Despite the cries of the permabears and Rick Santelli, this was unequivocally a strong NFP report. The headline numbers were 243,000 net jobs, as unemployment dipped to 8.3%. The Labor Pool increased — suggesting that the improvement was not the usual employee retirement and discouraged worked giving up looking for work.

When we go beneath the headlines, we usually see the data’s warts — not this time. Across the board this was a surprisingly strong report. BLS called described job growth as “widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing.”

As noted earlier, no single month matters as much as the overall trend — and the trend is unequivocally upwards for the better part of 3 quarters now.

Lets go to the details:

• Total nonfarm payroll employment rose by 243,000 in January. Private-sector employment grew by 257,000;
• Unemployment rate declined by 0.2 percentage points in to 8.3%; Its down by 0.8 point since August.
• The Household survey, used to measure Unemployment rate, added a whopping 491,000 jobs.
• The number of unemployed persons declined to 12.8 million, from over 16 million at the recession peak.
• Employment-population ratio rose to 58.5% in January (Seasonally adjusted)
• The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.8 hours.
• Average workweek for all employees was unchanged in January, but the manufacturing workweek increased by 0.3 hour to 40.9 hours (likely multi shift auto mfr); Factory overtime increased by 0.1 hour to 3.4 hours.
• Average hourly earnings for all private employees rose by 4 cents (0.2%) to $23.29. Over the past 12 months, average hourly earnings have increased by 1.9%
• November NFP was revised from +100,000 to +157,000; December NFP was revised from +200,000 to +203,000.
• Benchmarks were also revised upwards — as of December 2011, total employment was raised by 266,000 (231,000 NSA)

The Negatives?

• Unemployment rates for teenagers 23.2%; for blacks is 13.6%; Hispanics 10.5%
• Long-term unemployed (jobless for 27 weeks +) was little changed at 5.5 million — thats 42.9%
• Persons employed part time for economic reasons, at 8.2 million, changed little in January; 2.8 million persons were marginally attached to the labor force, and 1.1 million discouraged workers, essentially unchanged from a year earlier.
• Employment in information declined by 13,000, including a loss of 8,000 jobs in the motion picture and sound recording industry
• Employment in construction increased by 21,000 in January, likely a temporary blip caused by unusually warm weather — 206,000 people were unable to work due to weather, well below normal for this time of year.

The one dark spot is the nagging, persistently long-term unemployment data. I suspect that is as much due to secular trends than cyclical recovery and is unlikely to improve anytime soon.

All told, its tough not to like this NFP report. Markets surely do, with the Dow up 140.


Employment Situation Summary
BLS, Friday, February 3, 2012

Did Economy Really Create 500,000 Jobs?
Real Time Economics February 3, 2012

Category: Data Analysis, Employment, Wages & Income

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.

80 Responses to “Tearing Apart January 2012 NFP data”

  1. VennData says:

    Listen to Rick Santelli!

    …then do the opposite.

  2. Through the Looking Glass says:

    Well, as we suggested before the NFP report, this is merely rotation from high paying jobs to “low-wage jobs.” And no, it’s not our words – this is what CRT Capital says. Per Bloomberg: About 113k of NFP gain from “low wage jobs,” ,

    PHD’s driving cabs to stay alive. Whoopee the economy is rescued!

  3. Tom Porcelli says:

    If you are simply taking a snapshot of this payroll report, it would be difficult to characterize it as anything but a good one – unless you have an axe to grind. This certainly doesn’t sound the all clear on the economic backdrop as the well advertised headwinds remain in place, but if you had your pick to see one economic variable show real improvement, it would unquestionably be this most foundational report. While this report is not a definitive game-changer in terms of our outlook for growth, it is certainly a step in the right direction. In terms of the internals of the report, everything you would want to be up was up.

    –Tom Porcelli, RBC Capital Markets

  4. rktbrkr says:

    Poor Mutt, he’s going to have an uphill slog if the economy and employment follow the stock market up. Is he going to argue things would have been better if Bush and Obama skipped the stimuli programs and let the markets operate freely and purge the excesses of the bush/greenspan/Bernanke years with a good old fashioned depression?

  5. louis says:

    Does this report do anything for the housing depression?


    BR: No

  6. Mike in Nola says:


  7. Robespierre says:


    “this was unequivocally a strong NFP report.”

