Barry has been crushing the BLS flat-earthers the past few days.

Resistance, however, is futile.  Try as I might not to opine on the 1.2-million-one-month-drop-in-the-labor-force, I cannot help but spill a few pixels of my own.  So here goes.

Let’s start with last month’s BLS Employment Situation release.  It contained a box, on Page 4 (of the PDF), that included the following heading and text (emphasis mine):

Upcoming Changes to the Household Survey

Effective with the release of The Employment Situation for January 2012 scheduled for February 3, 2012, population controls that reflect the results of Census 2010 will be used in the monthly household survey estimation process. Historical data will not be revised to incorporate the new controls; consequently, household survey data for January 2012 will not be directly comparable with that for December 2011 or earlier periods. A table showing the effects of the new controls on the major labor force series will be included in the January 2012 release.

So right there, in black and white, BLS explicitly told its users that January 2012 and December 2011 (and earlier) simply would not be comparable — and that would obviously be the case notwithstanding how the various numbers broke.

Overlooking that caveat is one thing, I guess.  Being corrected all over the web and then not correcting and/or retracting is something else altogether.

ADDING:  For what little I’m sure it’s worth, whenever I have had a question about an economic release — and that’s dozens (hundreds?) of times — I have picked up the phone and inquired directly of the issuing agency.  Guess what?  They’ve always been happy to help.  Point being, there’s no need to go out with bad information or run your mouth when you have doubts.  Of course, this will be of no comfort to the tin-hatters who claim the agencies are in the bag.

Source:
December 2011 Employment Situation
BLS Employment Situation News Release, Friday, January 6, 2012
USDL-12-0012

Category: Data Analysis, Mathematics, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

40 Responses to “BLS Warned About Census Adjustment in December 2011”

  1. AHodge says:

    Bingo
    now it is an intelligence test
    but WTF i get moderated out on paulson?

  2. rocketgas says:

    This BLS BS is getting old. If the data is non-comprable how can you have an opinion of it good or bad?

  3. michael-D says:

    all this debate seems to be proving is that BLS reporting is open to interpretation rather than being definitive in one way or another. frankly, i don’t know how to qualify the january NFP after everything i’ve read from you, santelli, denninger, zerohedge, etc.

    here’s a question though … if the january ’12 household survey isn’t comparable to previous periods … then what is it comparable to?? is this like retailers pulling every stunt imaginable to hinder shoppers from successful price comparisons?

  4. Petey Wheatstraw says:

    “Historical data will not be revised to incorporate the new controls; consequently, household survey data for January 2012 will not be directly comparable with that for December 2011 or earlier periods.”
    ________

    Rephrased (at least, this is what it looks like): We’re moving the goalposts, again, so next year’s records will not be an actual continuation of, or bear any comparison with, any records previously kept. We have found that the old rulebook and method of record-keeping were becoming less useful to us, so this change will certainly help. Plus, we’re telling you about it, up front, so it’s all good.

  5. MayorQuimby says:

    You guys are simply wrong about this report and 5 or 6 blog posts won’t change this fact.

    “Crushing”? What is this a frat house?!

    http://market-ticker.org/akcs-www?post=201495

    Tax receipts are down yoy. Labor participation is down. ’nuff said.

  6. T_S says:

    Hi Mayor,

    There are two bits. I suspect you’re referring to the fact that you think
    the report is weaker than people suspect–I get that. You could have
    a lively debate about tax & labor participation rates with Invictus or BR.

    BUT

    they are *not* wrong about pointing out the fact that there is no real
    shennanigans here. BLS told you what would happen. They did not
    magically remove a million people from the workforce and try to
    pass that off in a sneaky fashion. As much as I like Santelli, he’s
    wrong here.

    best of luck to everyone

    Tim

  7. MayorQuimby says:

    T_S-

    Barry claimed people were lying about the report. They weren’t. He also claimed the report was strong. It was not. I don’t know if there are shenanigans are not. I actually think not. And there was sector growth which is a positive. But the negatives outweigh the positives in this report so I would claim the report was mildly negative.

