Goldman's NFP Postmortem

Tyler Durden's picture

The fact-digging continues, this time out out of Goldman, which has some less than stellar words about what the superficial consensus says was a strong number. Then again, Goldman's agenda is pure goldilocks: an economy that is not too strong and just right for another $2 trillion of QEternity at a minimum. Remember: if jobs were to really surge someone might ask Bernanke if when he will stop his $85 billion/month flow program aka QE3.

From Goldman Sachs

Jobless rate falls below 8% as job gains differ sharply between two surveys

BOTTOM LINE: In an encouraging labor market report, the official US unemployment rate fell 0.3 points to 7.8% as the survey of households uncovered more than 800,000 new jobs in September, 187,000 of which were due to gains in government employment. While last month’s job gains in the payroll survey were much more moderate (114,000), they accompanied increases in the workweek and came atop significant revisions in government employment. Our preliminary read for the September CAI is 2.4%.


Nonfarm payrolls +114k for September vs GS +100k, median forecast +115k.
Unemployment rate 7.8% for September vs GS 8.1%, median forecast 8.2%.
Average hourly earnings +0.3% (mom) for September vs GS +0.1%, median forecast +0.2%.


1. The most eye-catching part of this report is the 0.3-point drop in the unemployment rate, to 7.8%. For the most part, this looks like a genuine move, as it comes alongside large increases in both the labor force (+418,000) and the tally of jobs in the survey of households (+873,000) of which 187,000 was due to government. (Note: The claim that the household employment gain was entirely due to government hiring is incorrect. We confirmed with the BLS that the seasonally-adjusted gain in government employment was 187,000.) In both cases, the labor force and the level of employment followed setbacks in both July and August, so it may be better to look at 3-month totals. On that basis, household employment is up 559,000 while the labor force is still down 100,000. One anomaly in the household data is that the U-6 measure of underemployment remained at the 14.7% level reported for August; this is due to a large increase in the number of workers working part time for economic reasons. For this reason, we have applied a 1-point downward adjustment to the MAP reading for unemployment.

2. In the usually more reliable payroll survey, the job count for September was 114,000 higher than for August, which itself was revised up by 86,000 for a round total of 200,000 new jobs in this survey. However, the upward revisions were more than accounted for by mark-ups in government jobs in both July and August. Across major sectors of the economy, the pattern of job gains in September was similar to the August pattern—continuing strength in education (+49,000 in September, somewhat surprising given the large gains of the prior two months), little net change in temporary workers (down 2,000 in September following no change in August), and another setback in manufacturing (-16,000).

3. Other elements of the payroll survey were firmer. In particular, workweeks lengthened 0.1 hour in both manufacturing and the overall private economy. As a result, the index of hours worked—a rough proxy for GDP less productivity gains—rose a sturdy 0.4% in September. Average hourly earnings also rose 0.3% in September. So the report suggests at least moderate gains in wage and salary income and in industrial output despite the job loss in that sector. We would also note that the gain in household employment, when adjusted to match the definitions used in the payroll survey, was a sturdy 294,000. For these reasons, we have applied an upward adjustment of 1 point to the MAP reading for payrolls.

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Stackers's picture

Dont forget the Fed has promised continued QE even after employment improves. "Adjust" away.

Debtonation's picture

Federal Reserve "Other Assets" breech $200 billion and soaring!

I wonder what these "Other Assets" might be?  I don't recall an "Other Assets" QE. But whatever the Fed is buying, it's most definitely overpaying.

Precious's picture

Goldman invented low flush toilets in hopes of self-preservation.

Pegasus Muse's picture

John Williams: The Real Facts Behind Today’s Fictitious Drop in Unemployment


In this segment, Jim starts it off speaking with John Williams of Shadow Government Statistics on the unemployment numbers released Friday. John explains why the numbers are highly questionable. 

redpill's picture

My friend's mom has earned 873,000 new jobs by working at home for the BLS.  Learn more at

Dalago's picture

So long as they don't block the porn websites, I'm in.  What the fuck am I talking about?!  Of course they don't block porn at a government job!!  Jackpot!