    Then it begs the question if things are going so well why does the Fed need to stay at Zirp until 2014?


    BR: The publicly announced reason are nonsense — the real reason is to help rehab the balance sheets of insolvent money center banks.

  8. Market Panic says:

    February 3, 2012, 10:13 am


    How many jobs did the American economy add in January?

    The Labor Department estimated on Friday that the economy gained 243,000 jobs.

    The department also estimated that the economy lost 2,689,000 jobs in the month.

    The difference in the two numbers is in seasonal adjustment. Employment always falls in January, as temporary Christmas jobs end. So the government applies seasonal adjustment factors in an effort to discern the real trend of the economy apart from seasonal fluctuations. The actual survey showed the big loss in jobs. The seasonal adjustments produced the reported gain of 243,000 jobs.

  9. Mark Down says:

    BR, saying something POSITIVE…. The drinks will be flowing on the choo-choo back to Lung Eye Lind !!!

  10. Joshua Shapiro says:

    –We would nonetheless caution that January results are dominated by the seasonal adjustment process and therefore we would not rush to extrapolate the rates of gain reported today. For instance, the unadjusted change in payrolls in the month was -2,689,000, which translated into the aforementioned +243,000 after seasonal adjustment. So, it only takes a small miss by the seasonal to inflate the reported seasonally adjusted gain. Such an outcome could be caused by significantly warmer/dryer weather than normal (certainly the case in many areas during the month) and/or an under-estimate of job losses by the “birth/death” adjustment. Although that statistical measure makes a large negative adjustment to the non-seasonally adjusted payroll figure in January (-367,000, or almost 14% of the reported decline in total payrolls), there is no guarantee that it is accurate, and in times of economic distress it could still be understating the “death” of businesses.

    –Joshua Shapiro, MFR Inc.

  11. wally says:

    Yes, this report does something for the housing depression. Any increase in employment helps.

  12. Northeaster says:

    How do 1.2 million no longer in the labor force in one month pay taxes?

  13. MaxThrax says:

    I guess with an improved economy, conservatives are going to have to count on white cultural panic to get elected.

  14. Francisco Bandres de Abarca says:

    Another point upon an excellent employment trend.

    Besides, this news and the subsequent rally will help cinch the success of my Superbowl party, since I placed an optimistic order near the end of trading yesterday. Based upon the gain of that position, I should now be able to double (that’s right, double!) the quantity of my Velveeta cheesy bean dip for the party on Sunday. Hot damn! Maybe even go for organic blue corn chips, but that might be crazy talk so far from the end of today’s session.

    Oh, almost forgot . . .

    Full disclosure: long KFT

  15. bullionaire says:

    Based on the chart per

    the participation rate dropped to 63.7M from 64M in Dec/11, the lowest participation rate since Jan 1982 (30 years ago!!)

    What was the US population back in 1982? Per US Census about 231,000,000 (or about 80,000,000 less than it was in 2011!)

    So those 63.7M people actually participating in today’s work force have to support 80,000,000 more people today (both in terms of taxes & what is left over after taxes) than the 63.7M did in 1982 (along with supporting the ongoing ZIRP bailout of Wall St, Fanny & Freddy + support two wars & perhaps a bigger one with Iran)

    Yet this fact is overlooked in favor of some unrevised, seasonally adjusted monthly estimate???

    Happy days are truly here again!!!

    4 more years!, 4 more years, 4 more years!

  16. Orange14 says:

    So are we now heading into an Obama Bull Market? My only regret is that I didn’t buy more WHR late last year when it bottomed out. We still have to get through the Spring with continued gains in employment (the last three Springs were not kind) and I suspect if this trend continues the market will respond favorably and the already damaged campaign of Mitt Romney will leave Republicans wishing they had an alternative candidate.


    BR: I dont believe in presidential bull markets, but if you do, Obama’s beganm March 2009

  17. AlexM says:

    Sign on a billboard I saw recently along a major urban expressway:

    Help wanted: Truck drivers and mechanics, $1000 signing bonus for qualified drivers.

    Shocked to see it, and who would have thought that truck drivers needed signing bonuses?