    Invictus: Yes, they were. That much is not up for debate. Whether or not the report was “strong” (it was), is at least a matter of some subjectivity; that 1.2 million did not drop out of the labor force is not.

  8. biscuits says:

    Could pundits not mentioning this and instead saying the NFP report was unequivocally strong be construed as cheerleading?

    “So right there, in black and white, BLS explicitly told its users that January 2012 and December 2011 (and earlier) simply would not be comparable — and that would obviously be the case notwithstanding how the various numbers broke.”

  9. notakid says:

    One can only think that the vast majority are driving clicks or eyeballs and it is (as usual) just a one-down-manship to see who can sling the most b.s.

    Any one month report is nothing to bother with.

    Yes, the BLS said they were changing the method and warned as to comparing.

    Now, why not give us the same figure matched up against the changed ones?
    Or did they and I didn’t see it as I don’t pay much attention to the pumpers&dumpers that have a position and will by god force anything to fit.

    Useless drivel, sorry , but much of it is better tuned out.

  10. MojaveMax says:

    The caveat that the numbers are not comparable with previous periods should have been included in the current report as well as the old report. The report should also say that we don’t know if unemployment has increased, decreased, or stayed the same, since the current numbers are not comparable to the previous numbers.

  11. SilverOz says:

    @notakid

    They did provide a table to show what the change would have been sans the revisions (and remember, these are once a decade revisions, not once a year). The change in “not in the labor force” would have been a whopping 75k without the revisions. The change in employed would have been +600k without the revisions.

  12. b_thunder says:

    If “…data for January 2012 will not be directly comparable with that for December 2011 or earlier periods”, doesn’t that make the date nearly WORTHLESS???
    Without comparison to the prior periods, how can one determine the trend???

  13. econimonium says:

    I had to endure people like this in Grad School. One day, in our Economics class the professor performed an interesting experiment. He handed everyone a worksheet for calculating unemployment and one for calculating GDP. On the worksheet was the way it was calculated by the government exactly. The only rule was that your method of calculation had to use justified data and had to be mathematically rigorous.

    Try as they might these people couldn’t come up with anything. Or when they did there was no statistical difference between their numbers and the governments. I think that says everything right there and that was the professor’s point: political motivations have no place when you’re talking about a data-driven result. Especially in business or investing. But that doesn’t stop people from making all sorts of intellectually lazy assertions and not be willing to actually back up those assertions with rigorous math ;) Like the comments above ;)

  14. MayorQuimby says:

    @Invictus-

    “Yes, they were. That much is not up for debate. Whether or not the report was “strong” (it was), is at least a matter of some subjectivity; that 1.2 million did not drop out of the labor force is not.”

    No, they weren’t. We STILL have to back the BLS adjustments OUT – even if they are typical for this time of year. And Denninger addresses the rest:

    http://market-ticker.org/akcs-www?post=201495

    Finally…the report was weak. But you guys believe what you want:

    http://data.bls.gov/timeseries/LNS11300000

    Tax receipts down. I’m STILL waiting for you guys to address either one of these.

  15. biscuits says:

    Since you threw Biderman under the bus, it is only fair to see his response. He questions why BLS uses stale survey data when withholding data would give a more accurate picture:

    “Why does the BLS and Bureau of Economic Analysis not use this real time Treasury data? What are they afraid of? The only reason they might not want to use real time data is that then who would need the thousands of govt economists who are good at doing surveys and seasonal adjustments? Not one person who responded to last Fridays Daily Edge asked or commented about my question as to why the BLS does not use the real time data. Nobody!”

    http://trimtabs.com/blog/2012/02/07/bidermans-daily-edge-262012-the-bls-and-beas-use-of-snail-mail/

  16. nades says:

    “A wise man said dont argue with fools

    Cause people from a distance cant tell who is who”

    :)

  17. Lukey says:

    Regardless, isn’t it a bit counter intuitive to think that, in the USA, with a growing population and the world’s highest GDP, it makes sense that the workforce is declining? We still have a $3.5 trillion government to pay for and is it reasonable to assume we can do that with a declining workforce? Or that we can continue to grow GDP when the pool of producers is decreasing? Will one of you guys please tell me why this is good news, even with it being a “ten year” figure (although it might be reasonable to assume most of the drop came in the latter part of the decade)?

