NFP Minus Birth Death Adjustments
Via the miracle of Bloomberg, we can back out of the NFP data the B/D adjustment
By that metric, today's number was actually very weak compared to other Payroll numbers
Note: As previously mentioned, the B/D is not a one for one additor to the NFP data. It goes into the total employment data, which is then seasonally adjusted, before a monthly gain/loss is made.
The greater impact of B/D is on the total annual jobs created, and not the monthly numbers.
Friday, May 02, 2008 | 01:26 PM | Permalink
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Why don't you take out the seasonal adjustment as well? Then the numbers won't look so bad.
Posted by: Roman | May 2, 2008 1:32:18 PM
Either way it's the lowest point dating back to 2002. That's pretty bad...
Posted by: Brian Jacobs | May 2, 2008 1:37:07 PM
Note how this chart shows all of the various spikes and valleys --
November/December pre retail holiday hiring has the biggest spike, and the post Xmas layoffs in January is the deepest valley.
If you wanted to, you could either smooth it and/or seasonally adjust it.
Meanwhile, here is the actual data.
Posted by: Barry Ritholtz | May 2, 2008 1:37:08 PM
I don't understand then why institutions are buying these #s and buying stocks. It seems that our whole economic system, financial system, and gov. are colluding on a GIANT scam!
Posted by: Samuel13 | May 2, 2008 1:58:38 PM
Of all the comments today, news releases, I think the FEd opening up the TAF to additional collateral, such as .... credit cards.. was the most structurally important. Picked up this comment I thought was quite telling from the tickerforum.
"I found the action of Gold and Oil after the Fed announcement to be telling this morning. The "long dollar / short commodity" meme that was supposed to happen intermediate term suddenly was off. Something did not go as planned today, although it took the dummy equity markets a few hours to figure it out.
My guess? The folks that trade this stuff may have picked up the first scent of a Fed balance sheet contamination. Yeah, the dollar rallied vs other fiat currencies, but hard assets were having none of this "dollar strength" BS.
This was a BIG move by the Fed today. Taking all classes of assets now onto the balance sheet and increasing the TAF by 50%?! These people are completely out of control.
"
Posted by: stuart | May 2, 2008 1:58:48 PM
In the end the chickens will come home to roost. Just ask Cramer,his company's stock (TSCM)has lost 1/3 of its value in the last 5 days. HAH.... don't sell BEAR. Buy the street.com....HAAAAH
Posted by: Samuel13 | May 2, 2008 2:01:44 PM
If you take out the seasonal adjustments then December and January are always awful. My question is whether they took the numbers and just subtracted out the adjustment from the seasonal numbers or if they took them out of the non-seasonally adjusted and then reseasonalized them. That would be interesting.
Posted by: Kirzner | May 2, 2008 2:18:26 PM
Stuart,
Excellent point. I believe it was S%P who recently estimated the recovery rates on AAA, AA and A paper. It wasn't pretty and the FED gets to collect?
Fed's balance sheet is starting to look like a salvage yard with a big fence around it.
Posted by: Ross | May 2, 2008 2:24:35 PM
If this is your average slow-down, perhaps we are closer to a bottom then?
And if this is a deflationary or a stagflationary recission -- jobs may follow asset prices as deleveraging continues and job losses follow Unless of course fed takes on all asset backed debt in their books which means higher interest rate and/or a falling dollar trend likely to continue?!
I guess market will continue to alter between Euphoria and Panic then...
Posted by: Nihilism | May 2, 2008 2:26:51 PM
OT: RUN, don't walk, to read Lee Adler's latest:
http://wallstreetexaminer.com/?p=2633#more-2633
Posted by: karen | May 2, 2008 2:32:07 PM
It might work better to work with the non-seasonally adjusted change, back out birth death, then re-seasonalize -- I'm not perfectly certain how they seasonalize, but I bet it is written out somewhere -- but the 12 month moving average for seasonalized and non-seasonalized are the same.
Something that can be done using the BB XL API, and Excel, but not simply. If I get time, I'll give it a try, and then post it over at Aleph Blog.
Posted by: David Merkel | May 2, 2008 2:56:13 PM
Now we know why the TAF was increased 50% this morning . CFC just downgraded to BB+ and the Fed was sitting with about $40B of CFC junk on its books, via the TAF. Now it probably all has to be putback....uh-oh.
Posted by: stuart | May 2, 2008 2:57:05 PM
I would like to see economic data reporting removed from the government and contracted to the private sector - possibly the economic department of several non-partisan universities. A current example is the U of Michigan consumer confidence survey.
Not just data collection and running the numbers but the methodology used as well. As far removed from political pressure as humanly possible should be the goal. Then perhaps we can believe the results - we sure can't now.
Jim
Posted by: NC Jim | May 2, 2008 3:00:06 PM
What a Killjoy - next you'll be pointing out that if you subtract Shadow Stats inflation numbers S&P 1Q earnings are negative even ex financials.
Posted by: dug | May 2, 2008 4:47:04 PM
So what ?
The market does not care that the numbers appear bad. The market is pricing in the low interest rates and betting that the Fed will continue to support the market as their primary focus.
Confession time. Three years ago, I naked shorted the copper market on the premise that the Fed would do the right thing and bring inflation under control. I lost, six figures.
Do not bet against the hurculean effort by the Fed to keep this afloat. They have destroyed any and all incetive to save and will continue to do so. Do not surmise that good practice or any of the other happy horseshit from our youth applies. This is not your Father's kind of thing.
Posted by: blam | May 2, 2008 11:24:57 PM
Dear Barry:
I am a silent visitor/admirer of your TBP. Have not posted a comment yet. But, I find it valuable.
However, it is important that we do not commit the same mistakes as we accuse the government of, even inadvertently.
First, given that the birth/death adjustment is done at the NSA level, it is not correct to subtract it from NFP TCH in Bloomberg which is a SA figure.
The only way is to get from BLS the NSA Total Payroll figure without birth/death adjustment and show the difference that it has contributed to inflating the NSA payroll.
For now, we need to content ourselves with just pointing out the anomaly of jobs being added in construction and financial services under the Birth/Death calculations.
Second, under www.shadowstats.com, the CPI inflation figures appear too similar to the official CPI estimate with some 2% or 3% or 4% just added to the officially reported inflation. The wiggles are otherwise identical. That is a bit odd.
Wolfgang Muenchau, FT columnist (www.eurointelligence.com) first raised this suspicion.
So, one needs to make sure that true measures of CPI do not lie too!
Posted by: Anantha Nageswaran | May 3, 2008 2:36:34 AM