  18. Dan Greenhaus says:

    Our quick read through of today’s report shows that this is unquestionably a positive report in nearly every way. Average hourly earnings isn’t as strong as we’d like it to be but given the strength in other areas, we’ll put off our negativity for another day. Further, 206,000 people were unable to work due to weather; that is well below the average for January and could have had an effect on several sectors including construction. This could have put upward pressure on the overall number, making the report look better than it otherwise might have. In terms of the broader outlook, one report does not a trend make but there is little doubt that U.S. economic data continues to surprise on the upside.

    –Dan Greenhaus, BTIG LLC

  19. Your selective perception is showing . . .

  20. DrungoHazewood says:


    He’s positively ebullient compared to last July.

    I live in an relatively economically depressed area and home repair weekend warriors are out in force. The guy next door was working on his house way past dark. People are coming out of their bunkers. For me the phone started ringing off the hook about 2 months ago, and my partner said that the economy must be improving. Of course, over the last few years, every time I thought things were getting better, we dipped as the fugoid continued. I guess the ECRI has some ‘slapning to do.

  21. Petey Wheatstraw says:

    ‘White Cultural Panic,’ would be a great name for a band.

  22. Steven Ricchiuto says:

    –Now it becomes critical to see if the consumer spends or boosts saving from 4% to 4.5%. I think the data is distorted somewhat by the sharp weather swings between this year and last but this could take a couple of more months to correct. The claims data does, however, suggest that the payrolls should be growing by 175,000 per-month instead of last year’s 125,000.

    –Steven Ricchiuto, Mizuho Securities

  23. AtlasRocked says:

    The goal of investors is to make a profit off of the deceiving numbers if a profit is there to be made.

    The declining participation rate and increasing dependents will only become important when the investors can’t see a way to make money off of it, or when the “More taxes on the 1%” chant suddenly becomes “More taxes on the 2% …the 4% …the 10% ….more taxes on the profiteers in the stock market! ” wage earners.

    If you want to be a moralizer – then go start a church.

    Now get back to minding your investments and bashing the 1%. Nothing to see here, move along now.


    BR: I totally disagree with your statement “The goal of investors is to make a profit off of the deceiving numbers if a profit is there to be made.”

    Rather: The goal of investors is (or at least should be) to deploy their risk capital in a way that maximizes their return relative to the risk levels they are willing to assume.

    That is all

  24. Petey Wheatstraw says:

    When my grandpappy was laid-up in his coffin at the funeral home, I saw his finger twitch.

    Swear to god. Seen it with my own eyes.

    They buried him anyway.

    This reminds me of that.

  25. DrungoHazewood says:


    Good Lord man! That’s participation rate, as in %.

  26. Through the Looking Glass says:

    You cant take any report these days without trying to decode some spin because we all know its the spin machine that holds the mud together anymore.

    A: millions of people have been let go
    B: mid management has been given the choice to go seek a new job or stay on in one of the fired persons stations.
    C: Positions filled= new hiring

    This Same thing happened with the auto industry AKA “channel stuffing”. When the cars are sent out to dealers their creative accounting allows that as a sale when actually they are sitting in the dealers lot.

    If you want to tear something apart you have to begin with discounting the premise . And in this case you’re made to believe that the bureau of labor statistics knows the difference between duck species. They aren’t all the same just because they quack .

  27. Bonddad Blog says:

    No Rick Santelli and Zero Hedge, One Million People Did Not Drop Out of the Labor Force Last Month

  28. codepoet says:

    interestingly this a.m., Santelli then ooh’ed & ahh’ed over the ISM services report!…which squares with the BLS report (“…employment gains in professional and business services, leisure and hospitality, and manufacturing.”). Last time I checked those were services, right??? He cherry picks to make his political point every morning. I get it Santelli, you don’t like Obama. Is there something maybe deeper at work there perhaps?

  29. tarheel95 says:

    This was a strong report. Hard to put a negative spin on although that hasn’t stopped the doomsdayers and/or partisans from trying to make the data conform to the ground they’ve already staked out.

    Along those lines, one crosscurrent that’s circulating—–the warning about the huge ‘increase’ in the number of folks who are no longer in the labor force. The drudgereport links to zerohedge lamenting the 1.2 million who purportedly dropped out of the labor force in Jan. [I love drudge---good stuff----but have you noticed that there's no such thing as good economic news? When there's improvement in the weekly initial unemployment claims, they either don't put up a headline or they talk about the level! When claims rise, that's noted in a red headline at the top of the page.]

