If it’s a jobs Friday, it must be time for some fact-free spin, probably from both sides. But the right seems to take things just a bit further than the left.
Catching my eye last week was Senator Ron Johnson, who was interviewed by Betty Liu on her In the Loop show.
Paraphrasing Johnson’s first two claims:
Nonfarm payroll growth should average between 200-300K coming out of a recession (we’ll settle on 250K for this exercise). This is at 0:32.
Though the Establishment Survey produced 163K jobs, one should look at the Household Survey, which has a “larger sample size” (0:47).
From trough to peak, the Bush Boom averaged a woeful 155K/month NFP jobs, obviously less if you subtract the government jobs he added which I discussed here. Further still, Bush averaged 250K NFP jobs/month for a rolling 12 month period exactly zero times. Bill Clinton, on the other hand, had 47 – no typo – such 12 month rolling periods.
On to point number two:
The Household Survey is “Monthly sample survey of approximately 60,000 households.” The Establishment Survey is a “Monthly sample survey of about 141,000 businesses and government agencies covering approximately 486,000 establishments.” Do we need to go any further to assess which has a larger sample size? Well, okay, why not:
Both surveys are subject to sampling error. The payroll survey has a much larger sample size than the household survey. The payroll survey’s active sample covers approximately 486,000 business establishments of all sizes representing about one-third of total nonfarm employment. The household survey is much smaller at 60,000 households, covering a very small fraction of total employed persons. Over-the-month changes in household survey employment are therefore subject to larger sampling error, about four times that of the payroll survey on a monthly basis.
Further: “An over-the-month employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 400,000.” Yet Senator Johnson focused on the -195,000 drop in the Household Survey, which BLS tells us is not statistically significant.
This concludes the July edition of Fact-Free NFP Fridays, which perhaps I’ll make a monthly feature.
Find me on the Twitter: @TBPInvictus
Category: Economy, Employment, Politics
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.
So much propaganda so little time.
The Bush recovery was precipitated by a relatively limited stock market decline, nor was the “loyal opposition” out to destroy Bush’s recovery.
The fiscal cliff shinanigans of Aug 2011 were the equivalent of voting down TARP in Oct 2008, which the “opposition” did not pursue.
Casual vs Coincidental you are discussing more Bull MArket and Bear Market Cycles than Presidents. The question being more aptly stated is in the predominate cyclwe did the Cheif Executive perform to the positve side or the negative side of the larger cycle trend? or were they just average. and were along for the ride. Did the accentuate the negative or the positive side of the overall trend?? Was the cycle a typical boom & bust of the economic cycle or a debt implosion cycle?? Was it a world class bubble?? These are caual in nature and the factors behind them much more complex than any President & possibly his term in office.
Your argument may mean that Bill was above average, Gerge was average and Obama is less than average. But the overall market cycle is what it is and can be traced back in history for a very long time. Whoever is the President of the United States of America is just along for the ride and will only be able to work within a range of this overall cycle. This is their true job performance. They do not per say cause cyclews to start nor do they end them. Politics can be a factor, but the economic eco system that determine cycles is very complex.
I was recently involved in a large scale theater production. Usually these folks are quite progressive in politics.During a break, the subject of the presidential race came up. I was shocked to hear Obama utterly trashed.
There is anger, some would argue, hate for the position of the country at this time. And the blame goes to the leader.
If a Dem can’t be spoken of in glowing terms within an arts colony, I suspect it may not speak well for his chances in November.
Imagine the Romney supporter listening to the speech in Vegas and seeing the market up 2% after NFP …and believing Romney that 160K jobs added is ‘Terrible for the American families.”
Conan,
“Your argument may mean that Bill was above average, Gerge was average and Obama is less than average.”
You’ve got the last two backwards.
There were more jobs created in the private-sector in 2010 than during all eight years of Chimpy Bush’s two terms, and there were more jobs created in the private-sector in 2011 than during all eight years of Chimpy Bush’s two terms.
“Whoever is the President of the United States of America is just along for the ride…”
If you believe that, you’re just not payin’ attention to the data. Just look at the three examples you just referenced.
Politicians saying stupid things is expected.
Is Invictus arguing that this has been a strong, or even moderate recovery in terms of jobs?
That would not be a smart argument.
Invictus: I’m struggling to see what in my post would possess you to make such an implication, and I’m at a loss.
Please refernce Doug Short’s Regression to trend: http://advisorperspectives.com/dshort/updates/Regression-to-Trend.php
Starting with Reagan and ending with Clinton you had a run up to from -55% below trend to a world record bubble of 155% above terend. This effects emplyment greatly.
Upon the collapse of this trend and the events of 9/11 we went from Gerge 155% over trend to about 10% over trend. Then we had the Real Estate bubble and it bounced back up. Obama went from about 80% over trend to slightly below 0%. Definately the rise was greater under Clinton. the fall harder under Bush. The trend to regress below the mean was established before Obama.
