Why Yesterday's Jobs Numbers Don't Signify 'Gaining Steam' or a 'Surge'
The headline New York Times (HT Clay Waters at NewsBusters) after yesterday's job report was: "U.S. Economy Gains Steam as 200,000 Jobs Are Added." At the Associated Press: "Nation adds 200,000 jobs in December hiring surge."
Telling millions of news consumers that it's so doesn't make it so.
For total nonfarm and the private sector, the following graphic shows the raw (i.e., not seasonally adjusted) and seasonally adjusted results for the final three months of the past 11 years:
Overall (red boxes at left), raw results in December 2004 and 2005 which were equivalent to what we saw yesterday led to seasonally adjusted results 68,000 and 42,000 below yesterday's seasonally adjusted result. Yesterday's raw result, if achieved in either of these years, would have led to a seasonally adjusted result of about 140,000 -- 60,000 less than reported.
In the private sector (blue boxes at right), the raw result in December 2005 of 94,000 jobs lost was only 14,000 jobs worse than the -80,000 reported for December 2011, yet yesterday's seasonally adjusted result was 74,000 jobs higher (212K vs. 138K). What's more, the nearly breakeven raw result in December 2006 (only 6,000 jobs lost) led to 37,000 fewer job additions after seasonal adjustment than yesterday (175K vs. 212K).
As I wrote yesterday at my home blog: "... the irregularities of the past 3-1/2 years render normal concepts of seasonality almost useless." That's pretty obvious, based on the analysis just conducted.
In her story, the Times's Shaila Dewan failed to even mention that the reported positive numbers were seasonally adjusted. At the AP, Paul Wiseman and Christopher Rugaber got to it in their 26th of 38 paragraphs, and then only cryptically: "Economists cautioned that some of the month's gains reflected temporary hiring for the holiday season. The government adjusts the figures to try to account for that seasonal factor, but doesn't always get it exactly right." No kidding.
The raw numbers show that the job market, in the context of the high unemployment rate and labor underutilization, is at best sluggishly improving. It is definitely not in a "surge," or "gaining steam."
Cross-posted at BizzyBlog.com.
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Comments
The December hiring surge
Submitted by dreamsincolor on Sat, 01/07/2012 - 11:52am.
WAS seasonal -- Right? So why all the noise about it, isn't/wasn't it expected?
Though there may have been more hires in retail ...
Submitted by Tom Blumer on Sat, 01/07/2012 - 12:22pm.
There was NOT an overall hiring surge on the ground, unless negative results like -219K overall and -80 private sector can now be called "surges."
Seasonal adjustments are supported to take seasonal hiring increases in certain sectors like those for the Christmas season in retail into account. So unless those increases were somehow shown to be larger than normal, you are absolutely correct that it was all expected (i.e., supposedly built into the calculations.
But as I pointed out, the awful economy of the past 3-1/2 years has led to seasonally adjusted calculations, though technically done correctly, that aren't meaningful. Yet the press treats them as gospel and could care less about the raw numbers (though there was some press grumbling some months ago when the seasonalizing led to results that made things worse than they really were).
LSM Meadia really pumping and selling that yesterday
Submitted by MaximusBraveheart on Sat, 01/07/2012 - 3:08pm.
They were drinking deep the mead pumping that report with great spin and excitement in there voice. And "lowest" unemployment in 3 years they say. The spin never ends. So let's see what happens on next months job report; any seasonal work going to be gone?
-- Maximusbraveheart -- Is TRUTH knowable? Moral Relativism is the abandonment of Truth. Truth is knowable. Truth conforms to Reality. Reality is observable by evidence & witness in this day & from history. Relativism is Sesame Street play land.
Just trying to prop up...
Submitted by P. Aaron on Sat, 01/07/2012 - 11:58am.
...the big O and those $trillion$ of pump priming that's largely failed.
That, and the fact that all of the reported jobs
Submitted by bkeyser on Sat, 01/07/2012 - 12:15pm.
are in the service sector. Low-paying, part-time, for the most part. This recession has turned 5 million middle-income and 3 million lower-income jobs into 1.4 million low-paying part-time jobs. And we're suppsed to be jumping for joy.
