Employers in the U.S. added a smaller- than-forecast 111,000 workers to payrolls in January and the unemployment rate rose, evidence of an economy growing at the moderate pace predicted by the Federal Reserve.
The gain in employment followed a 206,000 rise in December that was larger than previously estimated, the Labor Department reported today in Washington. The jobless rate rose to 4.6 percent, the first increase in three months.
Here is the report from the BLS:
First -- note that BLS ONCE AGAIN has raised the originally reported numbers. For God's sake, people, can we get some good timely data? PLEASE
I have a big problem with this report (what else is new?). The report says construction jobs increased 22,000. At the same time, the weekly unemployment reports from the last few months have shown several states with over 1,000 lay-offs in construction (Florida, Minnesota and California were on these lists if memory serves). These two numbers simply don't jibe together.
Manufacturing lost 16,000 jobs. Professional services gained 25,000 and education/health increased 31,000. Leisure and hospitality gained 23,000.
OK, so this is a smaller than expected gain in overall employment. BUT ...
With today's report, the Labor Department officially revised the payroll numbers after reviewing more complete tax data not available earlier from state unemployment insurance programs and making adjustments to its estimates of seasonal hiring patterns.
The revision added 754,000 jobs to the previously estimate for the year ended March 2006, the biggest revision since Labor started adjusting the numbers in 1991.
This is the second time in the last two years we have seen some really big adjustments to the labor report. One of the reasons I have personally been bearish over the last two years is the as reported weak job gains. However, that job weakness was not at the level reported. In fact, the size of the revisions makes that prediction unwarranted. Will someone at the BLS kindly get their act together so the information we use is actually good information?
In addition, the size of these revisions is making the monthly release practically meaningless. And this is a really important number to be made meaningless, people.
6 comments:
Pleas don't accuse me of putting on a tinfoil hat here but such a large discrepancy begs the question could there be some book cooking going on here?
Bonddad:
I'm with Juan Vasquez on this one, tinfoil hat or not.
Given this administration's track record of lying about virtually every major policy issue, and specifically of putting pressure on government employees to suppress unpleasant information and exaggerate or outright fabricate positive news, I think it's crazy to automatically trust any figures coming out of the BLS or Commerce. So a quarter of a million jobs magically appeared in 2006 that they somehow didn't manage to identify before? I'll believe that when it's been confirmed by knowledgeable people outside the influence of this administration.
— bluestatedon
No tinfoil hat required.
Statistics are not my strong suit. However, there are economists who convincingly argue the US deliberately understates CPI data to cut back of CPI related SS payments.
Doesn't the underreporting of the CPI and this apparent inability of the BLS to track new job creation allow the Fed to keep interest rates lower than they otherwise should to juice the economy illegitimately? It's like allowing a heroin addict to keep taking their self-medication because it's just tap water, or so they've been told, when it's the good stuff. Kicking the can down the road ultimately winds up with somebody having to do something with the can. I've seen this "strategy" used in businesses and the end result is never pretty.
There is every reason to update the basis for this kind of information on an ongoing basis ... but no justification for not releasing a parallel number under the old definition to permit valid comparisons to be made over time.
So its not the existence of the change at the BLS that is suspicious ... but if the historical definition value is not maintained for a reasonable period, such a five years, that is suspicious.
On whether this "allows" the BLS to keep interest rates lower than they otherwise should ... there isn't any explicit inflation target in the US. If the Fed wished to adopt a more aggresive policy focusing on growth of productive capacity rather than jumping at every faded ghost of a slight hint of accelerating inflation, they could simply do so ... they would not have to rig numbers to do so.
And even more to the point ... when national income accounting is politicized, it is far more often the executive branch doing it. Think of the famous example of the more than 10 "technical" corrections of the definition of the unemployment rate under Maggie Thatcher, where (oddly enough) every single one resulted in a downard revision of the unemployment number.
One final thought on the revision to the number of new jobs supposedly created. Nobody adjusted the total income generated from those jobs, because that number is pretty well known. That would imply that the average wage paid by the new jobs being created was falling even faster than the administration was originally letting on. Dubya and the posse don't understand that the unease afflicting the population stems from the need to hold two of the "new" jobs in order to produce an income even close to approximating the jobs being lost. He can't understand why someone working the equivalent of two full-time jobs with the commute between them also sucking time out of a busy day would have a sour outlook on the world. That's what comes from having been born with a silver boot up your ass.
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