So as lower highs are made and low lows are achieved, this will continue until the cycle reaches it’s finish. The last Debt Implosion we had was the Depression, this cycle we have now has been seen by few that are living today, plus very few read history. This is a long way from being over. So before you say this is off topic, let me ask again, is the emplyment reflective of this cycle, or is our President of the United States the causal? Does the cycle affect the emplyement level? Most would consider employment number to be lagging, not leading indicators.
No Surprises in Payrolls or First Time Unemployment Claims Data- Both are Smack on Trend, Compensation Soars
The pundits and the market were surprised by Friday’s “stronger than expected” jobs data. We were not, but it was just dumb luck, as I explain at http://s.tt/1jXf9
Most interesting chart is the average weekly hours worked. Labor market is tightening.
“The increase in hours and earnings could be a sign that the labor market is tightening in spite of the huge numbers of people out of work. The issue may be that many of the unemployed do not possess the skills that are in demand in the market. Mortgage application takers and processors, and construction laborers generally do not make good computer game programmers. Economic pundits must face the fact that the 10 million fake jobs spawned by the bubble are not coming back. An 8.5% unemployment rate is “normal.” The bubble unemployment rate of 5.5% was abnormal.”
Wall Street Examiner http://s.tt/1jXf9
You are being rough on Senator Johnson. He is after all a politician. It should not be expected that he have even a rudimentary grasp of basic arithmetic or accounting, never mind complex statistical concepts such as sample sizes.
After all, these are the same people who believe that expenditures, such as the Iraq War, can be “off-budget”. I assume that he also believes that these off-budget expenditures can be paid for using Monopoly money or barter using McDonalds Happy Meal prizes.
I tried the “off-budget” thing with the IRS and the mortgage bank, but apparently they really do just look for cash.
Lee for every game programmer it takes 1000 laborers doing a days work to buy the game (& machine) and play it ~ otherwise its just another code routine
tExprn interesting that “go ahead make my day” ditched the Detroit scene so quick ~ then again maybe it was stricky show me the money bunk … are u ready for some allstar football ~ drinking foreign owned beer (sure we still make it) Saints & Cardinals
this SaintBill stuff ~ best VP for WalMart and the outsourcing crowd they all ever hired
agree the build housing & sell’em bubble was juicy frosting to get away with carry forward cash, the tax rebates and the shuffle’g for MIC terror war
we will see if NIMBY green green grass usa jobs works out or if we ruck it up … I agree we don’t need many dorks anymore … the balance has swung to & for the “eyes wide open” crowd .. meaning not enough jobs to go round and everyman for himself .. now is the time for all good men to come to the aid of their _party
Mr Friday – The President controls one aspect of Goverment Employment – The Executive Branch of the Federal Government & this number has been basically flat for some time.
Total Private sector jobs in 1992 was like 90 million and grew to 110 million under Bill durning the last phases of the big Tech Blow out. during Bush it fell to like 108 million and then grew to 115 million. So from here we get to like 107 million with Obama.
So you guys that are good at FRED tell me where I’m wrong and you can post the exact numbers. Using total employment cuts through a lot of the BS numbers and puts into clearer perspective either you have a job or not!. If any adjustment would be made it would be a leveler for the increase in population, i.e. an equal total number today is worse than the same number 9 or10 years ago due to population growth. So we are NOT better off today, by any means.
Lastly if you were paying attention to the actual changes, from the man of change himself. Please explain how he has differed his policy in practice from George in War or on Wall Street?? Are we prosecuting anyone of note for one of the greatist finacial crashes & Governemtn intravention since the Great Depression? Where is the laws and regulations to go after Bankers and get GS back again? Are we out of Iraq? What’s up with Guantanamo?? 4 years later we’re still there! Lot’s of Hyperboyle, but little substance. Even George passed the Medicare Act of 2003, which was his momnet in the sun to spend Billions on Health Care. So Obama’s llegacy in legislation for Health Care just went further down the road for even more socialisation or government control that was already well started down that path anyway.
You put way more faith than I that the average American President can really do anything to make big changes in a country the size of the Untied Sates of America. No Super Tanker can be turned on a dime, only it can be sunk or crashed quickly!
Maybe so but does the Household Survey adjust its numbers based on estimates (like the birth/death estimate used in the Establishment Survey)? If not, wouldn’t a smaller sample size with no estimated adjustments be preferable to a larger one that uses estimate adjustments? My understanding is that the Establishment Survey typically reduces the jobs count in July via the “birth/death” adjustment whereas this year it added 58,000. That may be legitimate or it may not. I found myself wondering how the number of jobs increased while the number seeking work decreased yet the unemployment rate went up (slightly). That would not seem to add up. Perhaps that is a function of the jobs “conjured” up by the birth/death adjustment???
To say a sample is statistically significant without further detail is misleading, you need to know the pre-specified level of precision as well as the expected confidence level. Presumably the statistical confidence for the sample only applies to the raw number, the estimates of the seasonal adjustments and birth-death adjustments are another kettle of fish. As Zero-Hedge and others have pointed out, when the sum of the adjustments is several times greater than the headline number, the validity of that number is questionable.
Conan,
You’re gonna have to explain what any of that has to do with the price of eggs in Singapore.