Reminds me of the famous Bill Cosby standup: "And I was thankful to get it!" (Relevant part 1:10 - 2:20)
I know that it will not be
Submitted by ricklail on Sat, 01/07/2012 - 12:45pm.
I know that it will not be 200,000 jobs lost but what will happen when Sears and KMart starts closing the underperforming stores along with the seasonal losses? Will they honestly report that?
Maybe Rick
Submitted by bkeyser on Sat, 01/07/2012 - 12:48pm.
but if they do, they'll blame it on Wal-Mart; that's for sure.
So That's how .....
Submitted by tvhall on Sun, 01/08/2012 - 12:58am.
The people on MSNBC got so raving mad. (Glad I quit when I only had a few ticks!)
Of course
Submitted by spepper on Sat, 01/07/2012 - 12:30pm.
...it was a only a "seasonal" slight uptick in jobs creation. Once the businesses get their tax forms completed and see the final balance they owe compared to previous years, the emergency brakes will be locked and any thought of new hires thrown right out the window. The current occupant will continue to be dogged by lackluster jobs numbers-- but his lack (or refusal) of understanding how private-sector permanent jobs are created in the first place is not nearly is worst offense-- his complete mismanagement of the administration such as the Department of Justice for one, is WAY worse-- causing a complete lack of confidence at the state and local levels that laws are not being enforced at the federal level, and being targeted at specific individuals or groups for political gain only, which creates an environment of complete mistrust, leading to businesses to seek elsewhere (i.e. overseas) for more stable conditions in which to operate.
Would you believe.........
Submitted by Tomorama on Sat, 01/07/2012 - 12:36pm.
Tom, I believe it was NB that posted before the media's "bleatings of doom and gloom" when Boooooooosh was actually experiencing consistent growth of 350-450 thousand jobs and the "mouthpieces" were going out of their way to find SOMETHING, ANYTHING dammit that was negative.
This would be a good time to revist Brokenjaw, and Petty Couric and Bri-Bri and their tight jaw clenching hatred for good news.
Hamburger Flippers
Submitted by Kingfish17 on Sat, 01/07/2012 - 1:46pm.
The favorite phrase of the MSM for any jobs created from Jan 2001 until December of 2008 was "Hamburger Flipper" jobs. I will grant, that the housing bubble that burst in 2007-2008 helped in the job creation category, but it's gotten to the point where it's hard to believe the numbers coming out of Washington DC anymore, and this process of disbelief didn't start in 2009 when Obama was sworn into office.
What I can believe, is my own two eyes when I'm driving around town and visiting other areas of the country. For most of Bush's term, "Help Wanted" signs were prolific. I even saw help wanted signs plastered on sides of trucks. When my wife and I would go to Las Vegas, the restaurant lines were super long because the restaurants couldn't hire waiters and waitresses fast enough to service the customers. Anybody could get a job almost anywhere. And the jobs available were not just entry level jobs, either. The United States actually had what I call "Negative Employment", meaning where we had more jobs available then the number of people in the labor pool to fill those jobs. That's why it was easy for a never ending stream of illegal immigrants to enter the country and get a decent paying job.
Now, help wanted signs are few and far between. They only place in the country where they seem to have negative employment is in Washington DC, and maybe some new areas of petroleum or natural gas exploration and development that the feds haven't figured out how to shut down............yet.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Even if the economy is improving, doesnt credit go to 2010
Submitted by merly1 on Sat, 01/07/2012 - 12:40pm.
election winners? That's the media logic that escapes me = the GOP pounded the Dems in
2010 on both national and state level. If the economy is improving, isnt the storyline that
voters made the "right" choice in 2010 so perhaps 2012 should continue that vote. Anybody?
Uncertainty
Submitted by Kingfish17 on Sat, 01/07/2012 - 1:49pm.
