Shiller's chart is inflation adjusted, you can check the data yourself at www.econ.yale.edu/~shiller/data.htm
Ted you are exactly right, I understand the difference, my point was to show a high level of bullishness both with respect to the charts and investor sentiment.
The nfp number is definitely fraught with seasonal issues this month, however you can't subtract the B/D estimate from the nfp number. The revisions to January and February were positive, thus adding jobs not subtracting. How does Stone McCarthy adjust for weather effects? That is very subjective.
jacksscar, the raw NSA nfp number showed an addition of +843,000 after a rise of +469,000 in February.
You are right that 162k is probably misleading but there is as much chance it understates job growth as it overstates. Remember this number will be revised numerous times over the coming years. As I stated in my article I prefer to use the Household survey at this point in the cycle and even though that number is volatile you now have 3 straight months of strong job growth averaging over 350k per month.
Given the household survey has a better track record at turning points in the cycle it is not at all disingenuous to say the economy added a net 150k+ jobs this month. You just have to keep in mind that despite all the attention paid to the employment numbers they are subject to large revisions but that over a number of months you can see trends emerge and the current trend is for positive job growth in the US economy.
The BLS had a conference call in which they said that the best way to treat the census workers is to simply deduct them from the SA number despite the fact that the census workers are a NSA number. From the call:
From Bill: Hi. The headline payroll number is seasonally adjusted, and the hiring for the 2010 Census is NSA. How would you suggest adjusting for the 2010 Census hiring to determine the underlying trend (not counting the snow storms!)?
Michele Walker (BLS-CES): Thanks for your question Bill. There is an adjustment made for the 2010 Census. Before seasonally adjusting the estimates, BLS makes a special modification so that the Census workers do not influence the calculation of the seasonal factors. Specifically, BLS subtracts the Census workers from the not-seasonally adjusted estimates before running seasonal adjustment using X-12. After the estimates have been seasonally adjusted, BLS adds the Census workers to the seasonally adjusted totals. Therefore, to determine the underlying trend of the total nonfarm (TNF) employment estimates (minus the Census workers), simply subtract the Census employment from the seasonally adjusted TNF estimate.
damienhaas,
Firstly your maths in incorrect. Second you can't deduct the BD number from the NFP number, one is seasonally adjusted, the other is not.
November U.S. Employment Postmortem [View article]
Shang Liu
Of course people dropping out of the labor force isn't a positive, no one is arguing that it is. I was just pointing out, that perversely a falling participation rate has a positive effect on the unemployment rate but when the economy picks up and new entrants are encouraged back into the workforce, a rising participation rate works against an improving unemployment rate.
On Dec 06 07:34 AM Shang Liu wrote:
> How people dropping out of the labor force can be looked at as a > positive sign is a mystery to me.
U.S. Employment Picture Remains Ugly [View article]
Roger, yes you are right, thanks for picking up the typo, the household data is possibly giving the more accurate read. The household data is usually more reliable heading out of recession
On Nov 08 08:48 AM Roger Knights wrote:
> "The establishment data tries to make up for this via the controversial > Birth/Death model which continues to show positive net additions > of businesses each month, despite overwhelming evidence to the contrary. > Thus, since small business is getting smashed by limited access to > credit and crowding out from the government sector, the establishment > data is possibly a more accurate picture of the employment situation." > > > Err ... shouldn't that be: > "the establishment data is possibly a LESS accurate picture ..." > > OR > "he household data is possibly a more accurate picture ..."
U.S. Housing Starts Remain Depressed [View article]
TMHFT
Yes the bottom-callers have been at it for years, eventually they'll be right. However the wave of mortgage resets hitting now, the ending of foreclosure moratoriums and the possible withdrawal of the home buyers tax credit are setting up an interesting start to 2010.
Ugly Jobs Report Puts a Dent in V-Shaped Recovery Scenario [View article]
Norris may be right about the B/D model but overestimating employment but the evidence he offers is just plain wrong. You can't just take the B/D number and subtract it. The B/D number is not seasonally adjusted, the nfp number is, he's comparing apples with oranges. Poor reporting from someone who should know better.
