Today’s employment report is mediocre at best. But to understand that, you have to look past the headline numbers.
Those numbers say that the government’s survey of employers showed a gain of 130,000 private sector jobs, on a seasonally adjusted basis, in October. That seems to be better than in recent months.
I don’t believe it. Most of those jobs — 103,000 of them, before seasonal adjustment — were added by the statisticians, not reported by employers. (It should be noted that, before seasonal adjustment, there were 201,000 jobs added, so this is just more than half.)
...Of those 103,000 jobs, 14,000 were in the construction industry, and 25,000 were in finance. Does anyone believe that all those new companies are being created in those industries now?
...At times of inflection, these adjustments can be wildly off, as I argued a month ago. I think we hit such a point this spring. A couple of years from now, after all the adjustments are made, this year’s job performance will look far less impressive.
Over the last 12 months, the government’s current numbers indicate that the private sector added an average of 115,000 jobs a month. But 80 percent of those jobs came from the statistical adjustments.
It is also worth noting that the government’s other survey, of households, has not found those jobs. Over the last 12 months, it has found about 50,000 new jobs a month. In October, it found employment declined by 250,000 jobs...
Just another Reality-based bubble in the foam of the multiverse.
Friday, November 02, 2007
Lies, Damned Lies, and Job Statistics
From The New York Pravda, buried in the depths of the Business section, Floyd Norris: