NFP +166k
I have to jump, but here's the official release:
"Nonfarm payroll employment rose by 166,000 in October, and the unemployment rate was unchanged at 4.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job gains occurred in professional and business services, health care, and leisure and hospitality. Manufacturing employment continued to decline, and construction employment was little changed.
Unemployment (Household Survey Data): The number of unemployed persons, at 7.2 million, was essentially unchanged in October, and the unemployment rate held at 4.7 percent. A year earlier, the number of unemployed persons was 6.7 million, and the jobless rate was 4.4 percent.
The Household Survey a/k/a Current Population Survey (CPS) -- which I find much less reliable than the Establishment Survey a/k/a Current Employment Statistics (CES) -- showed a loss of 250,000 jobs, and a decrease in the Civilian labor force of 211k.
Birth Death adjustment was 103k -- its comparable to October 2006, but still disproportionate to actual job creation. B/D gains of 25k in Financial and 14k in Construction make the entire data series suspect.
~~~
I'll take these apart in a little while eventually, but I heard all I needed to know when I read "Employment in financial activities was essentially unchanged in October . . ."
Sources:
Employment Situation Summary
OCTOBER 2007
http://www.bls.gov/news.release/empsit.nr0.htm
CES Net Birth/Death Model
OCTOBER 2007
http://www.bls.gov/web/cesbd.htm
Friday, November 02, 2007 | 08:57 AM | Permalink
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Does anyone believe these numbers anymore?
Bonds don't as the ten year is at 4.38%
Posted by: Lyon | Nov 2, 2007 9:06:03 AM
http://blogs.wsj.com/economics/2007/11/01/kroszner-to-senate-still-working-on-it/#comments
Randall Kroszner, whose term as a Fed governor is set to expire Jan 31, has been nominated for a full 14-year term by President Bush. But the nomination — and that of two newcomers, Capital One Financial Corp. executive Larry Klane and TowneBank executive Elizabeth Duke, are stuck at the Senate Banking Committee.
Wow! do these people have the qualifications to be Fed governors. Krozner is bad enough. Bush is replacing the an entire cadre of high powered academics who have traditionally run the Fed with cronies. This issue should be given more publicity. One is a president of a small town bank in VA. She has a BA in fine arts. Highest qualification both have is an MBA. These are the people who are going to run monetary policy? Unreal. I would sell the dollar just on this. Start writing your senators, people.
Posted by: zao | Nov 2, 2007 9:09:44 AM
You mean you haven't been fired.
Posted by: Old Ari | Nov 2, 2007 9:10:04 AM
Bush would appoint unqualified cronies? Un. Be. Lieveable.
Posted by: Marcus Aurelius | Nov 2, 2007 9:17:35 AM
Temp workers were up 20,000 and the y/y number looks good for this industry (see chart on my link if you want)
Wages were down this month, and last month were revised down as well.
Posted by: Michael Donnelly | Nov 2, 2007 9:24:17 AM
Ah, how utterly predictable. Good non-farm payroll numbers, and yet again "the numbers are false/fake/manipulated/unbelievable." The same response that has been published after every piece of good economic news for the last five years.
Meanwhile, yesterday may have represented the best buying opportunity since mid-August. I was buying yesterday.
Posted by: Nova Law | Nov 2, 2007 9:29:10 AM
Re: "service jobs"
Except in esoteric "goodwill" terms, aren't people a long term liability? I'm not sure I've ever seen a balance sheet that quantified employees as "assets".
Since a firm can't "own" people, are they "leased"? It seems the Unions think so, since they try to create and enforce contracts based on terms of service.
Next step: bonds and derivatives based on employment contracts.
Dialing Goldman...
Posted by: mack macdaniel | Nov 2, 2007 9:31:01 AM
Good luck with that
buy those dips.....those institutions need all the "soft landing" they can muster.
Ciao
MS
Posted by: michael schumacher | Nov 2, 2007 9:53:14 AM
22% of the job creation took place in the booming "Food Service and Drinking Places" industry. I guess Google added some more cafeteria staff.
As an uncle of two recent college graduates that are working full-time at TGI Friday's, I can support the validity of this data :)
Oh, and temp staffing kicked in another 12% of the payroll gain. If this release was a company's quarterly earnings you might say "the quality of the outperformance was suspect".
Posted by: Brian | Nov 2, 2007 10:13:46 AM
"I was buying yesterday."
Well then I guess you're losing your a** this morning then!
Posted by: Pool Shark | Nov 2, 2007 10:16:26 AM
Barry I must compliment you on the amount of research and work you put into your blog. FIRST CLASS!
Posted by: John | Nov 2, 2007 10:19:01 AM
Nova, I don´t think Barry wants bad job numbers. Speaking for myself though, I just want the truth, and if those numbers are true then I wouldn't exactly be buying, but I wouldn't short either. The fact that it is so easy to see that they are not, leaves people with only two choices, either blindly go along (your case), or risk playing the truth.