    Back to today’s release, pundits need to read the econ reports before they spout off:

    It turns out that the Household nos. were updated in January in a routine annual adjustment to the population controls used to weight the survey. BLS introduced for the first time population controls based on Census 2010. They don’t go back and revise history so you have to be careful when trying to compare Jan to Dec.

    Notice in summary table A-1, the last column with the Jan-Dec change ‘ blanked out? Oh I forget, you don’t need to look at report before you draw a conclusion from it.

    The Dec-Jan changes in labor force, employed, unemployed, not in labor force, etc need to be adjusted to remove the impact of the pop changes.

    SEE TABLE C in the release—it nets it out.

    The bottom line is that the labor force expanded modestly (+250K) in Jan, the no. employed expanded fairly sharply (+631K–which was statistically significant), the no. unemployed went down a bit (-381K) and…….the 1.2 MM that presumably dropped out of the labor force…nope, the “not in the labor force” category actually improved.

    In any event, the nonfarm nos (as opposed to the household—they’re 2 distinct surveys) are generally better gauges of where the cycle is headed.

  30. Market Panic says:


    You know this employment report is a statistical fantasy, yet you are not mentioning anywhere about ~3 million seasonal adjustment (when there are such large adjustments, 300K up or down is a statistical fluke).

    The actual survey showed the big loss in jobs (2,689,000 jobs in the month). The seasonal adjustments produced this fantasy gain of 243,000 jobs.


    BR: OMIGOD — in January? WTF could have caused that?!?

  31. HEHEHE says:


    It’s the lowest participation rate in 30 years. They dumped 1.2 million off the rolls. Man you must be wanting to dump some positions:) Hilarious!

  32. Pantmaker says:

    Go ahead…buy this market right here right now…double dog dare ya…

  33. HarleyHoward says:

    Do any of you actually believe anything coming out of this administration in this election year?
    Take it from us, things are NOT peaches and cream here in the Heartland and we know when we are being fed Bullshit!
    Common Sense from the Heartland –

  34. Bill Wilson says:

    I admit that this is a good report, and as Tom Porcelli points out above, this is the report where you want to see improvement.

    I do have a couple of bearish thoughts. One is that that January was the 17th warmest on record, so seasonal adjustments in the recent strong economic data may be misleading.

    The other is that this economic recovery has been lumpy, so it wouldn’t be unprecidented to see months of strength followed by months of weakness. In my opinion, post credit crisis economies are plagued by too much slack, which means strong growth can quickly lead to an economy that is over capacity.

    That doesn’t mean a recession is coming, but I’m confident that another recession scare is coming. This year could look like the last two. A strong rally over the winter, sell off starting around May, Fed action over the summer.

  35. Joe Friday says:


    Once again, the deep plunge in the National Labor Participation Rate began early in the Chimpy Bush administration:


    You’re woefully behind the curve.

  36. Old Rob says:

    Barry should stay with the stogies but push back on the Kool-Aid.

    This media happy-talk. Nothing more; nothing less.

  37. Millan L. B. Mulraine says:

    The details of the report were unambiguously positive, as employment gains were quite broadly-based, with jobs gains in construction (+21,000), construction (+50,000), trade and transportation services (+37,000), business services (+70,000) and leisure and hospitality (+44,000). Wage growth was also decent, as average hourly earning rose at a 0.2% month-to-month pace, while aggregate hours worked edging up 0.2% m/m.

    –Millan L. B. Mulraine, TD Securities

  38. bullionaire says:

    DrungoHazewood, thanks for the correction.

    If I may state, it doesn’t change the fact that the participation rate in Jan/2012 is the lowest in 30 years and it hardly changes the gist of my post.

    Since the financial crisis began to be recognized by the mainstream in 2007, the trend in the labor participation rate has steadily dropped from 66% to below 64% for the first time in 30 years, not exactly a positive trend

    Based on a US Census estimated population of 301M in 2007 & 311M in 2011, that translates into 100,000 fewer people participating in the workforce, which on a collective basis, has to support via taxes (& whatever is left of their disposable income), 11,000,000 more people who’ve dropped out of the workforce. (Incidentally, 11M also approximates the increase in US population over 2007-2011).

