October 6, 2010

Econ Update: Tuesday’s ISM NMI Up, Wednesday’s ADP Private Jobs Report Down (An October Surprise Coming Friday?)

Filed under: Economy,Taxes & Government — Tom @ 1:21 pm

ObamaFunnyMoneySo who do you believe, ISM or ADP? Or will it be Uncle Sam on Friday?

On Tuesday, the Institute for Supply Management released its Non Manufacturing Index (NMI), which showed that the 80% or so of the economy that isn’t involved in manufacturing was expanding at a faster pace during September (with a reading of 53.4) than it was in August (at 51.5). Any reading over 50 indicates expansion. This was good news.

The big change in the underlying NMI data was in new export orders, which went from contracting (46.5) to hugely expanding (58.0). If there’s a reason for the suddenness of the change (a reason justifying a gradual move would be the weakening dollar making our exports more attractive), I don’t know what it is. The employment component of NMI went into bare expansion (50.2) from contraction (48.2) a month earlier.

This morning, payroll and benefits giant ADP, in its monthly employment report, threw ice cold water on the hopes of those who think that we might finally have found the bottom of the private employment market (bolds are mine; paragraph breaks added by me):

Private-sector employment decreased by 39,000 from August to September on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from July to August was revised up from the previously reported decline of 10,000 to an increase of 10,000.

The decline in private employment in September confirms a pause in the economic recovery already evident in other data. A deceleration of employment occurred in all the major sectors shown in The ADP Report and for all sizes of payroll.

The September decline in employment followed seven monthly increases from February through August. However, over those seven months, the average monthly gain in employment was 34,000.

There simply is no momentum in employment.

O-U-C-H.

Even the prior month upward revision is in a sense bad news, because that means the downward swing from last month was 49,000 (from +10 to -39). (Update: Speaking of swings, ADP’s result was 63,000 below expectations (-39 vs. +24 expected.)

In his report on the markets’ reaction to the ADP news, Associated Press reporter Stephen Bernard did a good job of looking back at ADP’s data and comparing it to the government’s reported private-sector employment results. Bernard also noted as a fact (because it is) what many of us have been saying for months (i.e., “It’s the Uncertainty, Stupid“), which also happens to be what I’ve been saying since I identified the beginning of the POR (Pelosi-Obama-Reid) Economy in July 2008:

The ADP report usually below comes in below the government’s measure of total private payrolls. So far this year, the average difference has been about 75,000. That means Friday’s report could show a net increase in private hiring. But the ADP figure does suggest that current forecasts for a gain of about 75,000 private sector jobs could be too high.

Uncertainty about costs from health care and financial regulatory reform as well as potential changes to taxes have been major reasons companies have shied away from adding new jobs.

A major factor missing in Bernard’s list is energy.

The monthly 75,000-job difference Bernard cited amounts to 900,000 jobs in a year. That’s more than a rounding error; it’s a “something’s gotta give” situation.

Last year, what gave was the government’s data:

  • In its regular October 2009 employment report, Uncle Sam’s Bureau of Labor Statistics preliminarily estimated that it had overstated the total number of jobs in its Establishment Survey by 824,000 jobs (855,000 in the private sector).
  • After finalization in March, the result was -902,000 jobs (-933,000 in the private sector).

I have confirmed in a phone conversation with BLS that it will release the preliminary estimate of its March 2011 comprehensive adjustment in the September Employment Situation Report on Friday, October 8. Given the ADP vs. Uncle Sam divergence (which goes back much further than a year) and the fact the BLS’s shaky Birth/Death model added 336,000 not seasonally adjusted untrackable, but “we somehow know they’re out there” jobs during the period from April 2009 through March 2010, we may see an “October surprise” that the administration and Democratic incumbents up for reelection will really, really not appreciate.

Stay tuned.

AP is ‘Absolutely Protecting’ MA-06 Dem Incumbent John Tierney Against GOP Challenger Bill Hudak

MA06CongDistrict2010UPDATE: A 12:16 p.m. AP report gets to details the initial report (not labeled “breaking”) should have contained.

In an unbylined Associated Press story about the wife of incumbent Democratic Massachusetts Congressman John Tierney pleading guilty in a federal tax case, the wire service fails to mention which district Tierney represents. Far worse, it only reports that Tierney “is facing a Republican challenger in next month’s election,” and doesn’t even name him.

Gosh, we wouldn’t want actual voters to react to the news that a Democratic Congressman’s wife helped her brother evade taxes on millions of dollars of income by possibly identifying Tierney as their congressman, identifying his opponent, and actually voting for that opponent, now would we? No, that just wouldn’t be right. It would seem that “AP” stands for “Absolute Protection” — of Democratic incumbents.

For the record, Republican Bill Hudak is challenging Tierney in the Bay State’s Sixth District (map at right).

Here’s a graphic capture of the AP’s Democrat incumbent-protecting four-paragraph report:

APonMAdemRepTierneysWife100610

Of course, we’re supposed to believe (because apparently no one is asking about it) that Tierney, like Sgt. Schultz in the 1965-1971 TV series “Hogan’s Heroes,” knew nothing — nothing!! — about his wife’s illegal activities.