Dr. Engali's picture

Shopping malls and empty office buildings.

helping_friendly_book's picture

es mini futures or maybe just jacking the SPY ETF? That is why they invented EFTs? Yes?

EuroInhabitant's picture

Looks like that total collapse of the US is postponed till somewhere in a very distant future. If ever. Mish is also wrong: he predicted unemployment to stay 8 percent or higher till at least the end of 2015.

RSBriggs's picture

Who is right depends a great deal on who is doing the counting - kind of like the up and coming US election.

_underscore's picture

If the BLS figures are in any real way relevant, I can't understand the recent QE4Eva announcements. One would presume the BLS figures aren't a bolt-from-the-blue for higher govt. officials & the Fed, so they presumably knew about these 'encouraging' figures (or BLS estimations of them from pre-audited data etc.) before the QE4Eva strategy was instigated. Simple question then: why do more QE then? Surely such surging employment figures, with lots of liqudity in the pipeline from QE, would presage very high inflation if BLS stats. are true or meaningful. I don't for one moment think Ben, the Fed, BLS are stupid, working to a different agenda, yes, but not stupid.

Ned Zeppelin's picture

Because - one more time now - Fed's employment mandate is a phony- baloney front/excuse for Fed to serve its true mandate, that of benefiting and serving its owner TBTFs. Ben and the Fed folks don't really care about employment at all. Nor housing, for that matter, another excuse proffered for QE4EVR.

_underscore's picture

That sounds like a resonable explanation, given the facts we know. It would have been more difficult, you would have thought, to announce QE4Eva AFTER these BLS figures were published & still use the fig-leaf of need to improve employment rates as the reason/excuse.

taniquetil's picture

If the printed fiat is actually going to all the people now, this can only mean one thing:

Inflation is coming.

LawsofPhysics's picture

Correct.  Up until this point all the printing was simply filling in the capital hole left in 2008/2009.  Of course all the paper-pushing fucks still collected their fees etc.

Now we "might" see some printed fiat hit the streets, certainly is in other countries, but who knows.

q99x2's picture

Goldman is probably arming the EU version of DHS with hollow points to kill all of them too.

jekyll island's picture

OMG, people are starting to question the validity of the jobs report?  Say it isn't so.    Regan said it best:  The worst thing that could ever happen to you is to have someone come up to you and say:  "I'm from the government, and I'm here to help"

LetThemEatRand's picture

And yet Reagan created the plunge protection team, tripled the federal budget, gave weapons to our good buddies in Iran that are now our biggest enemies supposedly,championed the government war on drugs, grew the size of the federal government, and more.   I guess it really doesn't matter what you do so long as you tell your audience what it wants to hear.

jekyll island's picture

Yeah, Regan really ramped up the budget deficit, he was the pioneer in that regard.  That is probably why it is not mentioned as part of his legacy.  The first one to do something usually gets away with it.  Problem is all the copycats who followed.  

Curt W's picture

I see this all the time Reagan trippled the debt.

But try using the actual numbers

$500 Billion up to $1.5 Trillion

He added $1 Trillion to the debt in 8 years

Obama added more this year and every year in office

Vagabond's picture

So I should just ignore inflation?

drchris's picture

I'll do the heavy lifting for you.  The average value of a dollar over Reagan's term in today's dollars is $2.06.  Therefore, Reagan added $2.06 trillion in today's dollars to the debt over 8 years or $250 billion a year in today's dollars.  Obama is over 4x worse.

Manthong's picture

“as the survey of households uncovered more than 800,000 new jobs in September, 187,000 of which were due to gains in government employment.”

my brain hurts

fuu's picture

They were under the couch.

