BLS Overstated Job Creation by 14.38% in 2007
For those of you who have been wondering, here is the data on the 2007 Benchmark Revision.
The good news is when looking at the total employment situation, believe it or not, BLS was pretty accurate. Their models of employment came within 0.2% of the actually measurement of jobs.
Where they fell down was accurately measuring NFP job creation. Based upon their own benchmark revisions, BLS overstated new job creation by a whopping 19.95% 14.38%.
Nearly every month, the subsequent revisions were rather large:
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I suspect this says less about BLS, and more about the difficulties in trying to accurately measure new job creation in near real time.
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Source:
Benchmark Article
Daniel Jackson
BLS, February 1 2008
http://www.bls.gov/web/cesbmart.htm
PDF version
http://www.bls.gov/ces/cesbmart.pdf
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Friday, February 01, 2008 | 09:31 AM | Permalink
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Comments
the huge revisions are a benefit to this administration because it decided to switch to a model that could show whatever they want WHENEVER they want.
Coincidence that the NFP #'s started to fall off a cliff and then POOF we now have a model that doesn't allow that to happen.
job creation , in this country, is the big myth. ever since someone decided that China was a cheap alternative...say 20 or so years ago.
Ciao
MS
Posted by: michael schumacher | Feb 1, 2008 9:42:29 AM
Sept. should be positive/green.
Posted by: tyoung | Feb 1, 2008 9:45:42 AM
265K? That seems like a pretty average benchmark revision from a historical perspective.
http://bigpicture.typepad.com/comments/2006/10/making_it_up_as.html
Posted by: Steve | Feb 1, 2008 9:54:57 AM
check the difference
i think it´s -191K instead of -265K
Posted by: fede | Feb 1, 2008 9:59:45 AM
Something wrong with this article - the September input is backasswards? how does it look when corrected, does that change your story?
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BR: Good catch -- I'll fix above.
There's an errant negative sign in the Septmber data series. That changes the overstatement from 19.95% to 14.38%
Posted by: Harley Evans | Feb 1, 2008 10:07:54 AM
fede,
Heh...it really IS hard to count jobs.
Posted by: Steve | Feb 1, 2008 10:08:55 AM
95K per month--not even close to equilibrium.
Posted by: Neal | Feb 1, 2008 10:09:18 AM
Why would you trust the revisions any more than original numbers?
Action in market the last two days feels like a big player is getting liquidated or blowing up. Watch youself everyone.
Posted by: Vermont Trader.. | Feb 1, 2008 10:22:21 AM
Bernanke had a reason to lower aggressively after all.
Charlie Gasparino looked like his dog died this AM with the monoline demise looking more unlikely by the day. Last night on Kudlow he gave the monoline death spiral the old college try, and it was pretty entertaining. These days Charlie is a must watch.
Posted by: kk | Feb 1, 2008 10:23:24 AM
Market could crash here...I have a funny feeling...look at gold tank on no news. This rally is ridiculous. If Dow 12000 breaks, it will hit 9800 very fast.
Look at Dow chart...right shoulder top right here. Aug and Nov lows are right around here too and are serious overhead resistance. Ominous.
Posted by: Steve Barry | Feb 1, 2008 10:38:09 AM
Barry: i agree and thanks to your post got me off the pot and out of cash. good call so far.
Posted by: scorpio | Feb 1, 2008 10:45:28 AM
From John Hussman's most recent post..
http://www.hussmanfunds.com
- "there is one particular scenario that would be ominous in my view. That would be if we see a relatively uninterrupted series of declines that breaks cleanly through the August and November lows, followed by a one-day advance of 200-400 Dow points. That's a script that markets tend to follow pre-crash. Though it's not a strong expectation or forecast, it's something worth monitoring, because we've started to see the pattern of abrupt jumps and declines at 10-minute intervals that is often a hallmark of nervous markets.”
From my perspective, that's largely the script we observed last week. Short-term market movements are demonstrating a form of chaotic instability that has generally indicated growing contagion rather than independence among investors. The most important difference between current market conditions and prior crash events is the behavior of interest rates. For example, rates were rising persistently before both 1929 and 1987. The clear downtrend of interest rates may turn out to be a saving grace here, given that the market's most spectacular losses featured hostile rate trends. Still, the best interest rate action has been in Treasuries, while credit spreads have been pushing to new highs, so the favorable trends in Treasury yields are partly a symptom of growing default risks in other areas."
Posted by: Vermont Trader.. | Feb 1, 2008 10:51:00 AM
The arbs don't seem to be too confident about the YHOO bid.
Leaving 12 to 15% under the bid is a very bad sign........If this puppy breaks it will be bad karma. Just a thought.
