The February Employment Situation Report (030510)
Where things stand:
Here’s how the not seasonally adjusted (NSA) and seasonally adjusted (SA) jobs added/lost numbers for the past six years look just ahead of the release:
As I’ve said in previous posts, to get an idea of whether or not things are really getting better, the official SA numbers aren’t as useful as digging into the NSAs (i.e., what’s really happening on the ground). That’s especially true now because last year’s steep declines work to distort the SA calculation.
What’s important will be how February 2010’s NSA figures compare to the February 2004-2008 NSAs and whether that comparison comes in better than similar comparisons in previous months. You can see that January 2010’s preliminary NSA job loss of -2819 (subject to adjustment today and in March) was not much worse than 2004-2007 but was better than 2008. That was an improvement over December 2009’s NSA of +80, because December 2004-2007 were clearly better by an average of roughly 300,000.
A decent result would be for February’s NSA to come in at about +700,000.
The run-up:
- ADP’s private sector report came in at a seasonally adjusted -20,000 for February, and its original January figure of -22,000 was revised downward to -60,000.
- The prediction at this link is for a seasonally adjusted job loss of 50,000.
- This AP report says that “The consensus in the markets is that the unemployment rate will rise to 9.8 percent in February from 9.7 percent and that non-farm payrolls will have fallen by 50,000, partly because of the heavy snow on the East Coast.”
- I pointed out on Tuesday (3rd item at link) that the report may come in better than predicted, because federal receipts from withheld income and employment taxes in February were only 2.3% below February 2009.
The report will be here at 8:30 a.m.
THE ANNOUNCEMENT: Here it is –
Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while temporary help services added jobs. Severe winter weather in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures.
UPDATE: What follows perfectly illustrates why the NSA numbers are more important.
Here is the post-release table, including February plus revised January and December:
The red-boxed 473,000 jobs added in February was a really poor result. It trailed the 2004-2008 average of 714,000 by about 240,000. January’s actual result was only 72,000 worse than the 2004-2008 average. That’s 168,000-job swing in the wrong direction.
Even though February 2010’s +473,000 is less than February 2008’s +516,000, the seasonally adjusted job loss for February of -36,000 — the one number the press and everyone else will singularly focus on — is less than 2008’s -50,000. Why? Because the 2009 disaster is mucking up the seasonal adjustment calculations, making the +473K look better than +516K, when it obviously isn’t.
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UPDATE 2: A question for the pinheads at the National Bureau of Economic Research (NBER) – If, according to you guys, we were in a recession in February 2008 (an assertion I have disagreed with since NBER made the call that it began in December 2007), when the economy added a lackluster (by traditional February standards) 516,000 jobs, what do you call it when February 2010 sees 43,000 fewer jobs added?
[...] BizzyBlogI pointed out on Tuesday (3rd item at link) that the report may come in better than predicted, because federal receipts from withheld income and employment taxes in February were… [...]
Pingback by February Jobs Report - Nardu — March 5, 2010 @ 11:16 am
[...] Tom Blumer took a look beyond the “seasonally-adjusted” job loss of 36,000 in February, and it just doesn’t add up: The red-boxed 473,000 (non-seasonally-adjusted) jobs added in February was a really poor result. It trailed the 2004-2008 average of 714,000 by about 240,000. January’s actual result was an improvement of 72,000 over the 2004-2008 average. That’s a 312,000-job swing in the wrong direction. [...]
Pingback by No Runny Eggs » Blog Archive » Jobs seasoning — March 5, 2010 @ 12:26 pm
Even when one breaks it into percentages, the news is not good. The rate of change between 1/2008 and 2/2008 was +0.380% on an unadjusted basis, and the same between 1/2010 and 2/2010 slipped to +0.371%. However, when one applies the seasoning, that rate of change “improved” from -0.0362% between 1/2008-2/2008 to -0.0278% between 1/2010-2/2010.
We have to go back to 2003 for this level of disappointment, and the business climate forecast was looking a lot better then.
Comment by steveegg — March 5, 2010 @ 12:26 pm
Personally, I find this one of more reality by actually counting those who fell off the unemployment roles by mere definition of being out of work more than a year, the U6:
http://www.bls.gov/news.release/empsit.t15.htm
In regular times the U5 would be the better gauge of labor utilization but, given the massive increase in part time jobs, the U6 is more appropriate. Until we see a significant drop in the U6 (NSA), due to part time jobs converted to full time positions, the recovery has not started, end of story. The NBER made their bed now they have to lie in it.
Comment by dscott — March 5, 2010 @ 7:03 pm
Interestly, those who work more than one job, some context from 1970 to 2002 (NSA): http://www.bls.gov/cps/wlf-tables31.pdf
Currently (NSA): http://www.bls.gov/web/cpseea39.pdf
It hasn’t changed all that much since 1989.
Comment by dscott — March 5, 2010 @ 7:25 pm
1970 to 2005 for a couple more years: http://www.bls.gov/cps/wlf-table34-2006.pdf
Comment by dscott — March 5, 2010 @ 7:28 pm
This is far more evident in the weekly jobless claims, but the seasonal adjustment just doesn’t work after the economy has been in downturn for a long time. The trend you can see in the jobless benefits is that when it expects a large NSA number you get a small SA number, and vice versa. The fluctuations that everyone is cheering or decrying are merely a result of the magnitude of correction.
For these monthly job numbers, it is not as evident. But what you can see is the larger the “normal” job loss, the better the month will look. The smaller the “normal” job loss (or if it is a normal job gain month), the worse the month will look. This is a result of businesses not hiring as much as normal (or doing it via temps) and therefore they don’t need to fire as many people on the down months.
Also, don’t forget that the last two months (and a few months to come) are going to be skewed due to the Census (which won’t require an adjustment by the DoL.)
Comment by Scott — March 7, 2010 @ 8:12 am
#7, which is why the U6 is a better gauge of employment, the part timers used by the Census are counted as “UNemployed”.
Comment by dscott — March 8, 2010 @ 12:21 am