    Add in the fact that the annual US budget deficit went from $163B in 2007 to $1.56T in 2011 (while total US govt debt went from just under $9T in 2007 to over $15T at end of 2011.

    So those fortunate enough to be working will be paying more of their nominal wages in terms of taxes to support the government’s bloated spending (50% increase in total debt under Barry’s admin), an increased cost of living (as the US continues to devalue its currency, price of food & gas go up), and the ever growing US population, including the growing number that simply drop out of the workforce, having given up looking for a job).

    Given those facts, I’d hardly get excited about a small blip in NFP…the much bigger picture looks bleak and trend is for it to get even bleaker

    Sorry to rain on the parade.

  39. bullionaire says:

    Joe Friday

    I wasn’t a supporter of Bush – I actually bought Obama’s Kool-aid change we can believe in, which turned out to be one of the biggest scams of all time, right up there with Wall St.’s subprime mortgage deals.

    Amazingly, people still support this teleprompter reader for President…

    Just the facts, eh Joe?

  40. ironman says:

    Thanks for the plug, Mark!

    For the record though, we should note that the analysis only covers the period through the December 2011 employment data. We’ll have a fresher take early next week….

  41. louis says:

    @me – Does this report do anything for the housing depression?

    BR: No

    @wally -Yes, this report does something for the housing depression. Any increase in employment helps.

    My sarcasm sides with BR on the original question. One would think the rise in any labor # would help the original problem , but it does not. We will overshoot on the downside no matter what the # is.

  42. moonmullins says:

    there are many aspects of this report to like, but for Barry to purposely not mention the 1.2 million that were dropped from the rolls (and yes, purposely, otherwise how else to explain its absence from a detailed look behind the headline) is just another example of partisanship. Barry you consistently slam those who don’t engage in full disclosure and likewise pat yourself on the back for an investment method that prides itself on seeking out ALL relevant data – so practice what you preach. An honest assessment of this report would be more balanced … job growth was much better than anticipated (243K actual job growth vs. 155K estimated), very good news, but there was a troubling loss of 1.2M from job rolls.


    BR: You mean the BLS baseline adjustment to reflect Census data? Dont be daft man, that’s not people magically disappearing — it reflect a change in he TOTAL POPULATION ESTIMATES from estimated to measured.

    “Never underestimate the power of human stupidity.” -Robert A. Heinlein

  43. Kevin_In_Philadelphia says:

    Happy to report that after 2+ years of unemployment and an additional degree in accounting, that I have re-entered the workforce as an auditor for a Big4 firm. I’m starting a little late at 31, but am exceeding grateful for the opportunity and ready to get rolling in a new career. It’s a new year, and (so far) everything is coming up Kevin!

  44. louis says:

    Kevin, congrats. Will you be buying a house this month?

  45. gordo365 says:

    Labor participation rate will continue to deteriorate as baby boomers retire en masse…

  46. gordo365 says:

    congrats Kevin!

  47. MayorQuimby says:

    Barry I’m surprised. This was a weak report. Labor participation!!! BLS adjustment was huge.

    Not terrible because there we across the board gains as well but overall it was mixed at best. Certainly not strong!

  48. Kevin_In_Philadelphia says:

    @louis, Thanks! I plan to continue living like a poor man and saving/investing as much as I can.

    @gordo, Thanks!

  49. Stephen Stanley says:

    –The January employment report is a blow-out number. It is strong in virtually every way that it could be. The data through January is not enough to definitively conclude that the economy has turned the corner (we had a similar spurt in payrolls and drop in the jobless rate about a year ago that quickly dissipated), but the labor market has very clearly improved. Moreover, the Fed’s assessment of the economy has proven, for the moment at least, to be egregiously too pessimistic. To be sure, even relative optimists like me did not see this coming, and there will undoubtedly be further twists and turns on the road to economic recovery.

    –Stephen Stanley, Pierpoint Securities

  50. tradeking13 says:

    BR, have you spoken recently to your buddy Lakshman Achuthan at ECRI? If so, what is his take on the recent spate of good economic news and does it change his call for an imminent recession?


    BR: Will see him next week and ask!