Posted by: Ross | Feb 1, 2008 10:57:40 AM
steve-
I agree with the H&S...it has been setting up since fall last year. The real issue is if it will be "allowed" to happen.
Fed just said it would do $60 billion TAF's every two weeks for an "indefinate period of time"......
That is not a sign that all is well....I wonder if that amount will show up verbatim in the fractional reserve requirements that seem to be populated by the exact auction amount. See Shedlock's post about this:
http://www.minyanville.com/articles/MER-C-jpm-bac-MBI-WB/index/a/15712
I am a bit surprised that more people are not aware of this.....not really sure if it means much but....it should.
How do you cause a bank run???.......LOL
let's see if it matters.....
Ciao
MS
Posted by: michael schumacher | Feb 1, 2008 11:00:47 AM
With the move in gold, I have a feeling dollar has made a major bottom. Time for other currencies to be debased to catch up...this will further cripple S&P earnings due to lower foreign revenue.
Posted by: Steve Barry | Feb 1, 2008 11:04:39 AM
Gold is dropping like a rock. Somebody is dumping (I wonder who?). If the market absorbs this supply quickly (as in this isn't a general sell-off), we're in some deep doodoo.
Posted by: Marcus Aurelius | Feb 1, 2008 11:07:16 AM
repost:
on Gold:
My guess is that some bank (most likely Spain) is dumping yet again. They actually back up the printed money with a real asset...funny that.....like for like.
Ciao
MS
Posted by: michael schumacher | Feb 1, 2008 11:16:02 AM
John Nadler thinks gold's drop this morning is due to profit taking by a large European firm:
http://tinyurl.com/2qbq9y
Great buying opportunity.
Posted by: Pool Shark | Feb 1, 2008 11:16:46 AM
being the first of the month I would say ECB's are getting capitalized via Gold sales.
Ciao
MS
Posted by: michael schumacher | Feb 1, 2008 11:18:10 AM
What we need to do is create an Federal Independent Statistical Department. Just like the FED - lol!!!
Posted by: Justin | Feb 1, 2008 11:23:01 AM
Want to share here what I just read on another board:
Okay, let me help you all understand what the Fed's moves mean for mortgage rates.First, a little background. 799 FICO score, millions in liquidity, looking at a 2BR in the $1.5M range, solid mid-6 figure income.
I spoke to Chase today and the jumbo rate they quoted was 7% for 30y fixed, 0 points. Conforming (I can pay an outsized down payment to get me there) is 6.25%.
What the fuck, right?
When I asked about the Fed's moves, Chase's response was that mortgage rates would actually RISE.
Yes, you heard me right - Chase said that rates WILL GO UP TOMORROW as a result of the Fed. Why?
Because the yield on the 10 year jumped. Because inflation expectations have gone up.
What the Fed does has little to zero effect on mortgage rates for the rest of us. In fact, it hurts mortgage rates. It does, however, have a beneficial effect on credit card rates, auto loans and student debt.
So, the folks... who claim that all is well because of the Fed simply do not have a grasp of the facts. At all.
So, it seems like there will be a lot less home buying goin' on in at least the near future if this is any indication.
Posted by: Paul in NYC | Feb 1, 2008 11:27:12 AM
Barry, why don't you make it interesting...all you gurus should start calling each other out! You guys play this game of "I'm right, but I don't want to step on your toes." If one has to crash and burn, to tell the truth, well then lite the fire! Can't believe we are not at 2001 levels, when the economy is so much worse off. I just got back from a long drive and there were so many for sale signs, my head is swimming. I just turned 50 and can't remember anything like this. Perhaps there is a happy story to be told when it is all over. These Fuckers on tv, pump, pump, and pump - Kudlow should have goldielocke's stuffed down his throat - I've got his goldie right here.
Posted by: Justin | Feb 1, 2008 11:36:27 AM
Central banks could be capitalizing, as suggested... or could be more of this... good article. We stare into the abyss again.
http://seekingalpha.com/article/62678-anybody-seen-our-gold
Posted by: Stuart | Feb 1, 2008 11:48:02 AM
how many times are we going to see
Moody's, Fitch put out PR that says they "might" downgrade the mono's.
I "might" get a million dollars.....
Hell one of them has been "assessing" that very thing for over two months now.....
And still no call outs at all except Ackman, who got really quiet all of a sudden..
Ciao
MS
Posted by: michael schumacher | Feb 1, 2008 11:55:34 AM
Stuart,
Fascinating stuff! Makes you wonder how much the bullion banks have been losing recently, being forced to buy gold in the open market to cover their lease agreements.
"Staring into the abyss" indeed.
Posted by: Pool Shark | Feb 1, 2008 12:00:45 PM
