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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: siempre who wrote (4078)	4/10/2004 6:30:24 PM
From: mishedlo	Respond to of 116555

BTW - I am one of the several others John referred to in his latest. Lacy Hunt of Van Hoisington Management tells us what the "wrongness" is (as did several others on Monday, after digging through the data over the weekend. Of the 308,000 jobs created, 296,000 are temporary or part-time jobs! "In March, the number of persons who worked part time for economic reasons increased to 4.7 million, about the same level as in January. These individuals indicated that they would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs." ========================================================= Here was a folloup I sent John and this post is here somewhere on this board as well. I was THE first to report on this nonsense. Yet Another Look At Jobs I was questioned about looking at household numbers by a number of people. Actually I was looking at both household numbers and establishment numbers for comparison purposes. People questioned the validity of that but I do not think they should be that far off, one gaining 308,000 job and the other losing 308,000 jobs. Here was my reply to one thread on this subject: Peter I know some of the tables I was looking at were household numbers. I also referenced table B1 - establishment data. Don't you find it strange that household numbers decline by 308,000 the same time the "real" numbers were supposed to rise by 308,000? I find that rather hard to believe. In the household numbers there was a HUGE% increase of people wanting to work full time but are now only working part time. Unfortunately the "real" establishment data makes no distinction between part time and full time and would also double count people working 2 part time jobs but the household survey would not. I will propose one or more of the following: The bulk of the jobs "created" were part time low paying jobs. This was boosted by return of strikers in California and govt hiring. Since the "real" as opposed to household numbers will double count (a person has two part time jobs instead of one full time job or a person is not making enough on his full time job so he has to take a part time job in addition), I suspect we are seeing a lot of that. Lets' look at the QUALITY And SUSTAINABILITY of some of those jobs that were "created" bls.gov From the establishment data: Retail +47,100 Accommodations and food services +27,100 Government +31,000 Health care and social assistance +35,500 Credit intermediation and related activities +10,500 Now, how many of those retail jobs were part time? How many are likely to be high paying? How many of those food services jobs are likley to be either paert time? How many are likely to be high paying? The govt jobs could be high paying but I sure hope we are not adding 31,000 govt jobs a month. This appears to be unsustainable. Credit intermediation. This one sure is believable. Credit problems are soaring at a fast pace based on rising bankruptcies. I doubt if soaring jobs here is really a good thing. Health care and social assistance. I can believe we need jobs there and if they are nurses then the jobs might be high paying. If they are cleaning ladies removing bed pans then probably not. For the sake of argument I will call all of these high paying nursing jobs. But, is this sustainable or is it a one time short. Demographics would suggest more jobs needed but certainly not a booming amt every month. I would suspect growth in spurts or slower hiring over time, not these high numbers every month. So what do we have? 10,500 jobs that are a bad sign (credit problems) 74,200 retail/food svcs jobs probably substantially part time and almost assuredly low paying. 31,000 govt jobs that should not be sustainable at all. There is a lot to NOT like in this report and a lot to NOT believe either. One or the other of household numbers or "preliminary real" numbers are way off IMO. Also note that in the establishment data that +100,700 unadjusted somehow translates to +308,000 ajdusted. I do not buy that. Finally I refer to this figure from the Household figures: 4,437 4,733 This is the month to month increase of people bitching about working part time as opposed to full time from table A-5 on page 10. 296,000 more people (this month vs last month) are complaining about part time vs full time jobs is how I read that line. That is also close to the number of jobs we supposedly gained. The logical conslusions IMO are: 1) disbelief in the numbers of jobs created 2) disbelief in the sustainability of the numbers even if they are real 3) disbelief in the "quality" of the jobs being created 4) strong belief that many of the jobs being created are part time jobs 5) a huge jump in credit intermediation jobs is probably not a good thing. Summary: This jobs report is very suspect on a number of fronts and is without a doubt nowhere near as strong as the raw numbers indicate, even IF they are accurate. Mish