Everything You Should Know About the Jobs Numbers

Townhall.com ^ | December 6, 2014 | Mike Shedlock

[Kaslin]

Initial Reaction

The payroll survey shows a net gain of 321,000 jobs vs. a Bloomberg consensus expectation of 230,000 jobs. September was revised up from 256,000 to 271,000. October was revised up from 214,000 to 243,000.

The unemployment rate was steady although employment only rose by 4,000 in the household survey. Unemployment actually rose by 115,000. Swings in household survey employment and the labor force have been wild lately.

Once again we are in a situation where the establishment survey and the household survey are at odds. Over time these fluctuations tend to smooth out. The question, as always, is "in which direction".

BLS Jobs Statistics at a Glance

• Nonfarm Payroll: +321,000 - Establishment Survey
• Employment: +4,000 - Household Survey
• Unemployment: +115,000 - Household Survey
• Involuntary Part-Time Work: -177,000 - Household Survey
• Voluntary Part-Time Work: +235,000 - Household Survey
• Baseline Unemployment Rate: +0.0 at 5.8% - Household Survey
• U-6 unemployment: -0.1 to 11.4% - Household Survey
• Civilian Non-institutional Population: +187,000
• Civilian Labor Force: +119,000 - Household Survey
• Not in Labor Force: +69,000 - Household Survey
• Participation Rate: +0.0 at 62.8 - Household Survey

November 2014 Employment Report

Please consider the Bureau of Labor Statistics (BLS) November 2014 Employment Report.

Total nonfarm payroll employment increased by 321,000 in November, and the unemployment rate was unchanged at 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains were widespread, led by growth in professional and business services, retail trade, health care, and manufacturing.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment January 2011 - November 2014



Nonfarm Employment Change from Previous Month by Job Type



Hours and Wages

Average weekly hours of all private employees rose by 0.1 hours to 34.6 hours. For three consecutive months I said the exact same thing. Twice in a row, a correction now put the previous month at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.4 hours.

Average hourly earnings of production and non-supervisory private workers rose $0.04 to $20.74. Average hourly earnings of production and non-supervisory private service-providing employees also rose $0.04 to $20.53.

For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

Birth Death Model

Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment



click on chart for sharper image

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 5.8%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 11.4%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

[subterfuge]

The Bureau of Labor Statistics has the Obama stench all over it.

[rktman]

#1. It’s a load of crap designed to fool the nolow constituents and doing a damn fine job of that?

[stephenjohnbanker]

Obam-bers : )

[george76]

Actual unemployment is 37.2%, ‘misery index’ worst in 40 years.

http://www.freerepublic.com/focus/f-news/3114041/posts

[Rockpile]

Why don’t we ever see the monthly numbers of :

How many people paid income tax

How many people paid Social Security taxes

[biff]

Because, it is more important we know how many people are on the non-farm payrolls that were born under the sign of Taurus, born in the afternoon hours, on a day the sun shone brightly, to rich white folks, that live in houses facing south, that had one cow for milking. Now, any more questions?

[AntiScumbag]

“monthly numbers of income taxes and SS”

Monthly? Who needs monthly?

That information is published DAILY by the Treasury Dept. It’s called the Daily Treasury Statement.

See: https://www.fms.treas.gov/dts/index.html

Page 7 has tax deposits and payments of all kinds:
Withheld Income and Employment Taxes
Individual Income Taxes
Railroad Retirement Taxes
Excise Taxes
Corporation Income Taxes
Federal Unemployment Taxes
Estate and Gift Taxes & Misc IRS Rcpts.

Cash Federal Tax Deposits:
Direct
Through Depositaries
Total Cash FTD’s
Inter-agency Transfers

Every single one of those numbers reflects an actual dollar balance. They are not subject to any adjustment or modification or smoothing or substitution — they are just actual numbers reflecting real transactions in any given 24 hour period.

Since they aren’t subject to any fiddling or game-playing, they’re the only fed numbers I pay any attention to or rely on.

For Sep-Oct-Nov, using withheld income and SS taxes only, year-over year withholding is running about +4%. Earlier in the year — Jan-Feb-Mar — it was running about +8% y-o-y.

Of the current roughly +4%, about 2% is for new jobs (total non-farm employment has been running about +2% y-o-y all year.) That leaves about +2% as increased withholding for existing “old” jobs. Assuming 2% inflation, that leaves essentially no net wage growth happening right now. Net wage growth was running about +5% early in the year and has slowed down steadily all year.

The upshot of all that is employment is growing slowly but steadily, and average wages are stagnant.

Despite the worst that President Chickenshit can throw at it, the U.S. economy is resilient enough to manage to grow slowly. Perhaps growth rates will improve a little next year with Republican control of the Senate. 2017 might finally see a return to consistent, solid 4%+ growth if jug-ears is replaced with any Republican.

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A general point on the article. Shedlock is mistaken when he says “all the people who dropped off the unemployment rolls because their unemployment benefits ran out” when talking about how unemployed people are counted.

Whether or not anyone is collecting a UI check has absolutely NOTHING to do with who is counted as unemployed. That number is determined solely by the Household Survey — you are either able to work and actively looking or you ain’t. UI doesn’t matter, period.

[Chode]

the numbers come from the federal government, THAT is all you need to know... to know it's bull$h!t

[NonValueAdded]

When are they going to crank in 5 million new job seekers?

[Kaslin]

Exactly