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Shockingly Large BLS Adjustments Should Be Main Focus Into NFP

Tyler Durden's picture


As we head into tomorrow's all-important NFP print, that will make or break the next month's market action and political posturing, we thought it worth highlighting just how statistically farcical the accuracy bias is in this data. As we pointed out in January, this time of year is prone to extreme seasonal adjustments and moreover, this year has seen these adjustments breaking records in their relative scale. As TrimTabs notes the seasonal adjustment for February is likely to exceed 1.5 million jobs, which is many times greater than the job growth the BLS is trying to measure. They expect a 149k add, down from their 180k add forecast for January, which is well below the 210k consensus estimate but we note that the difference between the highest analyst estimate (+275k and no its not Joe LaVorgna) and the lowest (+125k) is entirely covered by a mere 10% disturbance in the BLS-'force' of adjustment. Critically, this means that whatever they need the number to be, it will be though we hesitantly point out the sad reality that while we have added jobs for 17 consecutive months (apparently), the average 133k addition is still insufficient to absorb all the new entrants to the labor force, suggesting the unemployment rate is likely to remain above 8%.

Source: TrimTabs


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Thu, 03/08/2012 - 13:58 | 2236593 gjp
gjp's picture

Market still waits with eager anticipation at each NFP, but does it really matter?  This is a one-way, central banker market, news is irrelevant unless it concerns the latest 'liquidity program'.

Thu, 03/08/2012 - 14:05 | 2236617 Deep79
Deep79's picture

And that my freind is dangerous thinking. The market will turn, today, tomorrow, next week, next month, i dont know, but when it does turn it will be violent as everyone heads fro the exits.


The fact of the matter is nothing has changed, at all, the market has been lulled into sleep by all these injections, but when the tide turns, and it will, dont kid yourself by thinink this will rise forever, it will be nasty




Thu, 03/08/2012 - 14:28 | 2236676 Common_Cents22
Common_Cents22's picture

The "market" is no longer a market of wide varities of individuals.  It is a homogenous group of central bankers, money managers, and computer bots.   You have to get inside their minds to understand the market these days.

The concentration of money/wealth will cause huge dislocations when they all decide to grab a chair before the music stops.    Because they are one.

What keeps the "market" going is new taxpayer money/debt, otherwise it'll implode.

Thu, 03/08/2012 - 14:56 | 2236801 redpill
redpill's picture

And suddenly the Labor Department is getting very very nervous about getting ahold of any additional details of just what is going on in the innards of their data....

Thu, 03/08/2012 - 16:37 | 2237113 CompassionateFascist
CompassionateFascist's picture

Here's news U can use: the "unemployment" rate is, for the discrete individual, either 0% or 100%. For me, now 100%. And by the way, silverbugs, I need $40/oz by 15 April. So get to work.

Thu, 03/08/2012 - 14:33 | 2236687 TruthInSunshine
TruthInSunshine's picture

If insane governmental red tape, taxation, misspending and bureaucracy, along with El Bernankio's mission to misalign as much capital and investment as possible (thus creating larger, highly concentrated asset bubbles), gets another 10 million unemployed but-still-seeking work to give up for good, we'll get to that arbitrary 5% 'full natural rate of employment' level soon.

Hey! If gasoline rises in price to a level whereby it renders travel back and forth to work and home a net-negative yielding activity, that alone will go a long way to  pulling off this trick!




Thu, 03/08/2012 - 14:46 | 2236759 candyman
candyman's picture

The way this admin. changes the goalposts every day why not change the Official Rate to the not seasionally adjusted U-6 rate which in Jan. was 16.2% <sarc>

Thu, 03/08/2012 - 14:07 | 2236632 ACP
ACP's picture

Yes...all that matters is how much illegal manipulation is needed to keep the market permanently overbought.

Thu, 03/08/2012 - 14:12 | 2236640 Deep79
Deep79's picture

I am a firm believer of markets, yes they are being manipulated to death, but at the end of the day markets always win


There is not enough money to throw at it, they would have to print 30 trillion to stem the tide, maybe more, 


Markets will always win over governmnmet manipulation





Thu, 03/08/2012 - 14:28 | 2236680 Cdad
Cdad's picture

I would tend to agree...but the problem is, we no longer have a market.  What used to be a market is now...well, it is much more like a great big policy tool. Good luck "investing" in that.

