February 6, 2016

Saturday Off-Topic (Moderated) Open Thread (020616)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

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February 5, 2016

Barely News: Sanders’ Supporters Yelled ‘She’s a Liar’ at Hillary on Caucus Night

Five items found at the Politico filed late Monday or early Tuesday reported that supporters of Bernie Sanders at the Iowa caucuses, while watching a live feed of Hillary Clinton’s speech late Monday evening, began chanting “She’s a liar!” The chants grew until they “took over the room,” and didn’t stop until Sanders campaign officials cut off the live feed being shown.

This is barely news in the establishment press, which has obsessed over the Ben Carson-Ted Cruz-CNN controversy, devoting an obviously inordinate amount of time to it and, as Cruz himself has shown, getting it wrong in the process.

(more…)

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January Employment Situation Summary (020516); +151K SA Payroll Jobs, 4.9 Pct. Unemployment Rate; TRULY A DISASTER — Worst January Raw Job Losses Since ’09, Worse Than All Years on Record Except ’08 and ’09

Filed under: Economy,Taxes & Government — Tom @ 7:17 am

TOPSIDE NOTE: As seen below, this month’s Establishment Survey seasonal conversions wildly overstate the underlying data by about 75,00 – 100,000 jobs.

January’s raw total nonfarm and private-sector job losses are the worst in January since 2009, and represent the worst January on record except for 2008 and 2009.

_____________________________

Predictions, per Yahoo’s Economic Calendar: Briefing.com — 195,000 jobs added, 5% unemployment rate; “Markets expect” 188,000 and 5%.

The AP has been touting 200K job additions.

What I hope ends up being a gag post at Zero Hedge (turns out, not so much — Ed.), which has another post with a range of predictions from 175K-225K, speculates that a goose egg is a possibility.

The report will be here at 8:30.

Benchmarking: January is a month for huge actula (i.e., not seasonally adjusted) job losses every year as seasonal employees are let go. I’ll post tables later, but the benchmarks for this report to be a good one for payroll jobs, regardless of how the results seasonally convert, are as follows:

  • Total nonfarm — 2.7 million or fewer jobs lost.
  • Private sector — 2.15 or fewer jobs lost.

HERE IT IS (permanent link): It’s far from perfect, that’s for sure. More will be known after digging in —

Total nonfarm payroll employment rose by 151,000 in January, and the unemployment rate was little changed at 4.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several industries, led by retail trade, food services and drinking places, health care, and manufacturing. Employment declined in private educational services, transportation and warehousing, and mining.

Household Survey Data

Both the number of unemployed persons, at 7.8 million, and the unemployment rate, at 4.9 percent, changed little in January. Over the past 12 months, the number of unemployed persons and the unemployment rate were down by 1.1 million and 0.8 percentage point, respectively.

Among the major worker groups, the unemployment rates for adult men (4.5 percent) and Whites (4.3 percent) declined in January. The jobless rates for adult women (4.5 percent), teenagers (16.0 percent), Blacks (8.8 percent), Asians (3.7 percent), and Hispanics (5.9 percent) showed little change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged in January, at 2.1 million, and has shown little movement since June. These individuals accounted for 26.9 percent of the unemployed.

After accounting for the annual adjustments to the population controls, the civilian labor force and total employment, as measured by the household survey, were little changed in January. The labor force participation rate, at 62.7 percent, was little changed. The employment-population ratio (59.6 percent) changed little over the month but was up by 0.3 percentage point since October.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 6.0 million in January but was down by 796,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time jobs.

Establishment Survey Data

Total nonfarm payroll employment increased by 151,000 in January. Employment rose in several industries, led by retail trade, food services and drinking places, health care, and manufacturing. Private educational services and transportation and warehousing lost jobs. Mining employment continued to decline.

Retail trade added 58,000 jobs in January, following essentially no change in December. Employment rose in general merchandise stores (+15,000), electronics and appliance stores (+9,000), motor vehicle and parts dealers (+8,000), and furniture and home furnishing stores (+7,000). Employment in retail trade has increased by 301,000 over the past 12 months, with motor vehicle and parts dealers and general merchandise stores accounting for nearly half of the gain.

