There are lies, damn lies and statistics. Always be careful when looking at what the government says. At the turning points the patches and adjustments do not work properly and previous months’ numbers are routinely revised in the direction of new trend.
For example, back in 2006 new home sales were usually reported as an increase every month. That happened because the previous month was always revised down and the new unrevised number was coming as an increase on top of unrevised number, just to be revised down the next month.
Same with today payroll report. To get the proper picture you need to add the jobs lost in June to the reported revision of the previous months, which leads into total decline of 114k jobs. And this is what the honest headlines must report.
Let’s dig more. Hospitality, leisure, education, health and government added 82,000 jobs, masking the more violent declines in all other sectors. Temporary help services lost another 30k jobs, which is a leading indicator for the next reports.
Median duration of the time a person stays unemployed increased from 6.2 weeks last year and 8.1 weeks in March to 10.0 weeks in June. It’s much harder to find a new job.
Not to be lost behind the NFP release is the weekly jobless claims, which was 408,000 new claims (obviously including the previous week’s adjustment). Usually the pundits on TV say there is no recession until claims are above 400k. I disagree, but it already doesn’t matter.
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The ISM services just came at 48.2 vs 51 consensus estimate and the stock market retraces all earlier gains.
My opinion is that this decline will end end with capitulation in few days (maybe even today) with sharp declines and VIX around 27
So far the banking index is -0.45% in the red. If it doesn’t run in the next 40-50 min this rally is bogus.
RE: Revisions
Yes, that’s how it works.
The Birth/Death model has an even greater lag.
Some say it takes B/D 6-9 months to match trend. Therefore, except in sustained contractions, it always aberrates job stats to the increased employment side.
How many of the new jobs over the last year have been “government” jobs? Every report I have seen lately has +20K-ish growth in government jobs, which if you’ll excuse my conservative politics, I see as an overall net negative for the economy.
Is the trailing 12-month total listed somewhere?
#4
Those totals would say a lot about deficit spending.
The taxes paid by Govt. employees are a wash.
Increasing Govt. employment, while tax cash flow is contracting, increases demand on the debt market, raises interest rates, which puts additional burden on the private sector economy.
>>> if you’ll excuse my conservative politics, I see as an overall net negative for the economy
I am conservative enough to completely agree with you.
Well, I’ll make the exception for teachers and scientists.
#5 I’m not even aware of any kind of govt job that is actually producing anything. That’s all services, and usually overstaffed, lazy, too job secure to work hard and in many cases even useless.
Income stagnation and soaring personal/household debt marked the previous years; this data was rarely mentioned and its importance rarely discussed. And now it is no surprise that jobs are being lost because debt-financed consumption is rapidly contracting.
“I’m not even aware of any kind of govt job that is actually producing anything. That’s all services, and usually overstaffed, lazy, too job secure to work hard and in many cases even useless”
Andy BeBut, have you ever worked in a gov’t job? I have, and I saw a lot of overworked, understaffed people who were constant fear of losing their jobs in the next round of furloughs.
The grass isn’t any greener on that side of the fence.
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