  18. crunched says:

    They better keep ramping those futures as hard as they can… If the economy hasn’t in fact turned some magical corner – I think it has not – then there will be no ‘adjustments’ to save the number next month. Three and a half weeks and counting… Flash Crash ahead.

  19. sangfroid says:

    John from another blog states:

    “The BLS report, page 7:

    The adjustment increased the estimated size of the civilian noninstitutional population in December by
    1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and
    persons not in the labor force by 1,252,000. Although the total unemployment rate was unaffected, the
    labor force participation rate and the employment-population ratio were each reduced by 0.3 percentage
    point. This was because the population increase was primarily among persons 55 and older and, to a
    lesser degree, persons 16 to 24 years of age. Both these age groups have lower levels of labor force
    participation than the general population.”

    I have downloaded the said report and the passage is indeed in there.

  20. whskyjack says:

    What I am seeing is that a number of people don’t even understand what is being measured and how.

    I would suggest you start by reading the BLS hand book
    http://www.bls.gov/opub/hom/

  21. efrltd says:

    The BLS did make one glaring problem. The BLS certainly could have dual calculated the latest figures using both the old standards and the newest. That would have, at least, permitted the user some means to calculate the magnitude of the purely procedural factors. Instead they neglected to do so. Throughout this recession the the reliability of gov’t economic statistics has been doubtful. And with an election year coming up, the reliability will be less. I for one believe so-called “normal” seasonal effects when the base is tilted off the track make no sense. Year-over-year were the only hope to walk around this problem. Now the year-over-year BLS employment stats throughout 2012 will be off by this drop in the data.

    ~~~

    BR: Let’s do 2 calculations: One with the latest updated data for normal people, and another using old outdated data we know to be wrong for the lunatic fringe.

    The BLS certainly could have dual calculated the latest figures using both the old standards and the newest. That would have, at least, permitted the user some means to calculate the magnitude of the purely procedural factors. Instead they neglected to do so.

    Invictus: Uh, actually they did do exactly that. Thanks for playing.

  22. Futuredome says:

    No surprise it is the Austrian clique whining the loudest. Typical Ashkenazi aholes. Much like Marxism, they represent the extremes of Ashkenazi thought. The enslavement of the gentiles is a goal they both strive for.

  23. DeDude says:

    @MayorQuimby;

    If you really think that tax-receipts are a great measure of employment you have been drinking a little to much of the right wing cool-aid. People adjust their tax payments regardless of changes in income for all kinds of reasons and particularly at the end of the year.

  24. Master Shake says:

    The only thing that Barry’s been crushing are his own straw men. How much have you donated to Obummer’s Super PAC, Barry?

    ~~~

    BR: Not a penny, I’m an independent. But thank you for following our comment instructions so precisely.

  25. Greg0658 says:

    question for you data diggers .. if a National Guard soldier returns and asks for his job back, and the factory is willing to open his CNC machine back up to him .. is he counted twice?

  26. whskyjack says:

    I believe the Master Shake points to the problem with the recent numbers. They aren’t politically satisfying for certain groups. and the opposition to them is more politically based rather than reality based.

    Jack

  27. whskyjack says:

    Greg0658

    Go read the link I posted above. It will help with some of those problems.

  28. MayorQuimby says:

    @DeDude-

    Oh give me a break. Tax receipts are the most reliable indicator out there. I don’t know a single person that has adjusted anything on a weekly basis. Simply put, you’re making crap up at this point.

    Sometimes I think people just want to argue and ‘sound correct’. VERY few people actually want to figure out what’s going on.

    Which is what makes a market!

    Anyways, the jobs situation is improving slightly but not enough to keep up with labor force dropouts or population growth.