On Oct 04 05:27 AM Roger Knights wrote:
> "However another number that should receive a lot of attention in > Friday’s report is the preliminary benchmark revision which estimates > non-farm payroll revisions of approximately -824k.," > > Here's an excerpt from the NYT story on this: > > "October 2, 2009, 12:25 pm Jobs Vanish > > "The recession took a much larger toll on employment than was previously > reported, the government said today. The Labor Department said that > it planned to revise the job figures by subtracting more than 800,000 > jobs that it had wrongly estimated were filled by workers. > ............... > "The culprit is probably the much maligned birth-death model .... > That model adds in jobs assumed to have been created by employers > who are too new to have been added to the survey, and subtracts jobs > from employers assumed to have failed and therefore not responded > to the bureau’s survey. > > "It is based on what actually happened in the previous five years > — a period that included a strong economy that, in 2006, created > many more jobs than the bureau initially estimated. > > "For the 12 months through last March — the period covered by the > benchmark revision — the birth-death model added 717,000 jobs <br/>.............. > > " the benchmark revisions are based on reports from states of unemployment > taxes paid. Those numbers take longer to be available, but are considered > to be more reliable. The benchmark revisions numbers announced today > will not be incorporated into the published numbers until next February, > ...." > > norris.blogs.nytimes.c...
U.S. Economy Improving but Lingering Problems Remain [View article]
If you hear me correctly I have no strong opinions on market direction in the short term, if I had to make a bet I'd day we are in for a pullback, but I'd just as soon as flip a coin
On Sep 30 06:57 PM Tony Petroski wrote:
> So if I hear you correctly, the market will either go up or go down > in October?
U.S. Economy Improving but Lingering Problems Remain [View article]
All Ords is the Australian equivalent of the S&P500. The title of the post may be misleading but I have no control over that, the good folks at Seeking Alpha have control over that.
On Sep 30 03:51 PM thiazole wrote:
> All ords? Is that Australian for the Russell 3000 index? > > You are probably correct in stating that we will have some kind of > correction in October, but it probably won't be nearly as fantastic > as bears are hoping for. It will look a lot like what we had from > mid-June to mid-July.
> Your point should be very carefully considered. All jokes aside. > It would be interesting to note available tonnage over the past 2-3 > years to determine the answer to that question. > > TFA any help with that?
Rise in Impaired Assets at Australian Banks Slows in 3Q09 [View article]
Absolutely Mark, the great confidence game orchestrated by Geithner and Co. via the feather tests , sorry stress tests, coupled with the suspension of mark to reality and the reinstatement of mark to fantasy has substantially reduced transparency. Interesting take by Chris Whalen at Institutional Risk Analytics posted on the Bog Picture yesterday:
Cruising for a Correction? [View article]
Cruising for a Correction? [View article]
Shiller's chart is inflation adjusted, you can check the data yourself at
www.econ.yale.edu/~shiller/data.htm
Ted you are exactly right, I understand the difference, my point was to show a high level of bullishness both with respect to the charts and investor sentiment.
Has U.S. Unemployment Bottomed? [View article]
The nfp number is definitely fraught with seasonal issues this month, however you can't subtract the B/D estimate from the nfp number. The revisions to January and February were positive, thus adding jobs not subtracting. How does Stone McCarthy adjust for weather effects? That is very subjective.
jacksscar, the raw NSA nfp number showed an addition of +843,000 after a rise of +469,000 in February.
You are right that 162k is probably misleading but there is as much chance it understates job growth as it overstates. Remember this number will be revised numerous times over the coming years. As I stated in my article I prefer to use the Household survey at this point in the cycle and even though that number is volatile you now have 3 straight months of strong job growth averaging over 350k per month.
Given the household survey has a better track record at turning points in the cycle it is not at all disingenuous to say the economy added a net 150k+ jobs this month. You just have to keep in mind that despite all the attention paid to the employment numbers they are subject to large revisions but that over a number of months you can see trends emerge and the current trend is for positive job growth in the US economy.
Has U.S. Unemployment Bottomed? [View article]
The BLS had a conference call in which they said that the best way to treat the census workers is to simply deduct them from the SA number despite the fact that the census workers are a NSA number. From the call:
From Bill: Hi. The headline payroll number is seasonally adjusted, and the hiring for the 2010 Census is NSA. How would you suggest adjusting for the 2010 Census hiring to determine the underlying trend (not counting the snow storms!)?
Michele Walker (BLS-CES):
Thanks for your question Bill. There is an adjustment made for the 2010 Census. Before seasonally adjusting the estimates, BLS makes a special modification so that the Census workers do not influence the calculation of the seasonal factors. Specifically, BLS subtracts the Census workers from the not-seasonally adjusted estimates before running seasonal adjustment using X-12. After the estimates have been seasonally adjusted, BLS adds the Census workers to the seasonally adjusted totals. Therefore, to determine the underlying trend of the total nonfarm (TNF) employment estimates (minus the Census workers), simply subtract the Census employment from the seasonally adjusted TNF estimate.
damienhaas,
Firstly your maths in incorrect. Second you can't deduct the BD number from the NFP number, one is seasonally adjusted, the other is not.