  51. MikeDonnelly says:

    266,000 additional jobs found in revisions, here’s the deep dive. 225,000 in Private Services (expected)

    Biggest miss, file under we are all professionals here… Clothing and clothing accessory stores – revisions lowered employment by 102,600 jobs or 6.9% of total ! Add 92,000 jobs to General Merchandise stores. Add 6.5% more jobs to Electronics (+31,000) Did a store or two get reclassified ?

    Eliminated 4.4% of all Broadcasting jobs (-13,000) and 4% of all Membership associations we really are “Bowling Alone” as 119,000 jobs disappear in revision.

    Revisions take away 168,000 jobs in the Health Care sector, and 17,000 in Air Transportation. In total of the biggest changes we take away 466,000 jobs, so need 691,000 to get to the net 225,000

    Add back 300,000 jobs in Professional and Business Services. 79,000 in employment (mostly temp) jobs.

    Another 113,000 jobs in Leisure & Hospital (90% of that from Food Services)

    Insurance carriers added 3% or 68,000.

    Already mentioned the 92k in Gen. Merch, plus 31k in Electronics, +16k in retail: Building

    Thanks for letting me geek out on the data.

  52. ZedLoch says:

    BR I think you need to repost your “understanding seasonal adjustments” entry.

  53. DW auto says:

    Received an Employment Information Form from my gov’t training specialist demanding employment information by February 1, or else she would “notify the State .. that you are non-compliant”. Didn’t respond, but admitted in a follow up phone call that I was not working but taking a class. Wonder if that put me in an employed category in this report. Wonder if the gov’t made a special effort this month to contact the unemployed for any evidence of work to goose today’s numbers.

  54. PipDog says:

    This is what concerns me…how do you overlook this. (Credit to Mish)

    “Quick Notes About the “Falling” Unemployment Rate

    •In the last year, the civilian population rose by 3,565,000. Yet the labor force only rose by 1,145,000. Those not in the labor force rose by 2,420,000.

    •In January, the Civilian Labor Force rose by 508,000.

    •In January, those “Not in Labor Force” rose by an amazing 1,177,000. If you are not in the labor force, you are not counted as unemployed.

    •Participation Rate fell .3 to 63.7%, taking out a 1984 low

    •Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

    Some of those labor force numbers are due to annual revisions. However, the point remains: People are dropping out of the labor force at an astounding, almost unbelievable rate, holding the unemployment rate artificially low.”

  55. troutbum says:


  56. troutbum says:


    The Chicago Fed has a paper in which they argue the reason for a dropping labor participation rate is Boomer retirements (~50%), that is to say, demographics instead of economics.

    Furthermore, the authors believe the rate will continue to drop and may never regain it’s old highs for many years to come.

  57. Neil C Denver says:

    The primary wart that I see is that wage increases over the past year have not improved worker’s standard of living because of inflation.

    Specifically, the average hourly wage for private-sector employees increased by 1.88% over the last year. ($23.99 vs, $22.86) Meanwhile, the year-over-year Consumer Price Index (CPI) increased by 3.56%.

    Additionally, the number of discouraged workers have risen considerably. Like it or not, for most lower and middle income families, that translates into a lower standard of living.

    A ‘bona fide’ American recovery may take decades due to the educational demands of good paying jobs. We currently rank in the bottom-third of all industrialized counties and lower than many emerging market countries. The way that our economy will adjust to the realities of a global economy might be for the ‘land’ content of h0mes to decrease in value. Long term trends (on semi-log scale) indicate an out of control housing spree which pushed nominal values to unsustainable heights. Reversion to the mean will be the order of the day.

  58. Frwip says:

    I’m looking at another series BLS LNU02300060 employment to population ratio for ages 25 to 54, unadjusted and take the year over year delta .

    25 to 54 is the prime employment age, when anyone capable of working should be working, it’s fairly insensitive to micro-demographic trends, and it doesn’t depend on useful but fairly fuzzy notions of labor force participation intent of the survey respondents.

    The series y/y delta has been solid red (0 or less) from Sep 2007 to Nov 2010 and only 3 isolated months in positive territory from Dec 2010 to Oct 2011 (Dec 2010 + 0.3%, Mar 2011 +0.20% and May 2010 +0.10%). Bad, very bad.

    Well, change is undeniably in the air. The y/y delta has been positive for the past 3 months +0.4%, +0.3%, +0.4%. That the first time we have two or more positive months in a row since Sep 2007.