Employment in food services and drinking places rose in January (+47,000). Over the year, the industry has added 384,000 jobs.

Health care continued to add jobs in January (+37,000), with most of the increase occurring in hospitals (+24,000). Health care has added 470,000 jobs over the past 12 months, with about two-fifths of the growth occurring in hospitals.

Manufacturing added 29,000 jobs in January, following little employment change in 2015. Over the month, job gains occurred in food manufacturing (+11,000), fabricated metal products (+7,000), and furniture and related products (+3,000).

Employment in financial activities rose in January (+18,000). Job gains occurred in credit intermediation and related activities (+7,000).

Private educational services lost 39,000 jobs in January due to larger than normal seasonal layoffs.

Employment in transportation and warehousing decreased by 20,000 in January. Most of the loss occurred among couriers and messengers (-14,000), reflecting larger than usual layoffs following strong seasonal hiring in the prior 2 months.

Employment in mining continued to decline in January (-7,000). Since reaching a peak in September 2014, employment in the industry has fallen by 146,000, or 17 percent.

Employment in professional and business services changed little in January (+9,000), after increasing by 60,000 in December. Within the industry, professional and technical services added 25,000 jobs over the month, in line with average monthly gains over the prior 12 months. Employment in temporary help services edged down in January (-25,000), after edging up by the same amount in December.

The average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.6 hours in January. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.8 hours.

In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $25.39. Over the year, average hourly earnings have risen by 2.5 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $21.33.

The change in total nonfarm payroll employment for November was revised from +252,000 to +280,000, and the change for December was revised from +292,000 to +262,000. With these revisions, employment gains in November and December combined were 2,000 lower than previously reported. Over the past 3 months, job gains have averaged 231,000 per month. …

Benchmarking results:

  • Total nonfarm — 2.989 million jobs lost vs. -2.7 million or fewer jobs lost benchmark
  • Private sector — 2.475 jobs lost vs. -2.15 million or fewer jobs lost benchmark

These are HUGE misses. Each figure represents the highest January job loss since 2009. Each figure is also the highest job January loss on record except for 2008 and 2009.

The seasonal conversions don’t reflect this horrid underlying reality — at all.

I’ll insert the adjusted tables later, but for now just know that this year’s total nonfarm loss is 173,000 greater than last January, while the seasonally adjusted figure of 151,000 is only 70,000 below last January.  Comparisons to previous Januarys are mostly similar or even worse. One would have expected a seasonal conversion to only about 50,000 based on these comparisons.

In the private sector, this year’s job loss is 143K greater than last year’s, but the seasonally adjusted result of +158K is only 56K below last year’s  214K. Again, comparisons to previous Januarys are mostly similar or even worse. One would have expected a seasonal conversion to only about 75,000 based on these comparisons.

Here is the BLS data as of after the release:

NSAandSAestabSurvey0105toJan2016

(Noted at 10:15 a.m. — Ed.) I should also note that raw data not as bad as today’s in 2010 and 2011 led to seasonally adjusted results of 50,000 or below in both total nonfarm and the private sector. Even though they are technically outside of the five-year seasonal adjustment calculation window, they would support an argument that today’s seasonally adjusted results should have come in at zero or below.

More after a review.

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UPDATE (references are to seasonally adjusted data unlessotherwise indicated):

  • The Household Survey data shows an additional 1.1 million Americans employed in the past two months, compared to 413,000 in the Establishment Survey. I didn’t realize that self-employment had all of sudden become so appealing. (That’s sarcasm.)
  • The participation rates are edging up, but I suspect that phenomenon will come to a halt or go the other way in future months.
  • Full-time employment went up by over 500K, while part-time employment increased by only 5K.
  • “Not in labor force” is still over 94 million.
  • The raw data says that a net of 258,000 employees at temp agencies were let go in January. I suspect that this is far more than a Christmas season effect, and has a lot to do with companies getting rid of anything resembling excess cost in advance of a potential slowdown.