How Reliable Is the January Effect? [View article]
First Home Buyers Boost Wears Off [View article]
This article refers to the FHB grants in Australia that have pushed home prices to new records.
thanks
November U.S. Employment Postmortem [View article]
Of course people dropping out of the labor force isn't a positive, no one is arguing that it is. I was just pointing out, that perversely a falling participation rate has a positive effect on the unemployment rate but when the economy picks up and new entrants are encouraged back into the workforce, a rising participation rate works against an improving unemployment rate.
On Dec 06 07:34 AM Shang Liu wrote:
> How people dropping out of the labor force can be looked at as a
> positive sign is a mystery to me.
U.S. Employment Picture Remains Ugly [View article]
On Nov 08 08:48 AM Roger Knights wrote:
> "The establishment data tries to make up for this via the controversial
> Birth/Death model which continues to show positive net additions
> of businesses each month, despite overwhelming evidence to the contrary.
> Thus, since small business is getting smashed by limited access to
> credit and crowding out from the government sector, the establishment
> data is possibly a more accurate picture of the employment situation."
>
>
> Err ... shouldn't that be:
> "the establishment data is possibly a LESS accurate picture ..."
>
> OR
> "he household data is possibly a more accurate picture ..."
U.S. Housing Starts Remain Depressed [View article]
Yes the bottom-callers have been at it for years, eventually they'll be right. However the wave of mortgage resets hitting now, the ending of foreclosure moratoriums and the possible withdrawal of the home buyers tax credit are setting up an interesting start to 2010.
Ugly Jobs Report Puts a Dent in V-Shaped Recovery Scenario [View article]
On Oct 04 05:27 AM Roger Knights wrote:
> "However another number that should receive a lot of attention in
> Friday’s report is the preliminary benchmark revision which estimates
> non-farm payroll revisions of approximately -824k.,"
>
> Here's an excerpt from the NYT story on this:
>
> "October 2, 2009, 12:25 pm Jobs Vanish
>
> "The recession took a much larger toll on employment than was previously
> reported, the government said today. The Labor Department said that
> it planned to revise the job figures by subtracting more than 800,000
> jobs that it had wrongly estimated were filled by workers.
> ...............
> "The culprit is probably the much maligned birth-death model ....
> That model adds in jobs assumed to have been created by employers
> who are too new to have been added to the survey, and subtracts jobs
> from employers assumed to have failed and therefore not responded
> to the bureau’s survey.
>
> "It is based on what actually happened in the previous five years
> — a period that included a strong economy that, in 2006, created
> many more jobs than the bureau initially estimated.
>
> "For the 12 months through last March — the period covered by the
> benchmark revision — the birth-death model added 717,000 jobs <br/>..............
>
> " the benchmark revisions are based on reports from states of unemployment
> taxes paid. Those numbers take longer to be available, but are considered
> to be more reliable. The benchmark revisions numbers announced today
> will not be incorporated into the published numbers until next February,
> ...."
>
> norris.blogs.nytimes.c...
U.S. Economy Improving but Lingering Problems Remain [View article]
On Sep 30 06:57 PM Tony Petroski wrote:
> So if I hear you correctly, the market will either go up or go down
> in October?
U.S. Economy Improving but Lingering Problems Remain [View article]
On Sep 30 03:51 PM thiazole wrote:
> All ords? Is that Australian for the Russell 3000 index?
>
> You are probably correct in stating that we will have some kind of
> correction in October, but it probably won't be nearly as fantastic
> as bears are hoping for. It will look a lot like what we had from
> mid-June to mid-July.
Baltic Dry Index Tells the Real Economic Story [View article]
Check out this link at Railfax:
railfax.transmatch.com/
On Sep 23 10:02 PM doubleguns wrote:
> Your point should be very carefully considered. All jokes aside.
> It would be interesting to note available tonnage over the past 2-3
> years to determine the answer to that question.
>
> TFA any help with that?
Rise in Impaired Assets at Australian Banks Slows in 3Q09 [View article]
www.ritholtz.com/blog/.../
U.S. Consumer Deleveraging Continues [View article]