This page has been archived and commenting is disabled.
Something Stinks Inside The BLS Jobs Data
Submitted by Jeffrey Snider, via Alhambra Investment Partners,
The juxtaposition could not be more fitting with all that is transpiring at this moment in economic history. On Monday, the headlines were filled with, Black Friday Fizzles as Sales Tumble 11% and ‘Black Friday’ Fades as Weekend Retail Sinks 11%. Then the “employment” report comes out and now the headlines are, More Jobs and Higher Wages: U.S. Recovery Starts to Hit Home and Hiring Surge Gives U.S. Expansion a Lift Into 2015. The problem is one of mutual exclusivity as both narratives are totally inconsistent with each other even when factoring any kind of shift in consumer buying patterns.
The shopping trend is itself a statistical creation, but one with more raw and basic grounding in actual outcomes. The Establishment Survey is, to put it mildly, one of the most adjusted and calibrated (not to mention revised) figures in the economic calendar. That is especially true of its inclusion of a statistical process called “trend/cycle analysis” and that supposition’s close relation to the plucking model of economic cycles past (and way in the past now). You can obviously tell from just that initial formulation where my sensitivities and inclinations take my analysis.
The problem starts and ends with our current economic circumstances, particularly as it looks nothing like historical experience with other business cycle occurrences. We are conditioned to think these economic statistics are good indications of actual economic condition, but that only applies if the future (or the current) looks like the past where these “rules” were all developed.
The former head of the BLS, who was in that position until 2012, told the New York Post last year exactly that:
All parts of Washington’s data-collecting machine adjust to smooth out the bumps caused by the seasons of the year. But the recession that started five years ago was so severe and the recovery so anemic that the seasonal adjustments have been thrown off.
I would add that I don’t believe it is just seasonal adjustments have been affected, but that it goes deeper to their very benchmarks (the Establishment Survey really only measures variation). To use a sports analogy, baseball statistics were thrown way off comparing the game in the 1960’s to 1980’s and early 1990’s to the steroid era that followed. The game never changed, nor did how the statistics were calculated, but the players sure did (especially the hitters). It becomes impossible to use a single suite of statistics to compare pitchers in, say, 1977 vs. their counterparts in 1997.
If this was the best run of job growth and payroll expansion in “years” then that should show up someplace else, and in the most important figures. You would expect that at the very least payroll taxes would be extremely robust because you can’t have a job without paying taxes (allegedly).
There are tax law and rate changes to consider when comparing tax receipts from one fiscal year to the next, but overall these conform closely to combined observations about growth – with the notable exception of 2014. That becomes even more stark when observing the breakdown between individual withheld and non-withheld.
How can there be the same growth rate in withholdings in 2014, which includes FICA, as 2011? The tax cut “stimulus” of a reduced FICA rate applied in FY 2011 but not in 2014, meaning that holding all variables constant, as economists like to do, the economy or payroll expansion in 2014 must be lower or reduced compared to 2011 which wasn’t all that great. In fact, receipts from withheld income in 2008 were just shy of the same 4% seen in 2014, which is also seriously below the 6.7% average from 2005-07.
In non-withheld income the picture is even worse. This segment composes individual taxes paid to the treasury by quarterly estimates. Because of the nature of income driving estimated payments, this segment of individual taxation is rather sensitive to the economy.
Again, you see the pattern at about what you would expect of the Great Recession “cycle.” The problem is that 2014 showed only 7% growth, or just a bit more than half of 2007 and not much better than 2008. In other words, tax receipts, which are actual dollar figures unadjusted by statistical conventions, are not matching the Establishment Survey or the unemployment rate. There is absolutely no evidence to suggest we have just witnessed the best jobs market in decades; rather to the contrary, the pace of taxation is looking quite sparse and paltry.
That, of course, leads to the usual conversation and presentation about the payroll statistics for the latest month. Again, the labor force does not match the “narrative” either, instead quite corroborative of tax receipts.
I think at this point, if you think the economy is growing and poised upon a major breakout that nothing here will change your mind. Supposition works in both directions, and rightly so. But anyone that looks at these payroll reports and views them the least bit skeptical, especially how it doesn’t, like the election, match individual perceptions, then there is much to be said about statistical systems where data series diverge significantly.
I find it extremely odd and troubling that starting with January 2013, the Establishment Survey started moving in nearly an exactly straight line (benchmarks are important). That observation is made more curious by a memo that was just sent out by the Census Bureau to its field offices (the BLS crunches the numbers, but contracts out with the Census Bureau to actually conduct the surveys).
These harsh conditions were disclosed in the agreement attached to an Oct. 1 memo — both of which were obtained by The Post — from William Hatcher, associate director of field operations. The memo itself didn’t get to workers until mid-November, according to sources.
In the memo, Hatcher tells workers that Census wanted to maintain its “unblemished reputation for producing quality data.”
