August Nonfarm Payrolls misses estimates


August Nonfarm Payrolls: +169K vs. consensus +180K, +104K previous (revised down from +162K).

Unemployment rate 7.3% vs. 7.4% consensus, 7.4% previous.

Comments (81)
  • AZ Desert Trader
    , contributor
    Comments (329) | Send Message
     
    holy smokes that is a huge revision! and how does the headline rate keep going down.

     

    This definitely should not signal an end to QE.
    6 Sep 2013, 08:33 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    The revisions are part of the ‘Smoke and Mirrors’ campaign. Being off a few percent is understandable; being off 35% has to be an attempt to deceive. I have little doubt the August numbers will be revised downward as well. Between the August print and the revised July numbers, I agree this should signal that QE should continue.

     

    Personally, I think that current stock prices reflect (to a degree) some anticipated earnings over the next few months and to begin Tapering in September would result in a significant selloff. I’m in favor of eliminating QE as I see diminishing returns but I think they should give the economy (and stocks) until January to begin Tapering.
    6 Sep 2013, 08:47 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13369) | Send Message
     
    LOL a 40% downward revision. Why should we even believe this number? Anyways, the market takes it in style hoping no taper. We will see, it seems pretty clear the Federal Reserve must taper or rates will just keep going up. Foreigners will stay clear like all smart money until the Federal Reserve stops spiking the US treasury auctions and making treasury rates lower than they should be.

     

    Given our wallowing debt and dead economy, I'm not sure if the Federal Reserve or the government will like what rates normalization will look like. If we plan on blowing another 250 billion on Syria without any benefit to us maybe 7% for a 30 year treasury sounds about right. Think what that will do to the US government's budget?
    6 Sep 2013, 12:24 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Unfortunately you don't provide any evidence to support your claim of malfeasance.

     

    It is just the usual conspiratorial accusations sans evidence ...
    6 Sep 2013, 02:38 PM Reply Like
  • GaltMachine
    , contributor
    Comments (2068) | Send Message
     
    These are some bizarre numbers. Revised lower for previous months?

     

    U6 did drop a lot from June so that definitely is a positive.

     

    Weird given the noticeable drop in jobless claims.
    6 Sep 2013, 08:36 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1449) | Send Message
     
    "Weird given the noticeable drop in jobless claims"

     

    Perhaps those who still have jobs have become more diligent about keeping those jobs, thus reducing turnover component in the weekly claims?
    6 Sep 2013, 08:50 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    the huge revisions are ridiculous
    6 Sep 2013, 08:48 AM Reply Like
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    All 4 leading indicators hidden inside these numbers are still firmly positive....
    6 Sep 2013, 08:51 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1449) | Send Message
     
    bbro, you've been saying that kind of stuff for over two years, every time an NFP comes out or even a weekly claims report. So, with your constant harping that your hidden leading indicators are "firmly positive", how do you explain the constant parade of disappointing actual results? Or, do you disagree that the results have been disappointing?

     

    I am trying to gauge your "firmly positive". Perhaps you consider today's report to be just another in a stream of "firmly positive", reports. In my book, it is not so positive, unless one is a fan of QE.
    6 Sep 2013, 09:01 AM Reply Like
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    "do you disagree that the results have been disappointing?"

     

    yep
    6 Sep 2013, 09:11 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    bbro is of the camp where if the numbers are good everything is good, if they are bad/disappointing then there are some 'hidden leading indicators' only he knows about that still point to positives...

     

    Can't fault the guy for being optimistic though!
    6 Sep 2013, 09:14 AM Reply Like
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    There will be a time to be negative on the economy....this ain't it....
    6 Sep 2013, 09:26 AM Reply Like
  • mickmars
    , contributor
    Comments (1312) | Send Message
     
    58.6% of civilians employed. Down from 58.7% last month. In line with numbers from the late 1970's.

     

    http://bit.ly/uosUSn

     

    If it smells like a turd sandwich, it's a turd sandwich. No recession. No recovery.
    6 Sep 2013, 02:04 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Hey, 169,000 is not a bad number in itself. What is disappointing is the make up of the jobs created. Mostly retail and restaurants.
    6 Sep 2013, 02:42 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    National income and output are up over 10% since the end of the recession. It is a recovery.
    6 Sep 2013, 02:43 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    A recovery but not enough of one to bring you home. :-)
    6 Sep 2013, 03:19 PM Reply Like
  • GaltMachine
    , contributor
    Comments (2068) | Send Message
     
    AIP,

     

    Just FYI, statistics are generally misleading in isolation which is why it is helpful to have a compendium of confirming facts.