Tierney is apparently avoiding Hudak:

“It’s either intentionally untrue, or Congressman John Tierney is as out of touch with his campaign staff as he is with his constituents,” commented Bill Hudak, candidate for U.S. Congress in the Massachusetts 6th Congressional District, when learning of the Congressman’s press release yesterday claiming Hudak is stalling on scheduling debates. “A simple call to any of the 13 frustrated debate hosts we have lined up would make crystal clear that it’s Mr. Tierney who is engaging in delay tactics and now refusing to debate,” Hudak challenged.

There’s also this from Hudak’s blog:

“The issues facing our nation and this district are enormous, and as candidates for Congress we are obligated to present our positions and solutions to the voters,” stated Hudak. “In Congressman Tierney’s case, the voters expect him to explain his recent votes on major legislation such as the Health Insurance Reform Law, the $800 billion stimulus bill, his support for budgets deficits of $3 trillion over 2 years adding to our national debt, his vote against funding our troops in Afghanistan and his withdrawal of support for the state of Israel.”

Here’s a quick race analysis from Real Clear Politics, which is carrying no polls on the race:

Tierney will face off against attorney Bill Hudak in the fall. Hudak seems to have surprised Tierney, raising $490,000 to Tierney’s $560, as of the end of the second quarter. Tierney still has a large cash-on-hand advantage, but this could be a sign that Tierney risks being caught sleeping.

This analysis at Sama Blog indicates that in the 6th District, Scott Brown won 57% of the vote against Martha Coakley in January’s special U.S. Senate race for what Democrats used to call “Ted Kennedy’s seat,” and by a margin of almost 40,000 votes. Brown took four other districts by margins of 55% or higher.

No wonder the Associated Press didn’t name Hudak. Readers might start thinking that there might be a wholesale rejection of Democrats in the works in Massachusetts, of all places. We can’t have that.

Cross-posted at NewsBusters.org.

Lickety-Split Links (100610, Morning)

Filed under: Lucid Links — Tom @ 8:26 am

From the “Don’t Get Cocky” Dept. — Rasmussen’s odd headline is that “For Second Straight Month, Number of Democrats in U.S. Falls to Record Low.” I say “odd” because while Dem ID dropped almost a half-point to 34.6%, which is indeed a record low, Republican ID dropped by even more (0.7%) to 33.1%.

What’s going on is disgust with both parties, and one has to be willfully blind not to see it. Whereas the parties might have blown it off in the past and described the unaffiliated as dropouts who won’t even bother voting, the onset of the Tea Party movement instead means that this time around it’s more likely that the outspoken activist ranks are growing.

______________________________________________

Related: The best-kept secret in America is that Tom Tancredo, engaging in a third-party run for Colorado governor, is outpolling the Republican candidate by a factor of two, and is quickly gaining on the Democrat.

Michelle Malkin has endorsed Tancredo. Other prominent conservative politicians and pundits need to step up and get behind him and prove that principle really is more important than party.

______________________________________________

Also related, from the “Who Does She Think She Is?” Dept.:

U.S. Sen. Lisa Murkowski’s campaign is warning Alaska broadcasters not to air ads by a national tea party group that the campaign says are “littered with lies and intentional mischaracterizations” about her and her write-in campaign.

When did Ms. Murkowski get named of the political ad police?

I hope the RINO-Republican senators who allowed Murkowski to keep her post as the ranking member of the Senate Energy and Natural Resources Committee even after she declared her write-in candidacy are proud of themselves.

This vindicates JIm DeMint , who caught flak for going public with the fact that the GOP caucus’s vote on the matter was NOT unanimous. He only did so after the GOP went public and said that it was.

I would called Murkowski the poster child for why disgust with the establishment GOP is on the rise — but that would be an insult to children.

______________________________________________

As long as this statement is true …

Campaign officials said (Ohio 13th District GOP Congressional candidate Tom) Ganley wasn’t even at the dealership at the time of the alleged assault.

… the charges reported in this Cleveland Plain Dealer story will have no credibility.

______________________________________________

From Bloomberg“Illinois Pays More Than Mexico as Cash-Strapped States Sell Bonds Overseas.”

Anyone who thinks that the U.S. Treasury can continue selling bonds at no-risk rates if trillion-dollar annual budget deficits under the former Senator from Illinois continue is delusional.

Positivity: Over two million participants possible for 2011 World Youth Day

Filed under: Positivity — Tom @ 7:12 am

From the Vatican:

Oct 5, 2010 / 04:19 pm

Preparations are being made with the possibility that more than two million young people might be in Madrid for World Youth Day next August. The week-long event will be divided between time for prayer and festivities.

During a press conference to present World Youth Day (WYD) 2011 at the Holy See’s Press Office on Tuesday, Auxiliary Bishop of Madrid Cesar Franco Martinez provided statistics compiled by organizers to prepare for logistical matters during the celebration.

While it is still too early to tell how many people will be in attendance for the event, which will take place from Aug. 15-21, 2011, Bishop Franco said in his written remarks that “WYD 2011 promises to be one of the most numerous among those held in Europe.” By way of comparison, the 2005 celebration of WYD in Cologne, Germany brought in 1.7 million people, while WYD 2000 in Rome saw 2.1 million attendees.

The average numbers for delegations from countries that have provided preliminary figures to WYD 2011 organizers, Bishop Franco wrote, are now 15 percent more than at these previous encounters.

Go here for the rest of the story.