In other words, they were told that there would be penalties for cheating on the surveys, which apparently is tied to suggestions of a rash of field workers completing surveys for people never actually surveyed. The reason for doing so, spelled out by the New York Post, is that compensation is tied to a 90% completion rate.
Again, make of that what you will, but I think that this all more than suggests that even the most mainstream of statistics need proper skepticism and thus corroboration. The mystery of Black Friday was not that people were too busy working to shop as might have been the case if the payroll report was as “unblemished” as under past economic circumstances of the plucking model, or something close to it. More simply, I think the ability of these statistics to produce close correlations with other facets of economic monitoring and accounting has been seriously compromised at least by the disparity in data sets and perhaps even more nefariously.
Oil prices and yield curves would certainly concur, as would a huge swath of the electorate in the developed world (with emerging markets none too enthused about all this assumed robust US growth either).
»
- 15907 reads
- Printer-friendly version
- Send to friend
- advertisements -
We hired some folks.
yeah... its smells like seasonal adjustments. Hey Obama.. my dog smells better when she farts than these numbers.
No shit Sherlock that data is cooked, now just figure out a way to get the [du]masses to realize this then, maybe, we can get some shit done about this. Oh never mind Football is on -- All is well, pass the chips
We are never going to get this turkey off the ground if we keep sticking with the facts. Every form of fraud and stimulas has been tried and all that is left is outright transparent lies.
ok, but if they were going to cook the books in such grand style, wouldn't they have done it in time for the elections? How do you explain blockbuster numbers that come out one month too late?
We fired some folks.
We re-hired some folks.
We fired some full-time folks. We hired two-for-one part-time folks. Job growth 100%!
my best friend's mother makes $82 /hr on the internet . She has been without work for five months but last month her pay check was $20842 just working on the internet for a few hours. browse around this website... www.yelptrade.com
I know so many people working under the table for cash to make ends meet it's shocking. You'd be amazed how little you have to earn when you don't have to pay any taxes on your earnings.
Anybody does work around my house gets paid cash. They ALWAYS return my phone calls promptly next time around.
THat's got to be at least part of the divergence. And, of course, all those new jobs in the survey (ALL!) are crap minimum wages jobs anyway, paying little in the way of tax revenues to the government.
Thus the reason why many want to get rid of cash. It's purely environmental........save the trees!! LMAO.
Which is why we need silver and gold to trade for goods and services
"Something Stinks Inside The BLS Jobs Data"
Yeah, the BLS. Hard to get the smell of bullshit out of things.
An American, not US subject.
....but think of all those shovel ready jobs it creates.
Barter and Black Market Bitchez !!!!
its really simple, people have so much money they dont need black friday discounts nore need to work full time.
There!
That's what the sheeple are claiming on the lame stream media financial sites like CNBS and MarketCrotch. Those over 55 are all wealthy and retired early, which is why the labor participation rate is the lowest in 37 years. People under 25 are all getting their masters and PhD's, which is why they're all working part-time in low-paying retail and service industry jobs. People are so wealthy they no longer need black friday weekend ssles.
We BLS'ed some folks.
No worries. Gas prices are now low enough the bastards can put their precious 'gas tax' in place. f
Gas prices are so low...
we could almost afford to get the fuck out of here if there was someplace else to go.
Compensation tied to completion rate.
America being at the smelly level of corruption to which it has descended for at least the past thirty years of the neoliberal take-over, we know what that formula means.
Shit, you could make money tilting your made up data to the benefit of the highest bidder while you watched internet porno from home. On bathroom breaks and pizza deliveries, I suppose.
Sometimes it makes me wish I had a massively popular financial blog so I could sell out.
https://en.wikipedia.org/wiki/Neoliberalism
Oh yeah, I thought it was funny that I got a letter with my real estate tax bill stating they would now accept monthly payments. But they would only spread the payments over 6 months and if you missed just 'one' payment the whole agreement was void and you wouldn't get any of your money back. What a deal i'm sure those behind will be signing up left and right! LOL.
I hate those bastards btw..........the one group that can keep what they have a afloat but screwing everyone else. They use the economic lies coming out of DC to justify these BS taxes. Of course I think personal real estate taxes should be illegal period.
The only (half way) reasonable tax is excise tax, and even that is open to abuse and corruption.
Income tax is ABSOLUTELY EQUIVALENT to extortion.
'Give me your money or else'
If I do it, it's a crime. If the government does it it's OK???? WTF?
Two things
1. if it comes from the goverment i automatically assume it to be either a lie, incompetence or both until proven otherwise
2. Neither me, my family, my extended family, aunts uncles, friends nor aquantances to my knowledge have ever participated in any of these surveys except the Ten year Census. Just saying.
