Once again, with feeling:
The most over-analyzed, over-emphasized, least-understood data point of the month comes out today. I guess we could probably add “over-traded” to that list.
Why do am I critical of how we discuss this point?
Consider these reasons:
1) The overall trend in hiring is what matters, not a single snapshot
2) In a Labor Force of 140,000,000 people, the change in net monthly hires minus fires is a miniscule one tenth of one percent. (i.e., 140k out of 140m)
3) If you use the correct long term hiring cycles, you cans get a pretty good estimate of likely hiring patterns. Following credit crises, we should expect a mediocre but improving job creation.
4) The overall NFP number is subject to heavy revisions as new data becomes available; hence, the preliminary number is unreliable.
5) Like all models, the BLS model is flawed, but not useless. That is why we prefer to look at the overall trend versus any specific datapoint (That also eliminates the Recency Effect).
6) While Hiring is a lagging indicator, we can look at the 3 leading components each month to see if we are improving or backsliding: Hours Worked, Wages, Temp Help.
Okay, let’s take a quick look at the numbers:
Consensus estimates for Payrolls are to see gains of 146,000 workers versus December’s +103,000 (Bloomberg survey). The economists also expect the jobless rate to rise one tick to 9.5%.
~~~
BLS data released at 8:30am
http://www.bls.gov/ces/
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
Ouch!
36,000 net jobs
I said Mediocre, but that’s fugly !
only 36K but rate went down .4, time to rally on…not many new jobs BUT people are throwing in the towel in their job search, another 4% abandon looking for a job and we will have our recovery!
Birth Death Adjustment model is being revised eff. Feb. 4, 2011. http://www.bls.gov/cps/duration.htm
And shocker, BLS validates something I pointed out almost exactly a year ago: http://www.scribd.com/doc/26493859/Is-the-Duration-of-the-Current-Recession-Distorting-U3
and now admits that U3 has gotten seriously distorted due to the duration of the downturn. However, the adjustment will only be prospective, so this is “too little too late” to get an accurate fix on where we are currently.
To whom should I send my invoice at BLS?
The best part is…..we are rallying in the futures? HUH?
I guess this might guarantee QE3, or maybe people feel like we can’t top on bad news?
Check out the all important 64.2 participation rate. Hey, BLS! Lets get this down to below 60 and I’m sure you can get the U-3 rate to below 6%. Yes, sarcasm. Any commentator or analyst that downplays or ignores this drop in employment participation deserves to be ignored too. The U-6 is a better indicator of employment stress in the labor market.
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tHIS HAS GOT TO BE ONE OF THE MOST EMBARASSING DAYS FOR OUR GOVERNMENT. We have finally reached the point where truth does not matter……all that matters is Obama looks good. I know NO ONE who got hired lately. This is blantant bullshit and I call out Ben Bernanke to answer to questions.
We have gone way past a banana-republic. We are now a donkey-republic.
curbyourrisk
That is a bizarre comment, this is considered a pretty punk payroll report.
If they were going to LIE it would have been 212,000, not 36k
WHY…..? WHY….? Shaking my fist toward heaven……..
I needed a good rally to fade and I only got 3 lots off on my scale pre announcement….. Now we’re going to have Ben bending over for the market until next week….
Econolicious
payroll bad but not real bad the 40+ down in messengers after up last month is an oddball the jobless rate is news ellen Zentner got that right my extra tip puts and other bond short actually a little ahead so far
A lot of boomers dropping out of the labor force earlier than expected. Good for U3 but problem for long-term economic growth.
curbyourrisk-
dude- I am lost on your post- what lies? The 36K print, the 9% UE rate?
CNN “expert” says the unemployed have to “be patient”. Thats quite a message to give people who have already been out of work a long long time.
There are an awful lot of people who are too young to retire but “too old” to find work consistent with their education and experience who have been out of work a long time and will likely never find a “real job” in this environment, this will cast a pall over the country for a long time in a much broader sense than just the unemployment calculation. The number of people receiving food stamps continues to grow even after recovery has been declared.
This country needs to find a way to utilize the talents of all it’s citizens, even the unemployable over 40. I’m sure employers shun older workers to avoid health care and other age & seniority benefits. Some sort of national health care system is necessary to end this disposable employee approach.
The best part is to hear them talk about how this number isn’t that bad — I mean, the weather last month was terrible! That was the problem. And look — the unemployment number went down a lot!
The terrible number plus the high drop in “unemployment” combined show a further slowdown, because out of work people got discouraged and gave up. They don’t give up when they see things getting better.
It’s a bad number, and I’m sick of the spin. I completely agree with the concept of looking at the trend line, but I would add to that a look at the types of jobs being added, who gains from the trends in employment and who are the losers. And while the overall trend is going (generally) up on a very light slope, the underlying trends in job creation tell the story of an economy permanently shifting downwards and failing to realize huge numbers of people’s potential and also failing to provide them satisfying, decent-paying work.
@Barry “6) While Hiring is a lagging indicator,”
I’ve been listening to this gospel for about 2 years or so. There comes a moment when you must come to terms and realize that this is a current indicator and not a lagging one. Unless of course we now think that and indicator that lags more than 7-8 years (my guesstimate of how long will it take to recover to normal) is actually an indicator of anything
Julia-
first tip of the day- THEY DON’T CARE . . .it’s irrelevant to their world view-
they’re going to spin it- even if it is saying- see folks . . .at this rate- as can be seen by the chart everyone will be back to work in 30 years-
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