Thu, 03/08/2012 - 14:38 | 2236714 TruthInSunshine
TruthInSunshine's picture

I am the sole wolf who gave deep an uptick.

Markets rule, central fractional reserve bankster drool.

Ya' just have to give it enough time.

We never had a national decline in housing prices as of 2006, from the lips of Chairman Ben El Bernankincide himself, so his policies helped usher in the very thunderclap of market forces reasserting themselves as Boss Hog, Bug Cheese, Head Honcho, The Shizznat.

Patience, grasshopper bitchez.

Thu, 03/08/2012 - 14:45 | 2236754 Cdad
Cdad's picture

Nothing in my comment was to suggest direction.  The "policy tool" can go up or down violently.  My point is that these moves have nothing to do with value, the economy, data, earnings, dividends, or charts.  There is simply the Minsky moment, and the non Minsky moment.  Everything between is simply co located, front running terminators at war with each other.

There is no market.

Thu, 03/08/2012 - 14:59 | 2236794 TruthInSunshine
TruthInSunshine's picture

There is no market now.

That would be my sole correction.

I'm just saying that it's never different this time, and no central prankster has ever been able to succeed long term with a charlatan* "put."

*[A charlatan; also called swindler or mountebank)

I hope I spelled that correctly, because I got in deep trouble the other day vis-a-vis:



p.s.- Mountebank is one of the most underused and underappreciated words ever. I'm going to pepper much of my future commentary with that word. Charlatan is good, but has become in vogue with the ascendancy of The Bernank.

Thu, 03/08/2012 - 15:00 | 2236814 Deep79
Deep79's picture

I upticked you


thats what i was trying to say, long run they can't not do it, short term ya sure, but eventually the market will break them



Thu, 03/08/2012 - 15:15 | 2236833 TruthInSunshine
TruthInSunshine's picture


I am stuck on this mountebank word. It's really got me excited.


moun·te·bank/mountibaNGk/ Noun:
  1. A person who deceives others, esp. in order to trick them out of their money; a charlatan.
  2. A person who sold patent medicines in public places.
    Synonyms: charlatan - quack - impostor More info » - - Merriam-Webster - The Free Dictionary

Used in a sentence:  When you look for the word mountebank in the encyclopedia, you will find Ben S. Bernanke's picture.

Thu, 03/08/2012 - 15:37 | 2236931 TruthInSunshine
TruthInSunshine's picture

Correction, two posts up, I meant to link chartalism, and not chartism.

My bad.

Thu, 03/08/2012 - 16:40 | 2237129 CompassionateFascist
CompassionateFascist's picture

syn.: Jew

Thu, 03/08/2012 - 21:39 | 2238136 Savyindallas
Savyindallas's picture

but there are lots of good jews. I know a few.

Thu, 03/08/2012 - 22:33 | 2238311 TruthInSunshine
TruthInSunshine's picture

Aye, there are, indeed.

Thu, 03/08/2012 - 14:35 | 2236701 czarangelus
czarangelus's picture

They'll print the 30 trillion. How much are electrons going for these days?

Thu, 03/08/2012 - 14:37 | 2236706 alien-IQ
alien-IQ's picture

Thanks for the laugh. I needed that.

Thu, 03/08/2012 - 14:26 | 2236675 Id fight Gandhi
Id fight Gandhi's picture

Fuck the market and BLS. Consensus at 210k? So we need at least 300 to get a algo move up, at consensus no real move either way. And a miss probably who knows? QE guarantee on the way.

Thu, 03/08/2012 - 14:01 | 2236604 Jlmadyson
Jlmadyson's picture

Did you guys see the story this morning they are bringing in the guys that keep the nuke material safe to help keep the labor numbers safe before release every month. They don't likey any leaks.

Gallop says rate is going up not down. Play with the numbers all they like.