    The situation is bleak and getting bleaker with price increases for fuel, heat, food etc.

    You will see.

    You will all see.

    And you will all repeat the colossal, mind numbing stupidity of the past thirty years AGAIN.

    Future people will look back in absolute amazement that we keep repeating this shit.

    And you all STILL BELIEVE the Fed has any power, that gvmt creates jobs and prosperity and that money comes from the Fed.

    Unreal.

  29. Vilgrad says:

    On Friday the hyperbole utilized by the media mouthpieces was off the charts, leading to an all-out brawl between the critical thinking blogosphere and the non-thinking ”professionals” spouting the government sanctioned propaganda. Accusations flew back and forth about who was misinterpreting the data. I found it hysterical that anyone would debate the accuracy of BLS (Bureau of Lies & Swindles) data.

    The drones at this government propaganda agency relentlessly massage the data until they achieve a happy ending. They use a birth/death model to create jobs out of thin air, later adjusting those phantom jobs away in a press release on a Friday night. They create new categories of Americans to pretend they aren’t really unemployed. They use more models to make adjustments for seasonality. Then they make massive one-time adjustments for the Census. Essentially, you can conclude that anything the BLS reports on a monthly basis is a wild ass guess, massaged to present the most optimistic view of the world. The government preferred unemployment rate of 8.3% is a terrible joke and the MSM dutifully spouts this drivel to a zombie-like public. If the governing elite were to report the truth, the public would realize we are in the midst of a 2nd Great Depression.

    http://www.theburningplatform.com/?p=28887

  30. notakid says:

    As a lunatic , I have scanned this thread again and am now more certain than ever that these monthly “reports” soon to be adjusted./or not are playthings for the “econ0tics” to huff and puff over.

    Looks like the next 10 year adjustment will be needed to tell us where the lunatics were today.

  31. howardoark says:

    I’ve been trolling the internet (sort of) since it was called Darapanet and this is the single weirdest thing I have ever seen

    Futuredome Says:
    February 7th, 2012 at 6:11 pm

    No surprise it is the Austrian clique whining the loudest. Typical Ashkenazi aholes. Much like Marxism, they represent the extremes of Ashkenazi thought. The enslavement of the gentiles is a goal they both strive for.

    That includes the dating advice for obese lesbians web site I found in 1994 and a clip involving whole milk and analingus. Thanks for staying true to the site philosophy and letting people follow your advice at the top of the page. I just hope it wasn’t a joke I didn’t get.

  32. rootless says:

    Futuredome wrote:

    …Typical Ashkenazi aholes. Much like Marxism, they represent the extremes of Ashkenazi thought. The enslavement of the gentiles is a goal they both strive for.

    WTF?

    “Ashkenazi Jews, also known as Ashkenazic Jews or Ashkenazim (Hebrew: אַשְׁכֲּנָזִים‎‎, pronounced [ˌaʃkəˈnazim], singular: [ˌaʃkəˈnazi]; also יְהוּדֵי אַשְׁכֲּנָז, Y’hudey Ashkenaz, “the Jews of Ashkenaz”), are the Jews descended from the medieval Jewish communities along the Rhine in Germany from Alsace in the south to the Rhineland in the north. Ashkenaz is the medieval Hebrew name for this region and thus for Germany. Thus, Ashkenazim or Ashkenazi Jews are literally “German Jews.” Later, Jews from Western and Central Europe came to be called “Ashkenaz” because the main centers of Jewish learning were located in Germany. Ashkenaz is also a Japhetic patriarch in the Table of Nations (Genesis 10).”
    (http://en.wikipedia.org/wiki/Ashkenazi_Jews)

    If this was my blog I rigorously would ban anti-semitic incitement. It’s offensive.