Posted by: RichardN | Nov 2, 2007 10:30:35 AM
Nova Law:
In this up is down world, what is your belief as to why the Fed cut rates twice?
Is there something other than a recession that the Fed is scared of that would lead them to cut rates, given the reported strength of the economy?
Do you think they should cut again?
Why did the market drop so precipitously yesterday (the day after the cut)?
Posted by: Neal | Nov 2, 2007 10:39:18 AM
"Total employment, at 146.0 million, was about unchanged in October." --That was from the report. Doesn't this mean that there really wasn't any jobs created or am I just reading it wrong?
Posted by: Costa | Nov 2, 2007 10:40:51 AM
Seriously, who -really- wants the economy to falter? I think it's been shown time and time again that the released numbers are often strained through a filter of creative accounting to paint rosier pictures than reality.
The government may think this is a good thing to keep a positive psychology going. Unfortunately, sometimes it doesn't reflect reality, and leads to credibility issues in future numbers released, as well as making people unprepared for what's actually going on and what's going to happen in the future.
Posted by: Richard Glurrrrrrrrrrr | Nov 2, 2007 10:43:12 AM
But Goldman would'nt do that.......would it?
http://online.wsj.com/article/SB119396956371280131.html?mod=yahoo_hs&ru=yahoo
Yes the economy is just fine when a major institution has to basically sell watches from the back of a van while they think no one is looking.
So what happens when something really goes wrong-LOL
Ciao
MS
Posted by: michael schumacher | Nov 2, 2007 11:27:20 AM
yes! Are these NFP numbers not glorious komrade Law?!!
Now excuse me, i must rush out to purchase a Bag to Hold all of my winnings in!!!!!!!!!
oh, and "shame on the treasonous doubters, Ritholtz and Schumacher!!"
Posted by: brion | Nov 2, 2007 11:30:49 AM
Costa,
The number you refer to (146MM) is from the household survey. The headline NFP job growth number comes from the (larger) survey of employers. Both have "issues", which have been covered at length in previous posts.
Neither is likely to give a real-time read on a trend change. Eventually, the NFP numbers will be reconciled to state tax records and give a pretty accurate reading. Looking back at (often significantly) revised data will appear to fit the facts, but the data as initially released is likely misleading.
Posted by: Estragon | Nov 2, 2007 11:37:22 AM
hummm? Wage growth constrained while oil at record, consumer balance sheets stretched (and importantly an forward expectation that principle wealth creators are no longer there) and consumer staple companies talking about 5-10% price increases. Sounds to me like you just lost some serious purchasing power.
Nominal wage growth is deminimus compared to nominal price gains. The equation is broken?
Posted by: s | Nov 2, 2007 11:45:41 AM
Regarding the 166k, the New York Times says:
"Adding to the uncertainty about the report, most of the job gain — 103,000 of the 166,000 net new jobs — came from an estimate that the Labor Department makes each month about how many jobs were added by new businesses. The Labor Department did not actually find evidence of these jobs; it assumed they were created based on historical patterns."
What does that mean?
Posted by: kroniks | Nov 2, 2007 11:46:56 AM
I increasingly look to the ADP survey rather than BLS NFP. ADP doesn't cover government of course but it is less noisy signal of private employment.
After all, they handle the actual employment records.
BLS tends to be revised towards ADP particularly in a turning point. This is of course due to B/D as the residual methodology.
All of that is to say that the 100K from ADP is not that far off from the 130K private jobs from NFP. Makes the number less suspect.
Posted by: Karl Smith | Nov 2, 2007 11:48:43 AM
You can read the whole thing and come to the conclusion that best suits whatever your argument is, however this snippet trumps it all:
"Employment in financial activities was essentially unchanged in October . . ."
And the requisite 43K was added for construction......
yes a wholly accurate report is there ever was one........
Ciao
MS
Posted by: michael schumacher | Nov 2, 2007 12:03:55 PM
Karl Smith,
In principle I agree that the ADP survey, based on actual payroll records, might be a better measure.
Unfortunately, their results were quite wildly off the BLS results at times, so IIRC they changed their methods about 6 months ago so that their result would be a better predictor of the BLS survey. I have to assume this means they've stirred a B/D model into the mix.
Posted by: Estragon | Nov 2, 2007 12:04:34 PM
kroniks,
"What does that mean?"
It means they are imaginary.
.
Posted by: VJ | Nov 2, 2007 12:45:08 PM
should'nt the machine start cranking out the "buffet to buy__________"
The precious trend is in danger of being breached if they can't claw back at least 80 pts from yesterday. It is a friday you know...
Ciao
MS
Posted by: michael schumacher | Nov 2, 2007 1:00:17 PM