UPDATE 2: Zero Hedge notes that retail jobs added of 58K plus food service and drinking places (+47K) account for 70 percent of the seasonally adjusted jobs added in January.

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Friday Off-Topic (Moderated) Open Thread (020516)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

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Positivity: This LGBT advocate changed his mind about Christian bakers

Filed under: Positivity — Tom @ 5:55 am

From London, England:

London, England, Feb 3, 2016 / 03:47 pm

Peter Tatchell is a passionate human rights campaigner who outwardly voices his support of same-sex marriage and LGBT issues.

In 2014, he proclaimed his condemnation against Ashers Bakery in Belfast, Ireland, which was found guilty of “discrimination” because a pair of Christian bakers refused to ice a cake that would read “Support Gay Marriage.”

But now, two years later, Tatchell has halted his previous claims against Ashers Bakery, saying his change of heart has been motivated by the defense of freedom.

“Much as I wish to defend the gay community, I also want to defend freedom of conscience, expression and religion,” Tatchell wrote in The Guardian Feb. 1, saying “the court was wrong to penalize Ashers and I was wrong to endorse its decision.”

The court found Ashers Bakery guilty of discrimination in 2014 when the bakers denied Gareth Lee’s order for a pro-gay marriage cake. This verdict was backed in light of the Equality Commission of Northern Ireland, which sets laws against discrimination.

Although Tatchell continues to endorse same-sex marriage and believes the lawsuit against Ashers to be a well-intentioned blow against homophobia, he ultimately found that the legal action against the bakery went “a step too far.”

After further consideration, Tatchell believes Ashers was simply acting in light of its right to religious freedom – not out of political bigotry, as the court’s ruling suggested.

The “cake request was refused not because he was gay, but because of the message he asked for. There is no evidence that his sexuality was the reason Ashers declined his order,” Tatchell said.

“This finding of political discrimination against Lee sets a worrying precedent,” he said. …

Go here for the rest of the story.

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February 4, 2016

RIP, Maurice White

Filed under: General,Lucid Links,Marvels — Tom @ 11:35 pm

Mauric White (bottom row, center), the leader of Earth, Wind & Fire, who orchestrated some of the best music ever made, has died:

EarthWindAndFireEarly1970s

Listen (more here).

Fantasy:

That’s the Way of the World:

Can’t Hide Love:

Shining Star:

Maurice White’s music will shine on forever.

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But There Is No Serious Slowdown …

Filed under: Economy — Tom @ 1:56 pm

… it’s actually looking more like a shutdown.

The Baltic Dry Index is at an all-time low (HT longtime reader/commenter dscott):

BalticDry5yrsTo020216

Longer context, i.e., almost 31 years:

BalticDryInceptionTo020515

Zero Hedge’s concern almost a year ago to the day was that the index had hit 559. The 1986 record low was 554.

The latest value of 303 is 46 percent and 45 percent lower than those two values.

We have never been in such negative territory for this index, which “measures the demand for shipping capacity versus the supply of dry bulk carriers.” Excuse the semi-pun, but it’s totally in the tank.

____________________________________

UPDATE, 1105 p.m.: The Index has dropped below 300 for the first time ever.

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O … M … G: Productivity Goes Sharply in Reverse

Filed under: Economy,Taxes & Government — Tom @ 10:19 am

From the Bureau of Labor Statistics, wishing it was The Onion:

Nonfarm business sector labor productivity decreased at a 3.0-percent annual rate during the fourth quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output increased 0.1 percent and hours worked increased 3.3 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2014 to the fourth quarter of 2015, productivity increased 0.3 percent. … Annual average productivity increased 0.6 percent from 2014 to 2015.

For those who wonder how this is even possible, such serious dips have happened somewhat frequently during the Obama era, especially in the past couple of years:

productivity

This news couldn’t have come at a worse time, given that fourth-quarter GDP is already on track to be knocked down to about zero from its currently already weak annualized 0.7 percent.

