September 2, 2011

The August Employment Situation Report (090211); ØMG! NO Seasonally Adjusted Jobs Added, Unemployment at 9.1% (UPDATE: Kept From Negative By Birth/Death at +87K)

Filed under: Economy,Taxes & Government — Tom @ 7:42 am

As a public service, here’s a quick pictorial summary for those who don’t have time to read the whole post:

TrainwreckEcon

Recent Econ Reports:

  • ADP’s Employment Report showed 91,000 seasonally adjusted jobs added.
  • ISM’s Manufacturing Index stayed in expansion, but with certain key elements (e.g., production) in contraction.
  • The Conference Board’s consumer confidence survey did a deep dive into the tank back to where it was over two years ago.
  • Initial weekly unemployment claims remain stubbornly above 400,000.
  • Vehicle sales were up 7.5% in August against a horrid year-ago figure. Detroit’s traditional Big Three and Nissan had a relatively good month. Toyota and Honda didn’t.

Earlier expectations: Just over a week ago, CNBC’s Jeff Cox had a story (“Fears Grow That August Will Show Net Loss in Jobs Picture”) on how “Some prominent economists think the (August jobs) report will show a modest decrease in jobs when the final tally is made …”

Specifics cited:

  • Paul Dales, chief U.S. economist at Capital Economics in Toronto, predicted 25,000 seasonally adjusted jobs lost.
  • Peter Cardillo, chief market economist at Rockwell Global Capital, forecasted 27,000 job gains.
  • Economist Jeffrey Greenberg at Nomura Global Economics went with 5,000 jobs lost, based on trends in unemployment claims. I don’t know if he gave special consideration to the Verizon strike’s influence on the numbers during two relatively recent weeks.
  • Kurt Karl, chief U.S. economist at Swiss Re in New York, had a more conventional prediction of +100,000.

Other more recent predictions:

  • On Wednesday, after ADP’s report on private-sector employment came in with 91,000 jobs added, Reuters carried a prediction of +75,000.
  • CNBC’s post-ADP consensus prediction was +80,000.
  • After yesterday’s unemployment claims report, Reuters and Bloomberg carried estimates of +75K and +70K, respectively.
  • (Via Zero Hedge) Goldman Sachs, in the wake of Thursday’s unemployment claims and ISM reports, reduced its estimate to +25K from +50K.
  • Gallup’s survey-calculated unemployment rate went from 8.8% to 9.1%. It predicts that “the August unemployment rate that the government will report Friday will be higher than the 9.1% it reported in July.”

The “Raw Numbers” (Not Seasonally Adjusted) Benchmarks

Here is the context of the past 10 years, both seasonally adjusted and not:

NSAandSAemp0501to0711

August is a month with positive but not huge on-the-ground job growth when the economy is going well. Regardless of where the seasonally adjusted results come in, I would suggest that for the economy to be truly recovering and on something resembling a decent growth path, August’s not seasonally adjusted job adds need to be at least 170,000 and 200,000 overall and in the private sector, respectively. The overall benchmark is lower because I expect the trend of state and local government job attrition to continue.

I’d love to be wrong, but I’m quite skeptical that we’ll see anything close to either figure.

The report will appear here at 8:30 a.m.

ObamaAsZero0811HERE IT IS, and thanks for nothin’ — literally (counting prior months, it’s less than nothing):

Nonfarm payroll employment was unchanged (0) in August, and the unemployment rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major industries changed little over the month. Health care continued to add jobs, and a decline in information employment reflected a strike. Government employment continued to trend down, despite the return of workers from a partial government shutdown in Minnesota.

Household Survey Data

The number of unemployed persons, at 14.0 million, was essentially unchanged in August, and the unemployment rate held at 9.1 percent. The rate has shown little change since April. …

Establishment Survey Data

Total nonfarm payroll employment, at 131.1 million, was unchanged (0) in August. Employment changed little in most major private-sector industries.

… The change in total nonfarm payroll employment for June was revised from +46,000 to +20,000, and the change for July was revised from +117,000 to +85,000.

This is a Hindenberg-level disaster. Per the Establishment Survey (seasonally adjusted), 58,000 fewer people (June’s -26K and July’s -32K) were estimated to be working in August than were working in July.

