May 4, 2012

April’s Jobs Report: The Raw Numbers Are OMG Awful

Filed under: Economy,Taxes & Government — Tom @ 9:40 am

Today’s jobs report perfectly illustrates why anyone trying to get their arms around reality needs to look at not seasonally adjusted or NSA data before opining on the meaning of the seasonally adjusted (SA) data.

I’m working up comments currently, but until then, anyone looking at the NSA and SA numbers compare will get the main point, which is that today’s job-market results were far worse than the SA numbers alone would lead you to believe:

SAandNSAjobs0412

More shortly. In the meantime, note that the Birth/Death model estimate of net new jobs created which BLS somehow “knows” are out there but can’t yet find was 206,000. Last year it was 172,000. That’s 23% of all NSA net new jobs. In light of the malaise we’ve seen in the POR (Pelosi-Obama-Reid) Economy for going on four years — Surely they jest.

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UPDATE: Points –

  • The number of NSA total jobs actually added in April of 896K (which already has a Birth/Death figure which seems artificially high), which is 283,000 lower than last year (1,179K minus 896K), somehow led to a seasonally adjusted figure which is only 136,000 lower.
  • The number of private-sector jobs added in April of 896K, which is 257,000 lower than last year (1,153K minus 896K), somehow led to a seasonally adjusted figure which is only 134,000 lower.
  • Both numbers also badly trail April 2010.

I’m NOT saying that BLS is cooking the SA calculations (though I have a real problem with the tone of teh verbiage in its report today; it has a distinct aroma of supervisory influence). I AM saying that if you take them as the last word, you’re going to come away believing that April was a pretty bad month in the job market. The truth is that it stunk to high heaven, and that SA numbers close to zero would have more closely reflected April’s reality.

Despite millions of people looking for work and (if you believe the media hype) the right conditions for slow, steady growth, the economy added far fewer jobs than in either of the best two years (2004 and 2005) during the previous decade, and far fewer than the universally acknowledged mediocre performances (compared to what is needed to really get the economy going) of the previous two years.

As I see it, the economy came up 400,000 jobs short of the 1.3 million I contended in my post earlier this morning would be needed to demonstrate genuine improvement.

The April Employment Situation Report (050412): More Malaise; Seasonally Adjusted Figures Misleadingly High

Filed under: Economy,Taxes & Government — Tom @ 8:27 am

OVERVIEW: Unemployment Rate Drops to 8.1% With Historically Low Workforce Participation; 115K SA Jobs Added; Feb. and March Revised Up a Combined 53K

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Econ catch-up:

Predictions:

  • Earlier in the week, the Associated Press carried a prediction of 173,000 seasonally adjusted jobs.
  • Last night, Bloomberg had a consensus prediction of 160,000.
  • From a list compiled at Zero Hedge — Barclays Capital, +150K; Deutsche Bank, +175K; Goldman Sachs, +125K; JP Morgan, +145K; UBS, +170K; Morgan Stanley, +130K; HSBC, +170K; Bank of America, +155K.

Raw Numbers Needed:

  • The private sector needs to add at least 1.3 million jobs on the ground to have the kind of breakaway month the economy really needs (in 2011 and 2010, the numbers were 1.153 million and 1.05 million, respectively).
  • Time is tight, but I believe the overall number needs to be only slightly less than that.

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

8:32 a.m.: The site isn’t loading. Drudge reports an unemployment rate drop to 8.1%.

HERE IT IS: In two words — more malaise. Here we go (with what I see as some Hilda Solis-inspired spin) –

Nonfarm payroll employment rose by 115,000 in April, and the unemployment rate was little changed at 8.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, retail trade, and health care, but declined in transportation and warehousing.

Household Survey Data

Both the number of unemployed persons (12.5 million) and the unemployment rate (8.1 percent) changed little in April.

… The civilian labor force participation rate declined in April to 63.6 percent, while the employment-population ratio, at 58.4 percent, changed little.