  33. Greg0658 says:

    whsky thanks for respond .. I checked the list of data reports ..
    about 1/2 hour after dropping that – it sunk in I’m just about sure – scenario would be 2 jobs – because thats how we count in this country .. same as a gas station cashier works 4 hours 6 days a week and another 4 hours grilling burgers during the noon rush across town (for the fun of it) .. actually so benefits don’t fully kick in*

    also thanks for lesson in tribes post 1st apocalypse (flood) .. interesting BP there .. not sure on that whole concept with the tribes – ie: here on the continent of NAmerica .. but you’all make interest’g stories to justify the internet bill every month

    fyi – been singing “my tribe ‘s better than your tribe” (in a sadsack tone to the tune of that commercial about hotdogs) with the Santorum takeaway yesterday

    seems I should leave you upbeat – tides come and go – the tide will rise again

    *coda – why I support HC reform (& beyond) .. what a game we’ve written into law

  34. Greg0658 says:

    in the spirit of this tangenting thread – thought you might like this:

    “Want to Understand Republicans? First Understand Evolution
    Chris Mooney – author The Republican War on Science and The Republican Brain
    http://www.huffingtonpost.com/chris-mooney/want-to-understand-republ_b_1262542.html
    Earlier this week, yesterday’s Republican primary champ Rick Santorum called global warming a “hoax.” Yes, a hoax. In other words, apparently scientists are in a global cabal to needlessly alarm us about what’s happening with the climate ….”

    I could speculate further on brain evolution of the religious vs the scientific .. but that would be: imho stuff

    funny how all this homogenizes :-)

  35. DeDude says:

    @MayorQuimby;

    I guess you don’t know a lot of small business owners (and for monthly data to be affected they just need to make one adjustment in the last month of the year).

    I guess we will all see – the question is when? You have been predicting the immediate arrival of Armageddon for as long as I can remember. If it isn’t the imminent explosion in interest rates and inflation then its something else.

    With regards to the presumed huge error in unemployment introduced by the “census adjustment” the good news is that the following months will not have that one time deal to explain away the good news. So when the unemployment picture keep improving slowly in the next 6 months will all the howlers admit their mistakes? or will they just go silent and pretend they never howled?

  36. biscuits says:

    So you’re saying the Bernank is wrong? Is he a howler? Will he go silent and pretend he never howled?

    http://www.bloomberg.com/news/2012-02-07/bernanke-says-8-3-unemployment-understates-weakness-in-u-s-labor-market.html

    “So when the unemployment picture keep improving slowly in the next 6 months will all the howlers admit their mistakes? or will they just go silent and pretend they never howled?”

  37. biscuits

    This remains a subpar labor recovery — jobs are not plentiful, except for entry level low payers; there is significant capacity underutilization and underemployment.

    Of course, that is a very different statement than misunderstanding decennial census adjustments or annual January seasonal changes. No, 1.2M people did not drop out of the labor force last month. And those eejits who want to claim January saw 2.7 million people lose their jobs (NSA), they must also add that 3 million people got jobs in November and December (NSA).

  38. Greg0658 says:

    can’t sleep – must fix 9:37am .. not hotdogs try “my dog ‘s better than your dog – cause he eats kenLration, my dog ‘s better than yours”
    http://www.youtube.com/watch?v=5E9H_DvwOVc

  39. biscuits says:

    Jobs are not plentiful for the entry level low payers either. Most jobs, even low paying ones, want experience. Particularly concerning is the growing number of young adults who are being left behind.

    One comment on Huffpo’s article on the Pew Research jobs poll said boomers are holding on to their jobs longer because they are afraid they won’t be able to find private health insurance to replace their employee insurance if they retire. He thinks lowering the medicare age to 60 would open up a few hundred thousand jobs. Don’t know if there is any data to back that up, but an interesting thought. (I usually avoid Huffpo comments, too many knee-jerk libs)

    http://www.pewsocialtrends.org/2012/02/09/young-underemployed-and-optimistic/

    ” jobs are not plentiful, except for entry level low payers”

  40. [...] the “1.2-million-people-dropped-out-of-the-labor-force” story viral.  Of course, that was embarrassingly wrong, but made its way thru the media, including to a White House press briefing. (BTW, have the sources [...]