     

    I don't read the HuffPo but this was the first link on google dated August 22nd, 2013:
    http://huff.to/14ra3DB
    "Median Household Income Dropped 4 Percent Since The End Of The Great Recession: Report "
    WASHINGTON — The average American household is earning less than when the Great Recession ended four years ago, according to a report released Wednesday.

     

    U.S. median household income, once adjusted for inflation, has fallen 4.4 percent in that time, according to the report from Sentier Research. The report is based on an analysis of Census Bureau data."

     

    It appears that all of the income gains you reference have gone to the top 1% in this country which is ironic given who the President happens to be.
    6 Sep 2013, 04:35 PM Reply Like
  • BruceInKY
    , contributor
    Comments (445) | Send Message
     
    Is it any different in Paris? How's job creation in Lyon or Marseilles, for that matter? What kind of pressure is the immigrant population applying on social services and the employment picture? Are those not "bad numbers" in themselves?
    6 Sep 2013, 11:36 PM Reply Like
  • bbro
    , contributor
    Comments (11216) | Send Message
     
    Mickmars.....The employment to population ratio has little predictive value in and of itself especially looking at month to month....there is a way of it being useful but
    I am going to let you figure it out yourself....
    7 Sep 2013, 04:41 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    The US is enjoying the best economic performance of any developed country. Annual real GDP of 2% is only a dream here except possibly for some Northern European countries.

     

    I don't live in France any more and I don't defend their system. By the way, immigation is not a big French problem. The core of their problem is economic and reflects an over-regulated labor market.
    7 Sep 2013, 07:24 AM Reply Like
  • labas112
    , contributor
    Comments (496) | Send Message
     
    What is the point of reporting if you are constantly making huge revisions to these numbers? My 3 year old can forecast better than this.
    6 Sep 2013, 09:06 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Really? I doubt ...
    6 Sep 2013, 02:44 PM Reply Like
  • youngman442002
    , contributor
    Comments (5123) | Send Message
     
    over 500,000 left the workforce.....wow...just left...that is how they drop the headline number....wonder what those 500,000 are doing...watch food stamps and disability....that is where they go..to the freebies....great economy huh BBRO....????
    6 Sep 2013, 09:08 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    youngman there are 'hidden leading indicators' that are firmly positive people who drop out of the labor force no longer matter as those still in the labor force will pay taxes for them to exist.
    6 Sep 2013, 09:15 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    Great sarcasm wigit playing off the kernel of truth.
    6 Sep 2013, 09:37 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    Its all in good fun and I think bbro knows it :) (or if not much <3 bbro!!).

     

    He has stuck to his guns which is good he has conviction; and that is pretty rare I certainly have a hard time deciding which way we are headed.
    6 Sep 2013, 09:40 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (4738) | Send Message
     
    So at this rate we will end up with 50 people supporting the entire economy...rick santelli :)
    6 Sep 2013, 09:41 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Young Man,

     

    Students working during the summer go back to school. People become disabled. Others retire.

     

    It is not that difficult to understand.
    6 Sep 2013, 02:47 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Hey, anyone who retires has dropped out of the work force. Any student who worked this summer and quits to return to school in September has the labor force.
    6 Sep 2013, 02:48 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Poor Texan,

     

    You should try to understand things. People retire. People leaves jobs to go school. People become disabled.
    6 Sep 2013, 02:49 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    What is not funny is your unwillingness to consider the perfectly normal reasons why people stop working.
    6 Sep 2013, 02:50 PM Reply Like
  • BruceInKY
    , contributor
    Comments (445) | Send Message
     
    doubleplusgood
    6 Sep 2013, 11:40 PM Reply Like
  • BruceInKY
    , contributor
    Comments (445) | Send Message
     
    At AIP: Do you realize how condescending this post sounds?
    6 Sep 2013, 11:41 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    I am condescending to those who willfully ignore common sense. In a dynamic capitalist system like the United States jobs are created and destroyed each month on a large scale.

