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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%.

KEY NUMBERS:

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%.

MAIN POINTS:

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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Fri, 10/05/2012 - 10:25 | 2859537 Stackers
Stackers's picture

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

Fri, 10/05/2012 - 10:27 | 2859552 Debtonation
Debtonation's picture

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

http://research.stlouisfed.org/fred2/series/WAOAL?cid=32215

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.

Fri, 10/05/2012 - 10:31 | 2859569 SilverTree
SilverTree's picture

tantalum ? tungsten ? rhenium

Fri, 10/05/2012 - 11:01 | 2859707 Precious
Precious's picture

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

Sat, 10/06/2012 - 16:10 | 2863309 Pegasus Muse
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.

http://www.financialsense.com/financial-sense-newshour/big-picture/2012/10/06/03/john-williams/the-real-facts-behind-todays-fictitious-drop-in-unemployment 

Fri, 10/05/2012 - 10:31 | 2859573 redpill
redpill's picture

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

Fri, 10/05/2012 - 10:51 | 2859640 Dalago
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!

http://articles.businessinsider.com/2011-03-14/wall_street/30054398_1_se...

Fri, 10/05/2012 - 10:33 | 2859581 Dr. Engali
Dr. Engali's picture

Shopping malls and empty office buildings.

Fri, 10/05/2012 - 10:48 | 2859629 thomasincincy
thomasincincy's picture

wrecking balls

Fri, 10/05/2012 - 11:37 | 2859845 helping_friendl...
helping_friendly_book's picture

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

Fri, 10/05/2012 - 10:41 | 2859606 EuroInhabitant
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.

Fri, 10/05/2012 - 10:56 | 2859675 RSBriggs
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.

Fri, 10/05/2012 - 11:16 | 2859760 _underscore
_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.

Fri, 10/05/2012 - 11:37 | 2859843 Ned Zeppelin
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.

Fri, 10/05/2012 - 12:15 | 2859972 _underscore
_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.

Fri, 10/05/2012 - 10:24 | 2859538 taniquetil
taniquetil's picture

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

Inflation is coming.

Fri, 10/05/2012 - 10:35 | 2859590 RiverRoad
RiverRoad's picture

Don't worry; it ain't.

Fri, 10/05/2012 - 10:39 | 2859600 LawsofPhysics
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.

Fri, 10/05/2012 - 10:24 | 2859539 q99x2
q99x2's picture

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

Fri, 10/05/2012 - 10:24 | 2859542 jekyll island
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"

Fri, 10/05/2012 - 10:43 | 2859611 LetThemEatRand
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.

Fri, 10/05/2012 - 10:50 | 2859641 jekyll island
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.  

Fri, 10/05/2012 - 11:28 | 2859816 Curt W
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

Fri, 10/05/2012 - 11:37 | 2859846 Vagabond
Vagabond's picture

So I should just ignore inflation?

Fri, 10/05/2012 - 12:01 | 2859917 drchris
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.

Fri, 10/05/2012 - 10:25 | 2859545 Manthong
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

Fri, 10/05/2012 - 10:35 | 2859592 fuu
fuu's picture

They were under the couch.

Fri, 10/05/2012 - 10:28 | 2859555 Cursive
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.

Fri, 10/05/2012 - 10:30 | 2859559 Cognitive Dissonance
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 numbers......do you?>>

Fri, 10/05/2012 - 10:29 | 2859560 djsmps
djsmps's picture

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

Fri, 10/05/2012 - 10:41 | 2859607 CrimsonAvenger
CrimsonAvenger's picture

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

Fri, 10/05/2012 - 10:30 | 2859565 asteroids
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.

Fri, 10/05/2012 - 10:31 | 2859566 Dr. Engali
Dr. Engali's picture

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

Fri, 10/05/2012 - 10:52 | 2859654 jekyll island
jekyll island's picture

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

Fri, 10/05/2012 - 10:31 | 2859572 Everybodys All ...
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.

Fri, 10/05/2012 - 10:41 | 2859583 tip e. canoe
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."

http://solari.com/articles/quantitative_easing/

(h/t blindman)

watch the video in top-right corner

Fri, 10/05/2012 - 10:36 | 2859595 saints51
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.

Fri, 10/05/2012 - 10:34 | 2859580 RiverRoad
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.

Fri, 10/05/2012 - 10:37 | 2859594 Rainman
Rainman's picture

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

FORWARD !!

Fri, 10/05/2012 - 10:41 | 2859599 mktsrmanipulated
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

 http://video.cnbc.com/gallery/?video=3000120507&play=1

Fri, 10/05/2012 - 10:44 | 2859616 mktsrmanipulated
mktsrmanipulated's picture

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

Fri, 10/05/2012 - 10:47 | 2859624 in-Credible Banker
in-Credible Banker's picture

No.  He said "except you Rick".

Fri, 10/05/2012 - 10:44 | 2859618 Hammerabi
Hammerabi's picture

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

Fri, 10/05/2012 - 10:50 | 2859648 helping_friendl...
helping_friendly_book's picture

40 billion in MBS

45 billion in continued twist through 01/01/2013

(40+45) billion = 85 billion

Fri, 10/05/2012 - 17:03 | 2861082 Hammerabi
Hammerabi's picture

Thanks

Fri, 10/05/2012 - 17:38 | 2861184 helping_friendl...
helping_friendly_book's picture

Your welcome!

Fri, 10/05/2012 - 10:54 | 2859619 helping_friendl...
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.

Fri, 10/05/2012 - 11:29 | 2859815 helping_friendl...
helping_friendly_book's picture

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

So sensitive you are Joohbeone!