… Establishment Survey Data

Total nonfarm payroll employment rose by 115,000 in April. This increase followed a gain of 154,000 in March and gains averaging 252,000 per month for December to February. In April, employment rose in professional and business services, retail trade, and health care. Transportation and warehousing lost jobs over the month.

… The change in total nonfarm payroll employment for February was revised from +240,000 to +259,000, and the change for March was revised from +120,000 to +154,000.

The revisions to the previous months bring the number of Americans estimated to be working to a level that is 168,000 higher (115K in April plus 34K and 19K in revisions to March and February, respectively) than where we were a month ago.

The unemployment rate drop in conjunction with the labor force participation drop merely means that the dropout problem is getting worse. The 115K in April job additions is very unimpressive.

A closer look will follow shortly.

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UPDATE: Yes, I believe the report’s text is spun. It doesn’t even give us the total number of private-sector adds, which Zero Hedge says is 130,000. ZH also notes that the Household Survey shows that another 522,000 more Americans were not in the labor force in April, and the the labor force participation rate is at its lowest level since 1981.

As capsulized earlier: More malaise.

UPDATE 2: The seasonal adjustments mask much larger drops in the raw numbers — Go to this morning’s later post for follow-up.

Economic News Embargoes Should Apply to All

Filed under: Economy,Taxes & Government — Tom @ 8:00 am

In the Internet Age, the establishment press news spinners shouldn’t need – and don’t deserve — early access.

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This column went up at PJ Media and was teased here at BizzyBlog on Wednesday.

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Several federal government agencies publish important weekly and monthly reports on economic growth, employment, retail sales, specific industry sectors, and (lest we forget) Uncle Sam’s awful and getting worse fiscal situation. This information moves markets and often immediately affects the political climate in Washington and elsewhere.

The agencies involved typically place embargoes on these reports. All along, and I must confess quite naively, I thought that having an “embargo” meant that absolutely no one outside of the agency preparing the report was allowed to see the related information until its official release. I have since learned otherwise.

I experienced a jarring incident showing just how seriously the government takes its embargoes on the non-privileged about a dozen years ago. While catching up on email during lunch, I innocently sent a message to the Bureau of Labor Statistics asking why a report embargoed until 8:30 a.m. had an email time stamp about 55 minutes earlier. In short order, I received a phone call from someone working in security at the Department of Labor (DOL). It turned out that there was no embargo violation; as I recall, the time stamp problem had to do with my email program’s non-recognition of the beginning of Daylight Saving Time the previous weekend. The point is that Uncle Sam clearly and quite justifiably doesn’t want anyone in a position to take advantage of key market-moving and politically sensitive information to see it before anyone else.

So perhaps I was among the few who were surprised to learn earlier this month, as a result of an April 10 policy change at DOL, that many legacy news organizations have had the privilege of accessing otherwise embargoed information ahead of time for decades longer than they’ve needed it — or deserved it.

Before the Internet and fax machines, these pre-embargo “lockups” made sense. Market participants needed to have an idea of what was in reports they couldn’t see for themselves. Typing up or otherwise relaying coherent dispatches for wide dissemination in time for the opening bell, which rang at 10 a.m. at the New York Stock Exchange until 1985, was no easy task. Giving the press a 30-60 minute head start to deal with releases which mostly go live at 8:30 a.m. or later was a practical, necessary and reasonable accommodation.

Additionally, the business press at the time, unlike most of its media counterparts, tended to play its reporting relatively straight, concentrating on just the facts (imagine that). As I explained in a column written over a decade ago (minor edits have been made to the original), that started to change in the late 1970s. Until then:

… [W]e could count on their business reporters (who I will call the “Bizzies”) to accurately report what was really going on in the economy, even if the news wasn’t good or didn’t fit the liberal template.

That changed with the election of Ronald Reagan.

… A critical part of the Reaganites’ pre-inauguration tax-cut campaign was an emphatic belief that the economy was in deep trouble, and that it was getting worse. They were even whispering that we might be on the verge of the “C-word” (Crisis) to describe economic conditions.

