Posted on 03/04/2011 9:52:04 AM PST by FromLori
Pretty much precisely what noted earlier today: "A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour."
PAYROLL REVIEW – NICE JOB, SHAME ABOUT THE PAYCHEQUE, from Gluskin Sheff
The widespread reaction to the jobs report today is uniformly positive. I think a dose of reality is really needed here. It may as well come from this pen. The headline print of +192k was in line with published estimates but following the slate of ISMs and the ADP report, the “whispered” number was closer to +250k. Of course, there were the upward revisions to the back-data that showed net gains of +58k so one could easily respond that adjusted for these, the topline did indeed meet these “whispered” estimates. The employment diffusion index jumped to a 13-year high of 68.2% from 60.1% in January, but beware of peaks and troughs in this index (i.e. it would have been a mistake to extrapolate the 17% low in this job dispersion measure at the March 2009 market trough).
Here is what I think is important: because of the winter storms, we really have to average out the past two months. So the January-February average for payrolls is +128k. Allowing for a similar reading in March that we received in February would generate an average increase for the first quarter of around 150k. That is little changed from what employment gains averaged on a monthly basis in the fourth quarter. So while we are seeing positive job growth, it is not accelerating even though we are coming off the most intense impact of the fiscal and monetary easing that was unveiled late last year. In other words, we are disappointed with what is still a lacklustre trend in net job creation, particularly in view of the peak stimulus we are currently experiencing.
What if Q1 is the peak for job growth? If you remember, we ended up with sub-3% GDP growth in the fourth quarter, which is about half of what we should be seeing at this stage of the cycle. And if we are generating jobs at a similar rate in the current quarter, barring a re-acceleration in productivity, growth again will be below 3% at a time when the consensus is closer to 3.5%. But more to the point — what if this represents the peak for the year? Because if there is one thing we do know, it is that this quarter contains all the incremental policy easing impact on the macro data.
What was particularly discouraging was the fact that both the wage number and the workweek were flat. Nominal wages, in fact, have been stagnant in three of the past four months. Weekly average earnings have also been flat or negative in three of the past four months. How on earth can these statistics possibly be viewed as bullish for the economy? The year-over-year-trend in average weekly earnings in the past three months has softened from 2.6% to 2.5% to 2.3% today. At the same time, it is probably reasonable to assume that surging food and fuel costs will bring headline inflation to, and possibly through, 3% in coming months. In other words, the growing risk of falling personal income in real terms, even with the positive growth in payrolls, is a glaring yellow light as far as the consumer spending outlook is concerned.
Aggregate hours worked only managed to tick up 0.2% in February after a flat January. That is total labour input — bodies and hours. So assuming a trend-like productivity performance, we are talking yet again about sub-3% GDP growth, which by itself is okay but considering the peak impact of all the fiscal and monetary steroids being administered this quarter, it is actually disappointing.
Yes, the unemployment rate dipped again to a 22-month low of 8.9% from 9.0% in January and the nearby high of 9.8% in November. This reflected a 250k risein Household employment — the third increase in a row — and a flat participation rate. A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour.
All that matters in these employment reports is what the jobs environment means for income, because workers generally spend in the real economy. With credit harder to come by, and with fiscal policy soon to become more focussed on austerity, it is the income that the labour delivers that will prove to be the critical determinant of the economic outlook. So while the “spin” may be over near-200k headline payroll gains, another dip in the headline unemployment rate, the organic income backdrop can really only be described as tentative, at best, especially in real terms as gasoline prices make their way to $4 a gallon by the time Memorial Day rolls around.
Why don’t they simply report how many are employed?
Because it would show how many people are actually getting welfare and not working as opposed to unempoyed and recieving unemployment benefits?
Does he not understand its 8.9%? the goverment says so, so it must be true, Right????
Sarc Alert!!!!
I have become so tired of the Feds falsifying reports to suit a political agenda. I wonder if Congress would find it in their black hearts to pass a Law making lying to the American Public regarding national statistics a Federal offense.
It seems whether it is the Dummie Mayor of Phoenix scamming taxpayer money to Labor Dept, lying has become a national epidemic. And frankly I am tired of it.
"The truth is a beautiful and terrible thing, and should therefore be treated with great caution." ~ Albus Dumbledore
Frankly I’m sick of Top Quarks personal attacks and I believe it is against the rules of Free Republic. Please address this poster enough is enough.
Polly want a cracker?
| Measure | Not seasonally adjusted | Seasonally adjusted | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Feb. 2010 |
Jan. 2011 |
Feb. 2011 |
Feb. 2010 |
Oct. 2010 |
Nov. 2010 |
Dec. 2010 |
Jan. 2011 |
Feb. 2011 |
|
|
U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force |
6.0 | 5.6 | 5.6 | 5.8 | 5.7 | 5.7 | 5.6 | 5.5 | 5.3 |
|
U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force |
7.0 | 6.2 | 6.0 | 6.2 | 5.9 | 6.2 | 5.8 | 5.6 | 5.4 |
|
U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate) |
10.4 | 9.8 | 9.5 | 9.7 | 9.7 | 9.8 | 9.4 | 9.0 | 8.9 |
|
U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers |
11.1 | 10.4 | 10.1 | 10.4 | 10.4 | 10.5 | 10.2 | 9.6 | 9.5 |
|
U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force |
11.9 | 11.4 | 11.1 | 11.1 | 11.2 | 11.2 | 10.9 | 10.7 | 10.5 |
|
U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force |
17.9 | 17.3 | 16.7 | 16.8 | 17.0 | 17.0 | 16.7 | 16.1 | 15.9 |
|
NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule. Updated population controls are introduced annually with the release of January data. |
|||||||||
bttt
Can you tell me what indicates that these reports are a lie?
I can envision Bennie Bernake standing on the deck of the Titanic with his ankles deep in sea water saying, “the economy is improving, there is no inflation. The economy is improving, there is no inflation”.
Here is what you coud've fond even in Wikipedia:
"alternate measures of unemployment, U1 through U6, that measure different aspects of unemployment:[72]
U1: Percentage of labour force unemployed 15 weeks or longer.
U2: Percentage of labour force who lost jobs or completed temporary work.
U3: Official unemployment rate per the ILO definition occurs when people are without jobs and they have actively looked for work within the past four weeks.[2]
U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
U6: U5 + Part time workers who want to work full time, but cannot due to economic reasons (underemployment)."
You can continue now with your sarcasm.
You’ve founded these statistics. So have they or have they not been published?
The fed is using the exact same standard for calculating unemployment now as it did then. During Bush’s recession it was the libs claiming that true unemployment was higher and that his administration was deceiving the public. Everyone likes the agreed upon measure while it is saying the things that they want it to say. They start complaining when it doesn’t support their message.
As posters above said, we could measure workforce participation instead of claimed unemployment, but that isn’t all that useful. Average age in this country is rising steadily, so it should be no surprise to anyone that lower percentages are working even if there wasn’t a recession. The trick is figuring out which is which. Simply asking if people want to work is not the answer either. Ask someone on welfare or extended unemployment if they are looking for work. Of course they will say yes; saying no might jeopardize their government handout!
I said fed by mistake. Not the fed, it is the bureau of labor statistics.
If you have evidence that he misrepresents the data, let's hear it (and please do report that to the FBI).
Would be nice if arm-chair generals would show at least understanding what Bernanke's job is and what he says.
But don't get distracted from Fed-bashing. Defamation has become a norm, even among "conservatives." Enjoy; you have strength in numbers.
They are published by the BLS every time they publish the unemployment rate. It just ruins all the conspiracy theories if you say that.
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