Question to me on the FOOL about today's job numbers.
Wait a minute, someone please help me out here .....
Does this mean that since April 2003, 912,000 jobs have been added to the employment numbers based on an estimate????
My reply:
As best as I can determine:
Yes
What seems to have happened is this:
1) Last Dec and Jan figures were adjusted down for the year as jobs were not really created that were expected to be created. Somehow the model figured this out (on purpose or manipulated) very late in the year.
2) In March, with all the expiring benefits, a whole bunch of people ran out and took anything they could find (part time jobs at Walmart or wherever), creating a one time aboration of (+308,000)
3) This showed up in March stats when 296,000 people complained about working part time for economic reasons. To the model: A job is a job is a job. The models do not count people working two part time jobs instead of one full time job as one job but 2 jobs. No determination is made at all as to the quality of the job. 10 hours part time a week, is counted as a job.
4) In april we added more jobs (how many is unknown), but since April has been weak for 3 years running, the damn model (based on real headcounts +- some real crapola WAGs based on birth/death rates) assumes something REALLY BIG is happening and adds a lot more jobs to the total on statistical assumptions. Part of this is probably enhanced by overcounting returning strikers from a huge grocery strike in California.
5) Rather than using real headcounts and ONLY real headcounts, the model magically sees jobs were "created" at a time when the powers that be just happen to need to prove the economy is adding jobs at a healthy rate.
6) There is no doubt we created a whole bunch of part time jobs somewhere (probably some full time ones as well). How many is anyone's guess because today is the first day I was even aware of this extra manipulation. I am going to go out on a limb and suggest that since the rate of firing people has slowed down (I accept that), that some model somewhere suggests that huge numbers of jobs are being created. There is some REAL evidence of job pickups based on Monster numbers. However when 13,000+ jobs are being terminated at BOA, and 10,000 at a couple more places that I can not remember now, and with more people bitching about part time work to the entire tune of all 300,000 jobs that were supposedly created in March, something really smells here. That said, with all the over-expansion building of Lowes, HDs, McDonalds, Walmarts etc we probably did create a lot of low paying jobs somewhere. How many is nothing more than a guess since the model is allowed to make all kinds of assumptions. Finally much of it is probably desperation: People taking ANYTHING with benefits expiring.
7) There was a false start to job numbers last year, and when it became apararent that jobs were not really created, they took them all away in one fell swoop in Jan and February (and then some to be able to goose March and April for political reasons?).
8) Someone needed to show jobs, the model for showing jobs was modified this year, and low and behold jobs were found. Again, I am not doubting that some jobs were created, but I am suspicious of model changes right at a time when we need to show job creation.
9) All of which leads us to this thought from a well respected poster on SI:
Message 20106754
10) Finally but most important. Regardless of whether or not jobs were really created, the bond market is acting as if they were. As much as you or I or anyone else is "right" about these numbers being a crock of horse hockey, the bond market accepted them.
Mish |