    The employment picture is still very bad, 75%, versus 79.9% avg in 2007 and above 81% during the 1998-2000 peak years. But it looks like 2010-2011 will be the employment through of this cycle. Three more months like that and will be able to say that the upturn is here.

  59. Futuredome says:

    LPR is simply going to drop. It surged because of the Boomers, it dropped because of the Boomers. Accept that and move on.

    The real issue as funny as it is, is the Boomers goosing GDP the next decade dropping their overpriced health care insurance for cheaper Medicare. Since they are a large lot, that could boost purchases expanding the medicare window farther than 2021-23 limit as revenue surges from the boom.

  60. mad97123 says:

    It is starting to look like Achuthan, Hussman, Shilling, etc will be eating recession crow for valentines dinner.

  61. Sunny129 says:

    Whether one believes these numbers or not is immaterial b/c market took off and not many expected this number! To be certain one has to wait for the TREND in the coming months along with expected revisions. One has to manage his/her portfolio by willing to invest or stay invested with hedges in the ongoing ‘duel’ between the perception and the reality/fundamentals.

    Since the March of 2009 the power of perception aided by Ben & Co ( QEs+ ZRP) and FASB ( suspension of M to M accounting) has kept Risk-on movement stronger than Risk-off betters! Those who focus on the so called ‘fundamentals’ have been repeating that there is mis-pricing of the (credit) risk and suppression of price discovery.

    Lately I have accepted the fact that there is no longer free market. Assume the market is rigged and DEAL with it in a pragmatic way at a risk level i can manage. Since late Dec I significantly reduced my hedges against the market and went ‘long’ with covered call strategy.

  62. Frwip says:


    See my earlier comment. What Mish forgets is that unadjusted employment to working population (25/54) ratio has been going UP year over year for three months in row, something that hadn’t happened since the SUMMER OF 2007. First time we see that in four and a half years.

    I pick that very specific measure precisely because it’s a broad measure yet it’s also very insensitive to all the biases Mish mentions, population growth, seasonal adjustments, participation in the labor force , demographic trends (like the boomers retiring), etc.

  63. Joe Friday says:


    I wasn’t a supporter of Bush…

    My statement was historical, not political.

    Your lament in regards to the National Labor Participation Rate ignores the fact that its MASSIVE decline began early in the previous administration.

    I actually bought Obama’s Kool-aid change we can believe in, which turned out to be one of the biggest scams of all time, right up there with Wall St.’s subprime mortgage deals.

    Obama was not my candidate.

    Amazingly, people still support this teleprompter reader for President…

    Ah, every President since Eisenhower has used a Teleprompter.

    Just the facts, eh Joe?


  64. [...] is hard to argue with the strength of the January employment report.  (Calculated Risk, Bespoke, Big Picture, Capital Spectator, Felix [...]

  65. Calidony says:

    Wow, one would think that another couple of trillion dollars in added stimulas (debt) would have created more than a couple hundred thousand low paying jobs.

  66. MayorQuimby says:

    Denninger addresses Barry’s unwarranted and misguided comments about Santelli and others as regarding this jobs report:

    But you all here believe what you want to believe right?

  67. frodo1314 says:

    BR – I’m interested to know your thoughts on what John Crudele says here:

    Your comments say the Payroll Report was decidely strong, Crudele says the strong Report is a ruse.

    Let’s be clear I am in no way arguing against what you have posted here or attempting to make a coutner point. I would just like to know your take and thoughts on the “warts” Crudele exposes here. Does he have any valid points? I’m trying to reconcile your two views.


  68. CRUDELE: “The Labor Department reported a loss of 2,689,000 jobs in January.”


    That’s what I think of this column by Crudele (whom I like)

  69. Joe Friday says:


    Wow, one would think that another couple of trillion dollars in added stimulas (debt) would have created more than a couple hundred thousand low paying jobs.

    A) What “added stimulus” ?

    B) What “debt” ?

  70. Participation Rate Issue Less Than Meets the Eye

    As Aaron Goldstein and I have each noted, today’s jobs report must be a short-term boost to President Obama. Over at, Obama’s betting odds to win re-election in 2012 are up from 55.5 percent yesterday (and 54.5 percent the day before) to 56.8 percent, having traded above 57 percent this morning.

    But it’s economics I want to talk about for a minute, rather than politics.

