Non Farm Payroll Preview
By Barry Ritholtz - December 2nd, 2011, 7:25AM
A lot of cross currents about today’s NFP
There is a small group of analysts that have been whispering about a negative number in NFP for November; That seems to be less likely since the (usually wrong) ADP report.
There is another group that has been talking up a blow out number, and while many in that camp have been singing the same song, the ADP is manna from heaven to them.
And lastly, as we showed yesterday (Withholding-Tax Collections Look Solid), W/H info looks pretty decent.
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Employment situation report released at 8:30am
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December 2nd, 2011 at 7:36 am
How can people still pay attention to the ADP report? I think most financial talking heads don’t believe the ADP figures are relevant, but they just need something to talk about to fill the air time.
December 2nd, 2011 at 7:48 am
Trying to accurately determine whether 135,000,000 or 135,100,000 people are employed is difficult enough but then you have to seasonally adjust and add in birth/death estimates and it becomes highly suseptable to error but everybody gives it significant investment relevance.
December 2nd, 2011 at 8:25 am
Futures are up (even though there is no rhyme or reason, let’s attribute it to expectation of good employment numbers — a.k.a: the patient/corpse twitched).
At this point, the economy is reminiscent of a modern Potemkin village.
December 2nd, 2011 at 8:27 am
dougc, you wrote:
It’s difficult indeed and there is statistical uncertainty. It’s not done in this order, though. It’s adding B/D and then seasonally adjust.
December 2nd, 2011 at 8:57 am
120K but the unemployment rate fell to 8.6 WTF?! Thats a LOT of discouraged workers!
December 2nd, 2011 at 9:00 am
How do you spell DEFLATION?
Average Hourly Earnings: -0.1
December 2nd, 2011 at 9:06 am
The new phone book’s here! The new phone book’s here!
December 2nd, 2011 at 9:09 am
It gets worse:
The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.
The labor participation rate declined to 64 percent from 64.2 percent.
This is a bad report despite the headlines.
December 2nd, 2011 at 9:10 am
mark, you wrote:
You are jumping to conclusions based on a single data point coming from only one month of data, which even haven’t been revised yet.
December 2nd, 2011 at 9:11 am
What bothers me about these numbers and reports is how they get “revised” later (and usually down), that the methodology behind their compilation is suspect when, after a person uses up their unemployment benefits, they simply disappear as a part of the statistics (- like they don’t exist!) and that it appears more often than not that all pronunciations from our government are blatant propaganda (designed to quell panic).
December 2nd, 2011 at 9:16 am
mathman, you wrote:
Is this a fact or biased perception?
December 2nd, 2011 at 9:17 am
In a sense people giving up is worse than people being unemployed, the unemployment numbers would be improved by a plague too.
December 2nd, 2011 at 9:28 am
@rootless
Single data point: Well, duh. But it’s more pertinent than one would normally think because it reflects an acceleration of a trend already in place.
re: comment to mathman: in order to give us what amounts to real time data, the BLS has to adjust the raw numbers using a statistical model. That model is derived from historical trends that may or may not still be relevant. I would argue that the model is unlikely to be relevant since we are in an economy that hasn’t existed for 80yrs and for which data is nonexistent or unreliable (i.e the 1930s: post-real estate bubble, post(?) financial crisis, interest rates at zero, on the cusp of deflation, inter alia).
December 2nd, 2011 at 9:48 am
With a participation rate now above to break below 64%, I call BS on the usefulness of the unemployment rate (U-3). With the participation rate back down to where it was nearly 30 years ago, the unemployment rate is more a political stat than a true economic measure of labour conditions.
December 2nd, 2011 at 9:51 am
Denninger slaps the shit out of this report:
http://market-ticker.org/akcs-www?post=198461
December 2nd, 2011 at 10:59 am
mark, you wrote:
This is the data set, isn’t it? I hope I got the right one:
http://research.stlouisfed.org/fred2/graph/?id=CES0500000003
When I look at the monthly or quarterly percent changes I don’t see such a trend in place for the last two years, even less any acceleration. The monthly change is between 0.1 and 0.2% on average since the end of the last recession, with growing swings from month to month and the occasional dip in the negative. I don’t see that anything different could be deduced from this month’s data point. There isn’t any statistical significance in this monthly change.