Private sector job creation didn't recover after the last recession because of the uncertainty factor created by governments, both federal and local. The 2010 elections helped stem the tide of layoffs, but businesses can't plan ahead when the federal government can't seem to function regarding tax policy and other regulatory burdens that hang over the heads of businesses, whether real or perceived as a good possibility.
"You can’t go take a trip to Las Vegas...on the taxpayer’s dime." Barack Obama
Excellent point!
Submitted by robert108 on Sat, 01/07/2012 - 2:26pm.
Excellent point!
Obama became President at the perfect time
Submitted by povertypimpin on Sat, 01/07/2012 - 12:44pm.
The trough of the business cycle is the best time to become President. Economies reflexively snap back after a deep recession so doing nothing as President will result in modest GDP growth and jobs creation. If you have good policies then you can get a million jobs created in a single month and have 7% GDP growth in a single year like Reagan did. What is remarkable about Reagan is there was high inflation and Democrats controlled Congress so there was no quantitative easing or trillion dollar deficit spending to artificially pump the economy in the short run. Obama's policies have made things worse. Massive monetary and fiscal stimulus has masked how bad his policies really are.
Bwahahahahahahah
Submitted by donabernathy on Sat, 01/07/2012 - 12:56pm.
Now ya know how the soviet people felt when they read Pravda and watched State TV.
Some Laughed but most hit the Vodka Bottle to numb the pain.
roflmao
It could still spell trouble for the GOP
Submitted by shawn. on Sat, 01/07/2012 - 12:57pm.
This is hardly a surge but the economy could be coming back. If we start getting an "actual" job surge this could add to Obama's improving poll numbers
Beating the President next election looked almost certain two months ago, but I think whoever the nominee is will be in for a hell of a fight.
Economy Surging???
Submitted by NVRAT on Sat, 01/07/2012 - 1:20pm.
What a hopeful outlook for the Obama Administration. Well, I sorry to say the holidays are over and we have heard the Guppies in DC say the same thing for the last 3 1/2years and what do we find out in Feb through Oct same thing, unemployment numbers rise, rise, rise again. How much longer will we have to listen to the pecker suckers in the Obama administration and MSM babble on about the same thing? everyone knows that the stats given out by the current administration are doctored to make the outlook look rosy. I hope that in 2012 /13 things will change and people wise up, even the low income and, realize that the middle class is dwindling at a faster rate than was expected . Without the upper class the middle class will not prosper and, with out the middle class the lower class will go on food stamps and be destitute. It does not take a rocket scientist to figure that out.
"revised..", then "unexpectedly..."
Submitted by wizardjr on Sat, 01/07/2012 - 2:02pm.
I can't wait until the report on January and the revised December numbers come out.
BTW... the U6 numbers are still over 15% unemployment. There does appear to be a small positive movement, but it's the difference between slightly dead and completely dead IMHO.
Another thing... I seem to see more and more people becoming aware that the U3 numbers are pure BS. That's a hopeful sign. Much like the Consumer Price Index, all the reported numbers for public consumption are just complete nonsense because so much that is important to the title of the numbers is missing or bent. *sigh*
Things are flatlining as more and more debt continues to expand.
Submitted by upcountrywater on Sat, 01/07/2012 - 2:21pm.
Oh look more credit card checks in the mail.
Where will the feds be in November of 2012, 17 Trillion...
This is NOT the way to bring back the economy. Bring back the OIL GLUT (two lovely words strung together eh)......
My fellow Americans:
With summer coming, a lot of Americans will be driving more than ever, going on "See America First" vacations and driving everywhere from New Jersey to California in everything from vans to buses to motorbikes. This is a good time for it because gas prices continue to fall. In fact, they are falling as never before. The oil price decline of the 1980's has been a triumph not of government, but of the free market; and not of political leaders, but of freedom itself.
When I first came into office in January of 1981, the price of gas was just about $1.25 a gallon. The price of a barrel of oil had reached $36. Americans were understandably frustrated and angry as they cast about for answers. Some people advocated more governmental intervention. Demands for divestitures of oil companies filled the air. Other people demanded gas rationing. Well, we said no. I didn't want to force more limits on people through rationing. I wanted to ease the situation by letting freedom solve the problem through the magic of the marketplace.