Cursive's picture

Blah, blah, blah.  The NFP number for September doesn't keep pace with new entrants into the labor force.  Nuff said.  I care about the household survey like I care about the ADP report.

Cognitive Dissonance's picture

"Rape me, beat me, call me nasty names. But I'll do anything to keep the pain away." - Greek citizens and politicians.

<Coming soon to America.> 

<<You don't really believe those employment you?>>

djsmps's picture

I cannot believe the number of people who believe the 7.8% is real, and that Obama is god.

CrimsonAvenger's picture

And they can all call each other on Obama Phone to talk about it.

asteroids's picture

An analysis and report on a number that is clearly made up and manipulated in the first place? A waste of time on top of a waste of time. What a waste.

Dr. Engali's picture

It's too bad we aren't reading the postmortem about Goldman.

jekyll island's picture

Goldman=Government.  You will read their obits on the same day.  

Everybodys All American's picture

If this number were true. Which undoubtedly it's not. How was the QE infinity justified by the Fed? There mandate is unemployment and price stability. Unemployment is now suddenly at a 44 month low.

tip e. canoe's picture

"Finally, the way the Fed has engineered the Slow Burn to date is to continually offset monetary inflation with labor deflation. It is worth contemplating how much labor deflation will be required to offset QE3 and how sufficient additional labor deflation might be engineered. Ben Bernanke was quite clever to tie QE3 to unemployment. The problem has become the solution, which is the basis for QE-Infinity."

(h/t blindman)

watch the video in top-right corner

saints51's picture

I asked myself the same question. The only answer I can seriously come up with is to continue fleecing the middle class because they know the end is very near. I may be totally wrong.

I will say this is the question that should be asked by everybody to the President and Fed. I would love to hear their response because this question traps their ass.

RiverRoad's picture

And you can bet they're not gonna let those jobs increase fast above all.  God forbid regular people get any of this largess in their hands.....we'll have INFLATION.

Rainman's picture

Hell yeah !.....187,000 newly hired gubmint leeches supported by 532,000 new part time employees !! This will work !


mktsrmanipulated's picture

Liesman says "fuck you Rick" to Rick Santelli on cnbc this morning....@ 8:20 on this video listen to becky then liesman

mktsrmanipulated's picture

I hope Santelli kicks LIESman's ass.... 

Hammerabi's picture

QE3 = $85B/month now, Tyler? Did I miss something? Thought it was 40

helping_friendly_book's picture

40 billion in MBS

45 billion in continued twist through 01/01/2013

(40+45) billion = 85 billion

helping_friendly_book's picture

I am, still, not convinced. 40 billion dollar/month continued influx to the MBS market means illegal workers keep their jobs.

Obama is right when he said "You didn't build that!" because you didn't; a Mexican did!

The banks are still working their way through 4 million, at least, foreclosures a result of 27 million underwater mortgages. That is more than one half of the 55 million mortgages in the US (2007).

Source: file:///C:/Documents%20and%20Settings/saidmr/Pages%20from%20fcic_final_report_wallison_dissent.htm

I ripped it from the FCIC Dissenting Opinion, Wallison, page 448.

So how is building 40 billion dollars of future slums going to help anyone when nobody has 20% down and there are still millions of foreclosures back logged? 

This policy is preposterous absurdity and does not qualify as a real economy. 

A communist society? Perhaps!

Shalom is just building more foreclosures.

helping_friendly_book's picture

I get a down arrow because I used his, actual, middle name?

So sensitive you are Joohbeone!

fuu's picture

"Voted for Bill Clinton twice and would have voted him dictator for life if given the chance."

I junked you for that, and for bitching about being junked.

helping_friendly_book's picture

Not suprised. You probably didn't even understand my post.

Junking me for my profile? Pretty lame don't ya' think?

At least I didn't vote for Bush four times. Not proposing you did. Just saying.

I was about to say "To bad the MiG missed you", but that would be mean.