     

    It doesn't take an advanced degree in economics, which I have, to realize that people leave the labor force for a variety of reasons, including pregnancy, retirement, education, disability, etc.
    7 Sep 2013, 07:28 AM Reply Like
  • WMARKW
    , contributor
    Comments (10786) | Send Message
     
    Yes, and people also leave the workforce because they get laid off, their company goes out of business, Obamacare forces employers to reduce staff, because they have no job skills because they were poorly educated by the government, because of age discrimination, because of off-shoring, because of productivity increases, etc, etc, etc, ad nauseum.

     

    So the real question is what's the combination of good things happening and along with the bad things happening. Does 2%GDP growth signal upward movement? Of course it does. Does it signal a "robust" economy? Heck no it doesn't. So bbro is probably right in the sense of what he is measuring. He says the patient is living and breathing and that vital signs are stable, perhaps improving. What he doesn't say, is that the patient will be in the hospital still for a long time.
    7 Sep 2013, 08:15 AM Reply Like
  • Uncle Ben B.
    , contributor
    Comments (9) | Send Message
     
    Liberal in Paris

     

    "It doesn't take an advanced degree in economics, which I have, to realize that people leave the labor force for a variety of reasons, including pregnancy, retirement, education, disability, etc."

     

    National income and output are up over 10% since the end of the recession. It is a recovery. (Cherry pick some data why don't we) S&P is up over 10% since the end of the recession as well. Flat over ten years....Kind of like income.

     

    Please. An advanced degree in economics. Well, since you already tooted your own horn, lets get it straight. A recovery would mean that the ECONOMY itself has supported and sustained growth, neither of which have really been accomplished. Quantitative easing, which I am sure your left wing bias will tell you, has been the reason we have seen any "growth". Growth equaling an inflation of asset prices and missallocation of capital.

     

    And to top it off, we are adding PART TIME jobs. No benefits, no means to save a pay check and no growth.

     

    -Uncle Ben
    7 Sep 2013, 09:34 AM Reply Like
  • Tricky
    , contributor
    Comments (2425) | Send Message
     
    Hello AIP,

     

    I don't purport to be a guru in the calculation of govt stats. But as I look at the definition of Labor Force Participation Rate, it is "The labor force participation rate is the percentage of working-age persons in an economy divided by a denominator of (Are employed + Are unemployed but looking for a job ). Typically "working-age persons" is defined as people between the ages of 16-64. People in those age groups who are not counted as participating in the labor force are typically students, homemakers, and persons under the age of 64 who are retired"

     

    To me, the justifiable concerns are: 1) do you really think that a lot of <64 year olds are "voluntarily" retiring b/c they've got a big enough nest egg?; 2) anecdotal evidence of a growing industry in bogus/semi-bogus "disability" claims; 3) the period covered (Jun-Aug) is not back to school season (and that effect should be handled via seasonal adjustments), ... all leaving a collective anecdotal conclusion that: 4) the majority of the drop in participation is people who want/need to work giving up on the search.

     

    Cheers.
    7 Sep 2013, 10:27 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Show me the beef. Obamacare has not even implemented. Show me some statistical analysis to support your point of view.

     

    A much more plausible candidate for discouraging full time hirings is the repeated budget showdowns orchestrated by the Republicans.

     

    The uncertainty faces the private sector is driven by this constant threats of refusing to raise the debt limit.

     

    Given that the US deficit has fallen in excess of 30%, may be these clowns will finally stop.
    8 Sep 2013, 08:35 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Uncle Ben,

     

    The S&P is up 140% since the recession, not ten percent.

     

    You are not cherry picking data, you're flat wrong.

     

    And no, a recovery does not imply the absence of fiscal or monetary stimulus.
    8 Sep 2013, 08:37 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Well, yes, the Baby Boomers are beginning to retire in large numbers. And yes, every August labor force participation declines as students leave summer jobs.

     

    In recent years the attempts to seasonally adjust for the student effect have gone poorly because universities and colleges are moving the beginning of their semesters.

     

    It is a big country with 330 million people and a work force over 100 million.

     

    Large movements in and out of the labor force are a given and a good thing. It's economic freedom.
    8 Sep 2013, 08:41 AM Reply Like
  • Tricky
    , contributor
    Comments (2425) | Send Message
     
    Hello AIP,

     

    As I Google the subject of labor participation rate, people seem to be using different definitions of the denominator. My understanding is that the "official" one does NOT include people >65. So the natural aging of baby boomers (past 65) should not impact this? Should it not include only massive waves of baby boomers retiring prior to turning 65? Articles like this http://wapo.st/17Ezkcn seem to confuse that?