Fri, 10/05/2012 - 11:34 | 2859833 fuu
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.

Fri, 10/05/2012 - 11:55 | 2859877 helping_friendl...
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.

Fri, 10/05/2012 - 12:25 | 2860000 fuu
fuu's picture

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

Not when your profile declares a desire for dictatorship.

Feel free to be mean, I've heard worse from better.

Fri, 10/05/2012 - 13:38 | 2860247 helping_friendl...
helping_friendly_book's picture

Jeez! Don't you know sarcasm when you see it?

Like your f--king vote matters!

The Diebold Company has already programmed the election.

I don't know if you have noticed the your/my local police department transformed into para-military?

Hate to break it to you but, you live in a Dictatorship. Dictated by the FRBNY and proxies. No one dare speak their name.

Protestor getting, point blank, maced while they sit in the grass on campus, Police gunning down innocent  civilianswith impunity! BB n-yahu lecturing Congress on foreign policy?

I have traveled in counties with Totalitarian Gov't or dictatorships and there citizens enjoy more freedom than we have! 

The secret is: In America you can say what you want and get away with it as long as you don't do anything. In China you can DO, almost, anything and get away with it as long as you don't talk about it.

Going back to China in December, 3rd time, and can't wait. Much better Gov't. More caring for the people. If they have a disaster you see their Army HELPING the people.

Flood event? Send the PLA!

Earthquake? Send the PLA!

Typhoon? Send PLA!

Our Gov't doesn't do anything except take and do nothing!

Have fun hanging out in your bunker. The minute you try and barter with that PM they will come and tear you to pieces.

I am glad the MiG missed you. I was being SARCASTIC when I suggested it might hit you.

Have a nice day.

 

 

Fri, 10/05/2012 - 14:38 | 2860501 fuu
fuu's picture

Simon is that you?!?

Fri, 10/05/2012 - 20:58 | 2861799 helping_friendl...
helping_friendly_book's picture

Mary says what?

Fri, 10/05/2012 - 10:48 | 2859625 tradebot
tradebot's picture

yet another reason not to waste a vote on RP...Talk about "pee on my leg and tell me it's raining!"...Better wake up...right now, a talking head with initials CM is having another tingly moment running down his leg...it might be something dripping from his chin.

Fri, 10/05/2012 - 10:50 | 2859644 paulbain
paulbain's picture

I have just one question. How the heck can anyone believe that the unemployment rate in the USA is below eight percent?? I just don't get it.

-- Paul D. Bain

paulbain@PObox.com

 

Fri, 10/05/2012 - 10:53 | 2859666 Smiddywesson
Smiddywesson's picture

One would expect a bigger market bounce after so much hoopla. 

Now, we all know the market has an unlimited thirst for hoopla, so what has changed?

Is the Big Distribution about complete, or will we stagger along until election day?

Fri, 10/05/2012 - 11:01 | 2859706 otto skorzeny
otto skorzeny's picture

oil/copper are not impressed

Fri, 10/05/2012 - 10:55 | 2859678 Threeggg
Threeggg's picture

What a HOOT !

'Total employment 'highest one-month jump in 29 years'

Maybe more shocking, total employment, as measured by the Household Survey, rose by 873,000 in September to 142,974,000, the biggest one month jump since June 1983

http://newsbusters.org/blogs/noel-sheppard/2012/10/05/number-employed-people-rises-873000-september-highest-december-2008

Fri, 10/05/2012 - 10:58 | 2859688 Lost Wages
Lost Wages's picture

People were talking about how Bill Gross was going to make all this money on his MBS when this QE3 went through, but PTTRX hasn't done shit. Explain.

Fri, 10/05/2012 - 11:06 | 2859724 Rainman
Fri, 10/05/2012 - 11:29 | 2859820 Lost Wages
Lost Wages's picture

I mean stocks have been skyrocketing since QE3 and PTTRX just sits there.

Fri, 10/05/2012 - 11:20 | 2859784 Everybodys All ...
Everybodys All American's picture

The MBS purchases have just started from the Fools Reserve. He will make a killing I would expect.

Fri, 10/05/2012 - 11:31 | 2859822 Lost Wages
Lost Wages's picture

I guess if it's going to take time, it's going to take time. But he's got so much else going on in that portfolio anything could happen. Now he's buying European bank debt.

Fri, 10/05/2012 - 10:58 | 2859696 Seasmoke
Seasmoke's picture

thats correct and why the unemployment rate will go over 10% in November.......we all here at ZH knew they would get their 7.9% in October, no matter what

Fri, 10/05/2012 - 11:09 | 2859732 papaswamp
papaswamp's picture

Table A-9....go down under non-seasonally adjust and look at the Full time/Part time section.
Full-Time jobs decreased by 536,000
Part-time jobs increased by 1,311,000

http://www.bls.gov/news.release/empsit.t09.htm

Fri, 10/05/2012 - 11:14 | 2859747 semperfi
semperfi's picture

Goldman's a bunch of muthafucking liars too.   Let's have a write-up on what http://www.shadowstats.com has when its in.

Fri, 10/05/2012 - 11:14 | 2859750 Michelle
Michelle's picture

I'm impressed, IMPRESSED at how quickly QE3 turned the labor market around!

Fri, 10/05/2012 - 11:57 | 2859909 realtick
realtick's picture

Here's A Preview Of Where Employment Data Is Going http://chartistfriendfrompittsburgh.blogspot.com/2012/10/heres-preview-o...

Fri, 10/05/2012 - 17:36 | 2861180 helping_friendl...
helping_friendly_book's picture

Your welcome.

 

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