UPDATE, 9:00 a.m.: The raw (not seasonally adjusted) numbers were 118,000 for total nonfarm and 85,000 in the private sector. Here’s the chart above revised for today’s numbers:

SAandNSAjobs2001to0811

As would be expected based on the seasonally adjusted results, those are far short of the benchmarks noted above.

But to be fair to Team Obama, even though this doesn’t change the train-wreck evaluation (especially given Update 2, which I do not believe is offset by Update 3), if August’s NSA numbers had appeared in 2005 or 2006, the seasonally adjusted numbers would probably have come in positive to the tune of (very) roughly +60K in each case.

So they got a bad break. As can be seen above, they got a break in the opposite direction three months ago, when pretty bad raw numbers still led to positive May 2011 results which would likely have been negative if they had been posted in the mid-2000s. What goes around eventually comes around.

UPDATE 2, 10:30 a.m.: Birth/Death was +87K vs. 91K in August 2010. That seems wildly optimistic. Needless to say, any downward adjustment to Birth/Death takes this month’s overall seasonally adjusted number into negative territory.

UPDATE 3, 4:15 p.m.: The BLS noted that “Employment in the information industry declined by 48,000 in August. About 45,000 workers in the telecommunications industry were on strike and thus off company payrolls during the survey reference period.” Okay, but remember that this influences the NSA numbers before they’re converted to SA, and it’s not necessarily a one-to-one relationship. I think that the Birth/Death (which is also part of NSA) is so not reasonable that it outweighs the Verizon influence.

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8 Comments

  1. It gets even worse if one looks at the actual numbers rather than the monthly change. The first-look July numbers were 131,190,000 total non-farm and 109,156,000 private. Those got revised downward to 131,132,000 non-farm and 109,153,000 private.

    Speaking of revisions, the final June numbers were also revised downward from 131,073,000 non-farm and 109,002,000 private to 131,047,000 non-farm and 108,997,000 private.

    Comment by steveegg — September 2, 2011 @ 8:50 am

  2. The prior-period revs surprised me b/c last month’s were IIRC about the same in the opposite direction.

    Comment by TBlumer — September 2, 2011 @ 9:34 am

  3. Nonfarm payroll employment: Goose Egg(Literally)    
    Lots here for the “Chart” and “graph”-oholics!    ………Tax Policy.  Without repairing the employment rate, which cannot happen until we solve tax and trade policy, the government cannot collect tax revenue…………  
    http://market-ticker.org/akcs-www?post=193424

    Zero Jobs Growth, Unemployment Rate Flat at 9.1% Charts, Graphs, Details (..Oh My!)
    ……..Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force,
    it is hard to discuss the numbers. While the “official” unemployment rate is an unacceptable 9.1%, U-6 is much higher at 16.2%…………
    http://globaleconomicanalysis.blogspot.com/2011/09/zero-jobs-growth-unemployment-rate-flat.html

    Congress (Including Jean Schmidt too) and GWBush: the Real Gibson Guitar Culprits
    ……Gibson’s CEO says the government told him NOT to use American labor……..
    http://dad29.blogspot.com/2011/09/congress-and-gwbush-real-gibson-guitar.html

    Valerie Jarrett, Slumlord’s Grove Parc Gets Fed 30.5 Million Grant…
    http://backyardconservative.blogspot.com/2011/09/valerie-jarrett-slumlords-grove-parc.html

    Even Labor Leaders tell Obama stop killing jobs
    http://www.nationalreview.com/articles/275974/labor-leaders-tell-obama-stop-killing-jobs-deroy-murdock

    When You Penetrate John Sheehan’s Veil of Secrecy, You Find a Pizza Cheese Quality Control Guy Running FDA’s War on Raw Milk–And Turning All Disclosure into Struggle
    http://www.thecompletepatient.com/journal/2011/9/1/when-you-penetrate-john-sheehans-veil-of-secrecy-you-find-a.html

    Defrocked Episcopal priest hopes to join Catholic Church    ……Lets hope we can welcome him home…….
    http://www.patheos.com/community/deaconsbench/2011/09/02/defrocked-episcopal-priest-hopes-to-join-catholic-church/

    12 men enter formation this fall for the Archdiocese of Cincinnati   Please pray for them. 
    http://fatherschnippel.blogspot.com/2011/09/data-dump.html