     

    And again, admittedly anecdotal, it's hard for me to believe that massive waves of baby boomers are voluntarily retiring, given the poor shape of nest eggs (household wealth is way more skewed than income is)?

     

    From that same WaPo article: "And here’s another clue that this isn’t just a demographic story: The participation rate for workers between ages 16 and 54 fell sharply during the recession and still hasn’t recovered. Obviously retirements can’t explain this"

     

    Your comment re: August seasonal adjustments makes sense. But I'm not sure how that helps explain big revisions to June/July job creation -- yes, I know I just jumped from one stat to another ;-)
    8 Sep 2013, 11:47 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Hi,

     

    Lots of people retire before 65. Corporate buy outs are a feature of American life.

     

    Big corporations will buy out older employees all the time. It is how they downsize their work forces.

     

    Many discouraged workers have left the labor force over the last thirty years by accepting reduced corporate pensions. They still do.
    8 Sep 2013, 03:45 PM Reply Like
  • Michael Reilly
    , contributor
    Comments (17) | Send Message
     
    74k less employed than reported for June and July, yet we move down from 7.4 to 7.3%? Big move in 10 year after this release...
    6 Sep 2013, 09:12 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    And ten year retraced about half the movement up by the close of business.
    8 Sep 2013, 03:45 PM Reply Like
  • june1234
    , contributor
    Comments (4348) | Send Message
     
    How can you still have a job when you come up with revisions like that time after time .They might as well use a dart board and a blindfold to come up with these numbers.
    6 Sep 2013, 09:16 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    It is called making estimates using tiny samples.

     

    Remember, there is little incentive for companies even to respond to the government's request for information.
    6 Sep 2013, 02:57 PM Reply Like
  • tom_t
    , contributor
    Comments (318) | Send Message
     
    CNN: "Only 63.2% of Americans now participate in the labor force -- meaning they have a job or are looking for one. That's the lowest rate since August 1978. "
    6 Sep 2013, 09:21 AM Reply Like
  • mobyss
    , contributor
    Comments (2595) | Send Message
     
    Wow, that QE that has been running nearly continuously for four years sure has helped the real economy! Well, at least now stocks will go up because QE will continue because things are so bad for the average worker who just gave up even looking for a job. Lowest participation rate in 35 years!
    6 Sep 2013, 09:30 AM Reply Like
  • J Mintzmyer
    , contributor
    Comments (8114) | Send Message
     
    mobyss,

     

    Better question is: where do you think we'd be WITHOUT QE? Disaster, that's where- Spain-status.
    6 Sep 2013, 09:35 AM Reply Like
  • wigit5
    , contributor
    Comments (4365) | Send Message
     
    I agree we probably would be in disaster land without QE... but I wonder if that wouldnt be better then faux growth land... at least if you bite the bullet and let a true honest bottom set in you can start to rebuild... with QE we aren't trying to fix problems because we have covered them up.
    6 Sep 2013, 09:41 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1449) | Send Message
     
    QE will soon turn into it's own disasterland. The undertow the we've been swimming in is beginning to evidence itself.
    6 Sep 2013, 11:18 AM Reply Like
  • mobyss
    , contributor
    Comments (2595) | Send Message
     
    When you get hit by a car, you go to the hospital and get morphine for the pain. Then you stop taking the morphine, are discharged, and have physical therapy. Then one day you're walking on your own again, maybe taking a Tylenol once in a while for the aches.

     

    The US economy was hit by a truck in 2008. The Fed hooked up a big morphine drip with QE1. But five years later, this economy is still in the hospital, with a bigger morphine drip than it had to begin with. Forget about standing on its own. Usually when you stay in a hospital bed for five years it means you're not getting up again. I had a great-grandmother who spent her last 12 years in a bed.

     

    I'm not saying the economy will die, but this current Fed-fiat-debt based system is not looking healthy for the long term.
    6 Sep 2013, 11:50 AM Reply Like
  • DaveReller
    , contributor
    Comments (20) | Send Message
     
    Mobyss, I like the morphine drip analogy, that's one of the better ones I've read.