    It is all the rage among conservatives, libertarians, and others who, like me, fear and loathe the Obama administration to point out the labor participation rate and suggest that the numbers are being manipulated to the advantage of Barack Obama and that labor statistics are barely-concealed “propaganda.”

    One of the leaders of this wave — and a guy who I think is generally quite a good analyst — is Tyler Durden who writes over at A perfect example is here.

    I have some sympathy to this argument, but I think it’s getting much more traction than it deserves, as you can see in the comments to Aaron’s note and my note about the employment numbers.

    But even someone who digs into the numbers as much and as well as Durden does can sometimes miss something important.

    In particular, Durden says that the civilian non-institutional population rose by 1.7 million month-over-month but doesn’t mention that almost all of that increase was due to an adjustment by Bureau of Labor Statistics based on the results of the 2010 census, plus smaller annual adjustments.

    From the BLS report:

    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.

    In other words, the participation rate (employment-population ratio) was reported to have dropped by 0.3%, exactly the amount of participation rate “drop” created by changing the population number used in the calculation (due to updated census data.) Without this once-a-decade adjustment, the change in participation rate would have been reported as…wait for it…zero.

    I don’t want to overstate the significance of Durden’s oversight, which conservative voices around the media and the web are also making, namely the idea that the participation rate dropped 0.3 percent and the labor force dropped more than 1.2 million in the past month. Those things are simply not true no matter how loudly people scream “conspiracy” and “propaganda.” (Having been trading financial markets for about 25 years, I’ve heard these same accusations about economic data being manipulated to help the incumbent president — whether Democrat or Republican — so many times, they just bore me now.)

    And while the actual participation rate might in fact be this new lower number, that would also mean that prior numbers were lower. In other words, the top-line change — caused almost entirely by using new census population numbers — is an artifact of the new census data, but few people have read to the end of the BLS report to get that important piece of information.

    Furthermore, there are cyclical reasons that the participation rate shouldn’t be as high now as it was a few years ago in a different part of the economic cycle, as economist Brian Wesbury (no liberal, he) explains.

    Look, I don’t like writing anything that is likely to benefit Barack Obama or his supporters. But the facts are the facts, and the claims of a big one-month drop in labor force and participation rate are simply wrong. If our side is going to call certain data “propaganda,” the least we can do is make sure we understand the data.

  71. russwinter says:

    Maybe the Gumnut has a different set of books, but if you look at the Daily Treasury Statement withholding taxes YoY for FY 2012 to date(Oct-now) compared to FY 2011, it looks far from an employment boom, nao combinam. It is 618.5 vs 616.7 YoY, corporate is 74.5 vs 68.9. Total is 726.6 vs 715.0 YoY. This is going to be way short of the revenue projection for FY 2012.


    BR: You are grossly oversimplifying the complexities of the revenue flow into federal tax factors.

  72. DeDude says:


    Do you think that the cut in pay-role taxes could have influenced those numbers?

  73. kenny powers says:

    Personally, I have no clue what to make of this.

    In any case, the S&P 500′s trend is now up on the charts. That’s no longer debatable.

    I’m long with the flow for now and leaving the data minutia to the dismal scientists.

    Happy trading,


  74. biscuits says:

    More mysterious adjustments this time than ever. Check out Jesse’s “The Non-Farm Payrolls Report: Air Brushing History – Nominal Work Force for Nominal GDP” and TrimTabs Biderman:

    Or just put on the blinders and pull out the pompoms. Pay no attention to the young men who can’t even score a McJob. They can live in their parents basements for the time being. Its all good! And here is one more take on the numbers. It pretty much all comes down to the participation rate. BLS is defining more and more Americans out of the labor force. How many more do we drop out to reach zero unemployment?:


  75. [...] week, I went into the details of the NFP report (See Tearing Apart January 2012 NFP data). There were 10 positive bullet points versus 5 negatives — and even those negatives were the [...]

  76. MikeDonnelly says:

    My noted changes above… A good deal of those benchmark changes were due to NAICS 2012, every 5 years the industry classifications get slightly revised and some of the level changes in the industries were due to this.

  77. [...] up the story early, getting it out to his big audience.  I did some retweeting, as did others.  Barry Ritholtz republished Silver Oz as well, and Calculated Risk also ran a strong piece. so honorable mention to those [...]

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