock
CapitalistRock's picture

Don't be too surprised. Printing money will produce real jobs and real inflation at the expense of savers and pensioners. The simple example: Hitler printed money to bring unemployment to zero. You can always put money into the economy and force investment.

The problem, of course, is the terrible misallocations of capital. You create employment but prices will rise faster than wages. Real GDP growth can be negative in an environment of falling unemployment numbers.

That is what we are seeing. Nothing new. Good ole fiat paper expansion. It will eventually end the way Weimar Germany did.

Fri, 02/03/2012 - 19:06 | 2125184 Randall Cabot
Randall Cabot's picture

Hitler printed debt-free money.

 

Sat, 02/04/2012 - 06:39 | 2126210 ltsgt1
ltsgt1's picture

Hitler's money was back by gold teeth.

Sat, 02/04/2012 - 14:19 | 2126762 therearetoomany...
therearetoomanyidiots's picture

and quite a few had "skin" in the game...

 

 

Do NOT follow this link or you will be banned from the site!