Thu, 03/08/2012 - 14:06 | 2236622 surf0766
surf0766's picture

Tell me what number has any credibility? I would just like one truth please.. We have to start somewhere. 1 is a good number.

Thu, 03/08/2012 - 14:01 | 2236608 surf0766
surf0766's picture

"this means that whatever they need the number to be, it will be" they have seen the secret

Thu, 03/08/2012 - 14:02 | 2236610 VisualCSharp
VisualCSharp's picture

They're just adjustment adjustments.

Carry on.

Thu, 03/08/2012 - 14:03 | 2236614 VisualCSharp
VisualCSharp's picture

The only number that matters is percentage of the total potential workforce that is employed.

Thu, 03/08/2012 - 14:35 | 2236698 Id fight Gandhi
Id fight Gandhi's picture

Which gets no press at all. Headline unemployment u3 is all that matters.

Thu, 03/08/2012 - 14:04 | 2236615 surf0766
surf0766's picture

This means people are optimistic and entering the workforce.  /s

Beam me up Scotty !

Thu, 03/08/2012 - 14:05 | 2236618 Everybodys All ...
Everybodys All American's picture

Does anyone remember if these numbers were ever this untrustworthy in past administrations? I have to be honest I don't know but I suspect that they are as untrustworthy as they have ever been.

Thu, 03/08/2012 - 14:11 | 2236639 surf0766
surf0766's picture

I do recall someone stating LBJ was the first to dork with employment numbers but I cannot remember the source. I would think the closer it came to falling apart the more outlandish and unbelievable the numbers would be.

Thu, 03/08/2012 - 14:30 | 2236686 alien-IQ
alien-IQ's picture

I might be mistaken but I think the method used to calculate the numbers was changed during the Clinton administration. I think that's when they redefined "unemployed" to mean "whatever we want it to mean whenever it's convenient"...but I'm pretty sure that's not the technical term for it.

But we at least can be sure of one thing: The numbers are complete bullshit.

Thu, 03/08/2012 - 14:06 | 2236625 alexwest
alexwest's picture

who nees trimtab/bls/etc ?

cbo feb 2012 monthly preview is out

hey hey hey .. eCONomy IS growing, according B(l)S there are more and more jobs around here, but somehow Feb 2012 receipts are down y/y (feb 2011).. and monthly deficit is mind boggling 229 bln ( bigger than feb 2011)

not long ago it WAS YEAR DEFICIT .. not its monthly


Thu, 03/08/2012 - 14:34 | 2236700 Non Passaran
Non Passaran's picture

"Spending by the Department of Homeland Security increased by $4 billion (or 19 percent)."

But Americans are now safer than ever!

Thu, 03/08/2012 - 14:06 | 2236627 Jlmadyson
Jlmadyson's picture

Oh and this nugget just in; CBO is projecting a record $229 billion monthly deficit in February.

Highest ever. 42 cents for every dollar.


Thu, 03/08/2012 - 14:12 | 2236641 defn8Dog
defn8Dog's picture

Did an announcement on Greece just get delayed until tomorrow?


Thu, 03/08/2012 - 14:18 | 2236650 AN0NYM0US
AN0NYM0US's picture

by this time tomorrow

Greece will have been deemed to be fixed and Euroland safe

The NFP will be a Goldilocks number not too good soo as to kill qe3 and not so bad as to hurt the things are improving narrative - it will be just right

Next week onward and upward S&P 1400 just around the corner

Thu, 03/08/2012 - 14:44 | 2236747 stocktivity
stocktivity's picture

By this time tomorrow, Pisani, Maria, and the rest of the CNBC cheerleaders will have their 13000 pom poms and hats on leading the cheers. What's that old saying..."Don't fight the Fed...I mean cheerleaders."

Thu, 03/08/2012 - 14:18 | 2236651 rosiescenario
rosiescenario's picture

The only number that really matters is not the body count is the income of those who are employed.


For example, if we had seen no change in the employment numbers but higher paying manufacturing jobs had been replaced by minimum wage ones, would we be saying the economy is just fine?