    13 men enter formation this fall at St. Gertrude Priory in Madeira for the Dominicans 2011 Noviate class. Please pray for them. 
    http://orderofpreachersvocations.blogspot.com/p/new-novices.html

    Indiana School Vouchers Please Parents, Infuriates Teachers    
    http://www.openmarket.org/2011/08/31/indiana-school-vouchers-please-parents-infuriate-teachers/

    Is Peoples Republic of China Cost Really Cheaper?   Not with brand new, newly designed products…….
    http://dad29.blogspot.com/2011/09/is-prchina-cost-really-cheaper.html

    Govt working hard to kill proposed Canada-to-Texas pipeline which will bring Jobs and petroleum to resources to the US
    http://dad29.blogspot.com/2011/09/dc-mind-part-197445.html

    Governor Nikki Haley: To Be Silent Is Not Leadership  “I will be the poster child for right to work states,”
    http://www.humanevents.com/article.php?id=45905

    Think that Public Pension Is Golden?  Central Falls RI filed for bankruptcy Aug. 1……
    http://dad29.blogspot.com/2011/09/think-that-public-pension-is-golden.html

    http://farmtoconsumer.org/litigation-FDA-status.htm

    UH Oh, A PORK ALERT!!!  finally the “Real” Chris Christie shows his hand!!
    “Chris Christie to Congress: Forget the spending cuts for a minute and pass that disaster aid money NOW! ”
    http://hotair.com/archives/2011/09/01/chris-christie-to-congress-forget-the-spending-cuts-for-a-minute-and-pass-that-disaster-aid-money-now/

    Take O’losers Approval Rating, Add Election Data, and…You get THIS map. ( No, it’s not a forecast……Yet….Oh pray harder!  In the name of the…..)
    http://ace.mu.nu/archives/320857.php

    MILLER: Alaska’s regulatory stranglehold
    Bureaucrats stymie economic development in the Last Frontier
    http://www.washingtontimes.com/news/2011/aug/31/alaskas-regulatory-stranglehold/

    The Case Against Shifting Production To China; Hidden Costs And Growing Risks Make U.S. Attractive For Manufacturing
    http://www.manufacturingnews.com/news/11/0831/reshoring.html

    Comment by Greg — September 2, 2011 @ 12:22 pm

  4. Tom, get a load of this crap
    You know Jimmy Carter had his drunk brother Billy, but Dear Leader has Uncle Omar and oh my, what a mess. It is much worse on Uncle Omar than it was for “Billy”.

    As a person who was hit by a Drunk Driveras a youth, this guy has got to be deported. We do not need to pay to incarcerate this criminal.

    http://michellemalkin.com/2011/09/02/90138/

    Comment by Greg — September 2, 2011 @ 1:48 pm

  5. Tangentially to the lack luster job creation with the “government in charge of the economy” a certain group without jobs is getting EIC payments to the tune of $4.2 billion a year…

    http://taxprof.typepad.com/taxprof_blog/2011/09/tigta.html

    Hat tip Instapundit. It’s bad enough that we shell out billions in unemployment payments, have to borrow money to keep them afloat but now Obama in his infinite incompetence is borrowing money to keep the illegals here by bribing them using the IRS of all agencies!!!! So not only did Obama stop the deportations, he doubled down to support them to stay on OUR dime. Do we really have to wait to Nov 2012 to get rid of this nimcompoop? Maybe on the bright side the illegals are now accepting government hand outs that Americans won’t take?

    Comment by dscott — September 2, 2011 @ 4:02 pm

  6. [...] payrolls. However, this number was already factored into analyst estimates.” And, as noted at this morning’s post in an afternoon update, it doesn’t offset the Birth/Death Model’s assumption that [...]

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  7. [...] the quick version, pictorially.The informative, extended version is here.Source: US Middle East BlogsPublished: 2 September 2011Site: mypetjawa.mu.nuSource by Date: US [...]

    Pingback by August 2011 Update – U.S. Economy «ScrollPost.com — September 2, 2011 @ 7:20 pm

  8. [...] evening, in the wake of the government’s “ØMG” employment report, Investors Business Daily articulated the obvious — something the clowns in the press, who [...]

    Pingback by BizzyBlog — September 3, 2011 @ 8:13 am

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