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Initial Unemployment Claims (020416): 285K SA; Raw Claims (312K) Higher Than Same Week Last Year for Second Straight Week

Filed under: Economy,Taxes & Government — Tom @ 10:05 am

I’m late with this because I felt the previous post had to get done first — but here we go.

From the Department of Labor:

SEASONALLY ADJUSTED DATA

In the week ending January 30, the advance figure for seasonally adjusted initial claims was 285,000, an increase of 8,000 from the previous week’s revised level. The previous week’s level was revised down by 1,000 from 278,000 to 277,000. The 4-week moving average was 284,750, an increase of 2,000 from the previous week’s revised average. The previous week’s average was revised down by 250 from 283,000 to 282,750.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 311,956 in the week ending January 30, an increase of 16,296 (or 5.5 percent) from the previous week. The seasonal factors had expected an increase of 7,191 (or 2.4 percent) from the previous week. There were 306,643 initial claims in the comparable week in 2015.

The seasonal adjustment factor this was 109.5; for the same week last year, it was 108.0. That’s not a big difference, but if last year’s adjustment factor had been used on this year’s raw claims, the seasonally adjusted result would have been 290,000 (311,956 divided by 1.08, rounded).

I don’t see how rising year-over-year claims is a sign that things are still okay.

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AP’s Rugaber Ignores Mark Zandi’s Prediction of Near-Zero Fourth-Quarter Growth on ADP Conference Call (See Additional Comments)

On Wednesday, Christopher Rugaber at the Associated Press was tasked with covering ADP’s morning report on January private-sector payrolls. At 8:15 a.m., the payroll and benefits giant estimated that the economy added 205,000 seasonally adjusted private-sector jobs last month.

Rugaber also attended the 8:30 a.m. conference call which followed the report’s release. It’s clear that he was on it because his coverage, time-stamped at 9:18 a.m., contains quotes from economist Mark Zandi dealing with a key topic the sunnyside-up Moody’s economist addresssed in that call. So why did the AP economics writer fail to report Zandi’s acknowledgment that fourth-quarter economic growth, which the government estimated was an annualized 0.7 percent on Friday, could close in on zero in its February or March revision?

(more…)

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Thursday Off-Topic (Moderated) Open Thread (020416)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

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Positivity: Do mercy and justice contradict each other? Pope Francis says no

Filed under: Positivity — Tom @ 5:55 am

From Vatican City:

Feb 3, 2016 / 04:02 am

When God is described in the Bible as being both merciful and just it can seem like an identity crisis, however Pope Francis said it’s the opposite: rather than contradicting each other, the two actually go hand in hand.

“Sacred Scripture presents us with God as infinite mercy, but also as perfect justice. How are these two things reconciled? How can the reality of mercy be articulated with the need for justice?” the Pope said Feb. 3.

While these two characteristics can seem like opposites, “in reality it’s not like this, because it’s precisely the mercy of God that brings the fulfillment of true justice,” Francis affirmed.

The Pope made his comments to pilgrims gathered in St. Peter’s Square for his weekly general audience. He recently began a new series of catechesis on the topic of mercy as it is understood in scripture, in honor of the Jubilee of Mercy.

He said that when we think of justice, what might come to mind is an administration office where victims of an injustice appeal to a judge in court asking that justice be done.

This, Francis noted, “is retributive justice, imposing a punishment to the guilty, according to the principle that each must be given what is due him.” While certain wrongs can be made right in this way, he said that it “still doesn’t bring true justice.”

Instead, “it is only in responding with good that evil can be truly defeated,” the Pope said, explaining that what we find in the bible is path that teaches, allowing the offended person to approach the guilty party and invite them to conversion. …

Go here for the rest of the story.