These body counts we get are a subterfuge and no one appears to be calling it that.

Thu, 03/08/2012 - 14:21 | 2236664 rosiescenario
rosiescenario's picture

....reminds me of the Vietnam War era....every night our generals would give us body count reports....and we know how that turned out.

Thu, 03/08/2012 - 14:37 | 2236708 Id fight Gandhi
Id fight Gandhi's picture

iPads purchased will soon make line item metrics.

Thu, 03/08/2012 - 16:34 | 2237106 rosiescenario
rosiescenario's picture

...kind of like the internet bubble period when page views and clicks were the touchstone for valuation?

Well, at least Abbey is still around giving advice to those with short memories....

Thu, 03/08/2012 - 15:47 | 2236976 Dr. Gonzo
Dr. Gonzo's picture

No. The don't report it because they want Americans to all have miniumum wage jobs without benefits. Easier to control them with gubmint cheese. 

Thu, 03/08/2012 - 15:47 | 2236982 Dr. Gonzo
Dr. Gonzo's picture

No. The don't report it because they want Americans to all have miniumum wage jobs without benefits. Easier to control them with gubmint cheese. 

Thu, 03/08/2012 - 14:24 | 2236672 adr
adr's picture

I'm still saying +225k NFP print and a rise in the unemployment rate of .2% in order to say that more discouraged workers are looking for work. That little nugget is to claim that the economy is getting better. The BLS can't put out a print under 200k or it may spook the market.

The unadjusted number will actually show a decrease of around 15k jobs and a further 600k falling out of the workforce altogether. The labor participation rate will reach 54% by June.

All the mainstream BS news is reporting that the rise in first time claims can be written off because it is bouncing along the bottom. It was only a year and a half ago that claims needed to drop to around 250k to show an improving job market. Now anything under 400k is supposed to mean massive job growth. Yes 350k is now the bottom and consistent with improving job growth.

Thu, 03/08/2012 - 14:25 | 2236673 alien-IQ
alien-IQ's picture

More government lies? I'm shocked, SHOCKED I say.

Man...if I don't take a break from this type of news, I really am afraid I might just go fuckin postal.

Thu, 03/08/2012 - 14:33 | 2236693 stickyfingers
stickyfingers's picture

To paraphrase Stalin, "If one man is unemployed it's a tragedy, if it's millions, it's a statistic."

Thu, 03/08/2012 - 14:37 | 2236707 pelican
pelican's picture

This one man is going to save himself from unemployment and go to Afganistan.  After all, that is all we produce in this country anymore.

Thu, 03/08/2012 - 14:34 | 2236697 carbonmutant
carbonmutant's picture

What did we expect from an administration that thinks you can have a jobless recovery?

Thu, 03/08/2012 - 14:34 | 2236699 mayhem_korner
mayhem_korner's picture



Money Printing 101 is the freshman course.  With that pre-requisite under the belt, they're on to Job Printing 112.

Thu, 03/08/2012 - 14:36 | 2236704 rosiescenario
rosiescenario's picture

"Shockingly Large BLS Adjustments Should Be Main Focus"....bullshit. not fall for that red herring....the government wants us to get side tracked discussing these silly adjustments.


What they do not want folks talking about is the rate of decline workers who are still working have experienced in their standard of living due to both lower wages paid by the jobs now available and inflation of necessities.

Thu, 03/08/2012 - 14:38 | 2236713 John Law Lives
John Law Lives's picture

Fed dictum: Market must close green for week.

What could possibly be more galling than having the ChairSatan work to actively devalue the currency whilst insisting that the Fed not be audited...

Thu, 03/08/2012 - 15:07 | 2236831 MonsterZero
MonsterZero's picture

If market actions were based off the truth you might be onto something.

Thu, 03/08/2012 - 15:38 | 2236936 Vince Clortho
Vince Clortho's picture

"Shockingly Large BLS Adjustments Should Be Main Focus Into NFP" Did someone mistakenly insert an "L" between the B and the S?