… [T]he Newsies, with the help of some outgoing Carter Administration officials. … ridiculed the verge-of-crisis talk and called it irresponsible, even as the prime rate rose to 21.5%! Some Newsies even complained that such talk in and of itself could cause the economy to get worse (sounds familiar, doesn’t it?).

The Newsies, who had never really concerned themselves with what the Bizzies were saying and doing, expected backup from them on this important political issue. But to the Newsies’ horror, the Bizzies by and large agreed with the Reagan team! While the economy-saving Reagan tax cuts eventually passed for a number of reasons, the lack of sustained opposition from the business press was certainly a factor working in its favor.

The Newsies’ response to having been “betrayed” by their own Bizzies was to assign liberal reporters and columnists to the business beat. … [B]usiness journalism went downhill during rest of the 1980s because of the politicization that occurred. Newsies became politically-driven Bizzies. Bizzies who didn’t go along went elsewhere.

The changes were profound. By the summer of 1985, The Washington Post, with a straight face and the backing of their Bizzies, told us that the economy was in the middle of a “slump.”

Following 1983 and 1984, when the nation’s gross domestic product grew by 4.5% and 7.2%, respectively, growth in 1985 was 4.1%. We could use a “slump” like that right about now.

The decline of business journalism has almost never stopped. Now it’s to the point where most of the press, in the interest of propping up Dear Leader, spent this year’s entire first quarter regaling us about our supposedly strengthening economic recovery. Horse manure; we have just learned that 2012 growth is expected to come in at perhaps half of that seen in 1985.

Pre-embargo establishment press access should have ended years ago.

It’s no longer necessary. Market participants and the non-elites now have immediate access to information upon its release, and usually have plenty of time to process its essence before the 9:30 a.m. opening bell. (If I were in charge, I’d move the embargo times for a few of the key reports back by 30 minutes to allow for more complete digestion.)

Far more important, the Associated Press (aka the Administration’s Press), the other wire services, the major newspapers, and the rest of the select outfits which currently have pre-embargo access shouldn’t have it. They should have to compete for news consumers’ attention and eyeballs on the same terms as everyone else in New and Old Media. If they’re really as great as they say they are in analyzing and interpreting information, they shouldn’t need the head start. But they’re not, and the less deluded among them know it. All too often they are exclusively narrative framers.

After using their pre-embargo windows to get an (often incomplete) grasp of the reports involved, their next enterprise almost inevitably seems to be to figure out how they’ll spin it. To name just two recent AP examples seen during the course of a separate individual business days, a declining March consumer confidence report devolved from “falls” to “rosy,” and bad news about April housing starts was flushed down the memory hole while good news about building permits got the full-trumpet treatment.

I contend that this kind of “reporting” would have a tough time surviving if it operated from the same starting line as everyone else. One or both of two things would then happen:

  • New Media business and economic commentators would soon become the dominant go-to places for people who want accurate and objective information accompanied by insightful analysis.
  • In response, the establishment press would start putting genuinely knowledgeable Bizzies on the business beat, or risk irrelevance.

It’s long past time we find out.

Friday Off-Topic (Moderated) Open Thread (050412)

Filed under: Lucid Links — Tom @ 7:15 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.

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Positivity: At 70 years-old, grandmother is now cloistered nun in Spain

Filed under: Positivity — Tom @ 7:00 am

From Valencia, Spain:

May 3, 2012 / 04:05 pm

A 70-year-old widow, who is a mother of three and grandmother of five, made her solemn vows as a Poor Clare contemplative nun in the town of Canals in Spain.

Sister Celia de Jesus, as she is now known, made her perpetual vows at the Convent of St. Clare, where she volunteered with her husband until he passed away in 2004. According the AVAN news agency, she has been in formation with the order since then.

“Before entering the convent, Sister Celia de Jesus worked with Catholic Action of Valencia and cared for the sick. Once her husband died, she decided to completely devote herself to the Lord as a religious,” the news agency reported.

Her final profession was attended by her children and grandchildren and celebrated by Father Miguel Albinana. Twelve priests from surrounding parishes who visit the convent also concelebrated. …

Go here for the rest of the story.