Trim Tabs analyses the data. It bases estimates on tax withholding which is best since 2000. There. Is going to be an income tax cut in Massachusetts because of the huge state Budget surplus. By the way no more bleeding heart articles on the trophy generation known as millennial. They are a creation meaning the bleeding heart whining from the horse shit coming out of. Cnn. You know the horseshit that Cnn puts out at every airport and worse these millenials are eating up that today interview with Ms Leslie Turd Brown. Of course millenials can't save and there wages are down but most are too stoned on heroin and spend thousands on tattoo ink which doesn't do much for ones employability. It's all about personal responsibility. If you have been left out of the best most underreported job market since 1999 look in the mirror but please stop listening to the horseshit coming out of. Cnn and the. TODAY SHOW.
most under... fuck it, obama has gerd while he fucks usa
recovery is headed for the stratosphere, just like generic pharmaceutical prices, hold on!
Market thoughts for this week:
www.thecrucible.us
Farcism.
Look it up.
Do yourself a favor and look up 'marla zerohedge' also.
The fraud has been overtly recognizable for a VERY long time.
It shines and stinks like a rotten mackerel by moonlight.
i blame bush? ahhh iiii emmm ahhhhh yeah, thats right bush,trim dat ting
At the grocery store a few people ahead of me used their food stamp cards. I asked the checker if the number of food stamp card users she was seeing seemed to be about what it was since the market crash in 2008, less, about the same or more? Her answer: Much more! If that isn't an indicator of street level truth I don't know what is!
What grocery shop to you shop at? I shop at Trader Joes in Acton MA and Donelons in Lincoln MA. I have never seen anyone use an EBT card as I have never seen anyone use one at the Whole Foods in Cambridge MA near Central Square..
I have never seen someone pay with a welfare card either. But one third do says my daughter the cashier. If they hand the cashier a card or swipe it themselves, is it visa or EBT? (welfare) who knows unless you are spying and i'm not. More concerned about my bill!!
Exactly! The only time I ever noticed was when the person in front of me was trying to buy a salad bar salad at the Stop&Shop and the cashier told them it was "prepared" food and EBT couldn't be used. I guess it is prepared since someone dumps the crap onto the salad bar bar but is that really different than the guy slicing meat at the deli or stocking crap on the shelves.
EBT at WFM - you're kidding, right? idjit
MDB is that you?
My teen daughter is a cashier at a large grocery store in a metro area of plus 100,000 and she tells me one third pay with a welfare card!! You'd never know it by looking at the people. They look middle class to me.
People got hung for less at Nuremberg.
My small business customers in the upper Midwest have told me business has been slow for the past year! I was working in a small town in South Dakota this past week. 15 years ago that town had 4 bars. It now has zero! Oh, the gas station turned part of their building into a bar. Still looks like a gas station, which it is. The last bar to close was the Bowling alley and it's bar. It's cheaper to drink at home and if one can't afford to do both, you drink at home. This town also has an Alco store and it is closing as the chain went bankrupt. http://www.bloomberg.com/news/2014-10-13/alco-stores-files-for-bankruptc...
Another factor in declining bar business is DWI checkpoints. Same thing happening here in Appalachia. Bars closing.
Reason is that a checkpoint can bust you for DWI even if you're driving fine.
In the days of old, if you drank a few and could keep your car in between the lines and at the speed limit you could have a few drinks with your buddies and get home safely,
Now with the Nazi checkpoints, you can get a DWI (NC pushing to lower BAC to .05 now) just by showing up with 3 beers in you.
Nevermind that many people can drive better with 3 beers in them than most drivers who are as sober as a churchmarm.
The local badge-thugs just wait right down the street, then aggressively tailgate any car seen leaving the bar, hoping the provoke the driver to goose the throttle or tap the brakes, as most people normally do when being aggressively tailgated.
Do that though, and you will get fucked.
On the other hand, try aggressively tailgating a cop car and watch what happens to you.
I don't drink anywhere but at home. I'd rather not pay $5 for a beer then get either entrapped or caught in their fund raising seine.
All the laws and regulations are taking the fun out of life, because it might be dangerous.
A nation of limp wristed milquetoasts ruled over by psychopaths and bullies. For our own good.
Uh huh.
We made-up some folks
"Lies, damn lies and statistics." And when the numbers are from the government, lies and statistics are one and the same.
From Forbes article 6 months ago:
"Where jobs are concerned, Texas has consistently outperformed the national economy in terms of job creation and rate of unemployment in every month since the advent of the Great Recession and the discovery of the Eagle Ford Shale play, both of which took place in October of 2008. Indeed, during the 24 month period from July 2009 through June of 2011, Texas created 49% of all new jobs created in the United States, and the vast majority of those jobs were either directly or indirectly the result of the state’s oil and natural gas boom, centered in plays like the Eagle Ford in South Texas, the Permian Basin of West Texas, and the Granite Wash play in the Texas Panhandle."
Yeah, lower oil prices are great. Oil field jobs are six figure jobs, not minimum wage. During CAT earnings call they specifically mentioned Oil and Gas was their only business unit with growth. Yet, stock rocketed higher as oil prices fell. Go figure...