     

    All the Fed money-printing (aka. QE*) has done is remove the natural consequences of a recession. Instead of a sharp decline followed by a sharp rebound, we instead got a "soft landing" followed by 4 years (and counting) of anemic economic growth that lags behind every other recession recovery. Thank you, Alan Greenspan and Ben Bernanke! Oh, and how could I forget about the significant increase in government "help" ("stimulus" & ObamaCare, among others) and subsequent spending that has, among other things, caused millions to permanently leave the work force and started a growing movement among many employers to move more jobs to part-time, lower-paid positions.
    6 Sep 2013, 12:28 PM Reply Like
  • mfritz095
    , contributor
    Comments (21) | Send Message
     
    The question is not how much worse would it have been without QE, the question is why is it not better? How much worse cannot be quantified, where the economy is now can be and it is not good.
    6 Sep 2013, 12:49 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    The main problem the US economy faced was a devastating reduction in net worth. It was a balance sheet recession. Lower net worth dampens both the supply and demand for credit.

     

    By and large, the balance sheets have been rebuilt.

     

    Growth was 2.8% in 2012 and probably about 2.5% this year. Next year it should be stronger.
    6 Sep 2013, 02:55 PM Reply Like
  • GaltMachine
    , contributor
    Comments (2068) | Send Message
     
    AIP,

     

    "By and large, the balance sheets have been rebuilt. "

     

    For whom?

     

    " A Tale of Two Recoveries: Wealth Inequality After the Great Recession"

     

    Blog Post by: Benjamin Landy, on August 28, 2013
    http://bit.ly/1e0ohj2
    "The inequality of the economic recovery has been even worse. According to a Pew Research Center analysis, every dollar and more of aggregate gains in household wealth between 2009 and 2011 went to the richest 7 percent of households. Aggregate net worth among this top group rose 28 percent during the first two years of the recovery, from $19.8 trillion to $25.4 trillion. The bottom 93 percent, meanwhile, saw their aggregate net worth fall 4 percent, from $15.4 trillion to $14.8 trillion. As a result, wealth inequality increased substantially over the 2009–2011 period, with the wealthiest 7 percent of U.S. households increasing their aggregate share of the nation’s overall wealth from 56 percent to 63 percent. (See Figure 1.)"

     

    This is an economy that is currently benefiting the rich disproportionately.

     

    Are you a proponent of trickle down economics?
    6 Sep 2013, 04:53 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    There is very little sense to suggest that the US would quickly from disaster land. During the first years of the Great Depression, the government did what you advocated, nothing. And the economy did not rebound. The waves of bankruptcy undermined the banking system to the point it verged on collapse.

     

    It was the government that stabilized the banking system by introducing depositor insurance and a temporary bank holiday.
    7 Sep 2013, 07:31 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    To the contrary, the US economy is improving with deleveraging now complete. Real GDP grew 2.8% in 2012. Not a shabby performance. After the disastrous 4Q12 quarter, the economy has been accelerating with growth expected to exceed 2.5% in the third quarter.
    7 Sep 2013, 07:33 AM Reply Like
  • WMARKW
    , contributor
    Comments (10786) | Send Message
     
    Wasn't Q1-2013 1.1% and Q2 1.7%?
    7 Sep 2013, 08:18 AM Reply Like
  • Uncle Ben B.
    , contributor
    Comments (9) | Send Message
     
    " with deleveraging now complete"

     

    Not true for the government.

     

    Not true for the people.

     

    Not true for the Fed.
    7 Sep 2013, 09:33 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Q2 was revised up 2.5%. I don't know about Q1.
    8 Sep 2013, 08:44 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Uncle Ben,

     

    You are light on the facts. The household sector (the people) has deleveraged by 1.5 trillion dollars. Debt service to debt ratios have fallen dramatically.

     

    http://bit.ly/WnYYiM
    8 Sep 2013, 08:49 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    QE has been a free lunch. It hasn't created inflation, but it has kept mortgage rates lower than otherwise.

     

    And the government gets back almost all the interest it pays the Fed.

     

    Free lunch for the most part.
    8 Sep 2013, 03:47 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    All these drugs analogies are far fetched.

     

    You are really saying that the government should have done nothing in 2008 and 2009.

     

    Let the banking system collapse.

     

    Let unemployment go to 25%.

     

    Because you know that self correcting forces in our market economy will make everyone whole.

     

    Except we tried that during the Great Depression and it didn't work.

     

    The Fed did nothing during the Great Depression. The goverment raised taxes and cut spending and it still couldn't get a balanced budget because austerity depresses the economy.
    8 Sep 2013, 03:50 PM Reply Like
  • Geotovore
    , contributor
    Comments (15) | Send Message
     
    What's the point of releasing a completely unrealistic number if its only going to be that noticeable of a revised number?