Thu, 03/08/2012 - 15:42 | 2236952 Dr. Gonzo
Dr. Gonzo's picture

Tomorrow's NFP will be a great number. They probably knew the number months ago. The drama just involves getting some phony data to put around it to make it work. Then to have the CNBC folks bless it and not question the method all cream in their pants like the good investigative finacial reporter puppets they all are.  

Thu, 03/08/2012 - 16:15 | 2237026 Jim in MN
Jim in MN's picture

The Economist magazine ran this in last week's edition.


Official statistics


Don’t lie to me, Argentina


Why we are removing a figure from our indicators page


IMAGINE a world without statistics. Governments would fumble in the dark, investors would waste money and electorates would struggle to hold their political leaders to account. This is why The Economist publishes more than 1,000 figures each week, on matters such as output, prices and jobs, from a host of countries. We cannot be sure that all these figures are trustworthy. Statistical offices vary in their technical sophistication and ability to resist political pressure. China’s numbers, for example, can be dodgy; Greece underreported its deficit, with disastrous consequences. But on the whole government statisticians arrive at their figures in good faith.

What’s in a number

There is one glaring exception. Since 2007 Argentina’s government has published inflation figures that almost nobody believes. These show prices as having risen by between 5% and 11% a year. Independent economists, provincial statistical offices and surveys of inflation expectations have all put the rate at more than double the official number (see article). The government has often granted unions pay rises of that order.

What seems to have started as a desire to avoid bad headlines in a country with a history of hyperinflation has led to the debasement of INDEC, once one of Latin America’s best statistical offices. Its premises are now plastered with posters supporting the president, Cristina Fernández de Kirchner. Independent-minded staff were replaced by self-described “Cristinistas”. In an extraordinary abuse of power by a democratic government, independent economists have been forced to stop publishing their own estimates of inflation by fines and threats of prosecution. Misreported prices have cheated holders of inflation-linked bonds out of billions of dollars.

We see no prospect of a speedy return to credible numbers. The trade secretary, Guillermo Moreno, who led the assault on INDEC, is still one of the president’s closest advisers. The IMF has “noted” that Argentina is failing in its obligation to provide it with reliable figures, and made recommendations and set deadlines for it to improve. However, when Argentina ignores it, the fund merely wrings its hands, laments the “absence of progress”—and feebly sets a new deadline.

In 2010 we added a precautionary footnote to our statistical tables. From this week, we have decided to drop INDEC’s figures entirely. We are tired of being an unwilling party to what appears to be a deliberate attempt to deceive voters and swindle investors. For Argentine consumer-price data we will look instead to PriceStats, an inflation specialist, which produces figures for 19 countries that are published by State Street, a financial services firm. Had we switched to one of the provincial statistical offices still generating reliable figures, we fear it would have come under government pressure. One of the country’s best independent analysts made us a generous—and brave—offer of its data against legal advice and on condition that we conceal the source and lightly disguise the numbers. That might have generated confusion.

PriceStats is based in the United States, beyond the Argentine government’s reach. The oodles of online prices on which its index is based are tamper-proof. Argentina will no doubt say that it measures consumption by the rich rather than the poor, who may not shop online. But PriceStats’ methods are based on solid, peer-reviewed research and have proved an impressive match for (dependable) official figures in countries such as Brazil and Venezuela.

We hope that we can soon revert to an official consumer-price index for Argentina. That would require INDEC to be run by independent statisticians working unhindered. Until then, readers are better served by a credible unofficial figure than a bogus official one.

Thu, 03/08/2012 - 16:16 | 2237032 Shizzmoney
Shizzmoney's picture

Shocker: Massachusetts employment grew by just over 9,000 jobs in 2011, compared with initial estimates of nearly 41,000, according to the new data

I mean, how the fuck do you miss by that much?

Thu, 03/08/2012 - 17:23 | 2237264 Arvo Particleboard
Arvo Particleboard's picture

The Ministry of Plenty reports that current job production has tripled that of times past, and we have raised the employment ration to 0.71 jobs per able citizen. Moreover, these jobs may be gloriously divided between a number of Oceania's nutritious, rapid cuisine canteens. We have once again exceeded our quota, comrades.

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