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February 3, 2016

Barely News: Big-Rig Orders Are in a Steep, Year-Long Decline

One of the economy’s more important bellwethers has been on a steep year-long decline which shows no signs of abating this year. It’s barely news, and much of the sparse reporting seen has been incomplete and sloppy.

Truckinginfo.com reported today that “January was a tough month for truck manufacturers as Class 8 truck orders were down 35% compared to the previous month, according to a preliminary report from ACT Research.” This follows a 2015 calendar year during which total orders came in 25 percent lower than 2014. A Google News search indicates that only Reuters and the Wall Street Journal found this information important enough to cover. Reuters might as well not have bothered, given the sloppiness of its report as carried at CNBC:

(more…)

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Snitchbook: Facebook Enforcing Gun-Sale Ban by Relying on ‘Network of Users’

A great deal was made of Facebook’s announcement last week that it would ban private gun sales on both its flagship website and Instagram.

Readers who only followed establishment press accounts can be forgiven if they came away from most reports thinking that the firm has some kind of algorithm or recognition system for enforcing the ban. That’s not so.

(more…)

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January 2016 ISM Non-Manufacturing: 53.5 Percent, Down from a Revised 55.8 Pct. in December

Filed under: Economy — Tom @ 10:16 am

Predictions, per Yahoo’s Economic Calendar — Briefing.com, 55.2 percent; “Markets Expect” 55.0 percent

Last month was: 55.3 percent (any reading above 50 percent indicates expansion; NOTE — revised up to 55.8 percent in January’s report)

The report will be a bit of a test of whether the three-month contraction in manufacturing has had any impact on the rest of the economy. I would guess that if there’s potential for “surprise,” it would be on the downside, given the already-weak predictions for the first quarter and the just-admitted likely downward revisions to fourth-quarter GDP.

Here’s the report, and the answer to the test question appears to be “Yes” from the Institute for Supply Management (bolds are mine; most paragraph breaks added by me; note that December was revised upward):

(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in January for the 72nd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 53.5 percent in January, 2.3 percentage points lower than the seasonally adjusted December reading of 55.8 percent. This represents continued growth in the non-manufacturing sector at a slower rate.

The Non-Manufacturing Business Activity Index decreased to 53.9 percent, which is 5.6 percentage points lower than the seasonally adjusted December reading of 59.5 percent, reflecting growth for the 78th consecutive month at a slower rate. The New Orders Index registered 56.5 percent, 2.4 percentage points lower than the seasonally adjusted reading of 58.9 percent in December.

The Employment Index decreased 4.2 percentage points to 52.1 percent from the seasonally adjusted December reading of 56.3 percent and indicates growth for the 23rd consecutive month.

The Prices Index decreased 4.6 percentage points from the seasonally adjusted December reading of 51 percent to 46.4 percent, indicating prices decreased in January for the third time in the last five months.

According to the NMI®, 10 non-manufacturing industries reported growth in January. The majority of the respondents’ comments are positive about business conditions; however, there is a concern that exists relative to global conditions, stock market volatility, and the effect on commercial and consumer confidence.

INDUSTRY PERFORMANCE

The 10 non-manufacturing industries reporting growth in January — listed in order — are: Finance & Insurance; Real Estate, Rental & Leasing; Utilities; Retail Trade; Information; Construction; Agriculture, Forestry, Fishing & Hunting; Health Care & Social Assistance; Management of Companies & Support Services; and Public Administration. The eight industries reporting contraction in January — listed in order — are: Mining; Educational Services; Wholesale Trade; Other Services; Arts, Entertainment & Recreation; Accommodation & Food Services; Transportation & Warehousing; and Professional, Scientific & Technical Services.

In terms of driving GDP, the steep Business Activity Drop is quite troubling. The New Orders drop is not as much of a problem, especially since the Backlog figure (not noted in narrative) went from a neutral 50.0 to 52.0.

The industry rundown for the past four months is as follows:

That trend is not our friend. Uless stopped, seems to presage a move into contraction in about three months.

The move into not seasonally adjusted contraction in New Orders will occur next month if another drop like January’s occurs.

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