American runs on oil, not on DEBT. Open the pipeline NOW...
You Didn't Build That.
We could be isolationist.... and enjoy it.
Submitted by wizardjr on Sat, 01/07/2012 - 2:47pm.
North America (Canada, Mexico, and the US) have a combined energy source of more than 1,000 years. That includes gas, oil, methane (ices), coal, and uranium.
With today's and tomorrow's technical abilities we could within a decade wean ourselves completely off of imports from anywhere else and have lower prices per watthour than we did a decade ago.
Personally I'd lovet to shove dirty nukes down every well in the Middle East and light them off.
Nuks?R They are all duds? Low maintenance last test in 92 or so.
Submitted by upcountrywater on Sat, 01/07/2012 - 4:28pm.
More of this, iran train blows up
And some of this...
Good thing the iran press is as bad as our MSM
Stealth cruse missiles is the ticket. Pretty easy to miss the Russian puny power plant and Chinese oil refinery. is iran still importing gasoline?
RIP you bunch of Russian N' N Korean science guys.
Bang for the buck: Pipelines and Power lines. Send in another missile a day later when the crew is out there fixin it. Job creation! more ads for for power line repair equipment and the unfortunate folk that once worked there.
War porn, uncut que to :40 if you are in a hurry
You Didn't Build That.
Any increase is good,
Submitted by Bob K on Sat, 01/07/2012 - 2:48pm.
but how many of those jobs were Holiday seasonal ones that are now gone?
that's what 'seasonally adjusted' is supposed to smooth out
Submitted by wizardjr on Sat, 01/07/2012 - 2:50pm.
Once again though, the same folks who brought you magic temperature numbers to "prove" AGW are now bringing you unemployement/employement numbers to "prove" that the stimulous worked and that we're recovering from the "Booooosh disaster".
NYT lied? Well who'd-a thunk it?
Submitted by Slyrr on Sat, 01/07/2012 - 3:34pm.
The whole point of the NYT is to lie for their boss - Obama - the man who signs their paychecks and who keeps this failed newspaper afloat by stealing our tax money. Without Obama's illegal patronage, the NYT is dead - toast - finished. So of course they're going to lie for him. But even without Obama as their financial lifeline, they agree with his communist ideology so much that they'd lie for him even without him paying their bills.
They lied during the Bush years to trick people into thinking like they were in a recession when they weren't. Remember how the liberal media screamed and frothed that Bush's first term was 'the worst economy since the great depression'? Yet they say this economy is cat's meow? But their lie failed because times were good. Then they raged that Bush's first term was a 'jobless economy', until unemployment fell to around 4%. Then the liberal media screeched that 'well OK, maybe there ARE jobs, but they're jobs nobody wants!'
They were never satisfied - until a liberal was elected. Then they turned on a dime, and all the things they claimed were signs of 'the worst economy since the great depression' were suddenly things they wanted to brag about.
Sorry libs. Obama has put millions of people out of work. And they'll remember who it was who robbed them of their livelihood. The writer of this article is quite right. Just because Obama, liberals and Democrat media SAY that the millions of people they've ruined don't exist anymore doesn't make it true. They still exist. They can still remember. And they can still vote.
Today's Demorats: Lie - Inveigle - Obfuscate.
Remember when?
Submitted by sherlock1 on Sat, 01/07/2012 - 4:23pm.
Remember when Bush was President, and a reduction of X jobs in the size of job GROWTH was reported as "Employers handed out X more pink slips last month!"?
Anyone else suspect that if we were to compare the magnitude and direction of revisions to economic indicators today with those of only 5 years ago, today's would be consistently larger and consistently more toward a less positive value?
The American media is corrupt and worthless. If these numbers are ever revised afterwards toward showing less job creation than the ObaMedia is currently trumpeting, we will never see it reported unless it is in foreign media.