     

    Why don't agencies just hold off on reporting the numbers for the previous month and instead focus on the newly released, yet more accurate, numbers on the month before last? This is ridiculous.
    6 Sep 2013, 12:45 PM Reply Like
  • tomorourke1
    , contributor
    Comments (30) | Send Message
     
    I wonder how many more months we will have to experience the CNBC mob collectively peeing on our shoes and telling us its raining. They have looked for a silver lining in every lackluster jobs release. Even Krugman has thrown in the towel on BHO-nomics but I guess Leisman, Zandi, Kernan and Sorkin will keep the flame.
    6 Sep 2013, 04:40 PM Reply Like
  • nafar
    , contributor
    Comments (331) | Send Message
     
    There is so much being said about QE. Is it not the time to someone provide the figures where the money went. As I know, investors borrowed and invested abroad as one area where the large chunk went. I don't think it helped in anyway creating employment here. Even before last QE, banks and corporations had huge cash balances in their balance sheets. So not understandable who is borrowing money and where it is going.
    One thing is commendable that GDP surpassed the pre recession level with lesser people working. We have not yet absorbed over 8 millions jobs lost during recession period.
    6 Sep 2013, 05:34 PM Reply Like
  • Petrarch
    , contributor
    Comments (1126) | Send Message
     
    This number has a standard deviation of 100,000
    A single number is practically meaningless
    That is why you get revisions
    This number could be 69,000 or 269,000

     

    You don't wnat to do anything on the basis of a single number and neither will the Fed - they will use 3 or 6 month moving average
    Weekly jobless 4 week average is a better guide

     

    P
    7 Sep 2013, 03:08 AM Reply Like
  • Uncle Ben B.
    , contributor
    Comments (9) | Send Message
     
    And just to make sure everyone is on the same page. All of us here know the huge revision to GDP reporting that was just made this prior quarter correct?

     

    If not, I'd suggest you educate yourselves....
    7 Sep 2013, 09:33 AM Reply Like
  • GaltMachine
    , contributor
    Comments (2068) | Send Message
     
    Uncle B,

     

    No one apparently noticed that Q1 2011 was revised to NEGATIVE 1.3%!

     

    The third revision at the time was positive 1.9%. The total slowdown in growth rate from Q4 2010 was over 4% which is frickin freaky outside of a recession. I am not aware of that kind of negative rate of change occurring outside of a recession at a prior time.

     

    So we won't really know what's happening at this moment until a couple of years from now given the standard deviations on these numbers we could be way higher or way lower than we are today.

     

    Jobless claims suggest strengthening but the massive misses in durables, new home sales, and IP suggest weakness. Add the slowdown in corporate profit growth and revenues to the mix and it suggests weakness not strength but we'll know the full truth of it at some point in the future.
    7 Sep 2013, 01:49 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13369) | Send Message
     
    This is similar to the 2007 recession where actual numbers were corrected to show it started a good 6 months before anyone recognized it. The fact it is showing a little may mean reporting is a little better than previous. It is pretty obvious the US is slowing without even looking at the numbers just like 2007. When interest rates rise the economy slows thus the Federal Reserve and Treasury's claims about a strong and improving economy are patently false and any good economist should know it.
    7 Sep 2013, 04:19 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    I suggest you educate yourself. The second quarter number was revised upward due to an international trade report released after the initial estimate.

     

    New data, new estimate.
    8 Sep 2013, 08:53 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    It is obvious that the US is accelerating.

     

    2012Q4: 0%
    2013Q1: 1.7%
    2013Q2: 2.5%
    8 Sep 2013, 09:00 AM Reply Like
  • Broken Clock
    , contributor
    Comments (126) | Send Message
     
    AIP:

     

    You are a voice of reason in this thread, but on this point I am not sure. If there is a large margin of error on GDP and it's a generally noisy data set, how can we ascertain 'acceleration'? If you look at the last dozen quarters rather than the last three, it seems random and unpredictable. I know you are a statistics expert so I'm not doubting you, but can you explain how the determination is made of acceleration vs. temporary effect/oscillation? I'm relatively bullish at present but this is something I've not been able to puzzle out.

     

    Thanks for your informative posts!
    8 Sep 2013, 09:57 AM Reply Like
  • Rope a Dope
    , contributor
    Comments (708) | Send Message
     
    “It is obvious that the US is accelerating”

     

    Liberal in Paris (thanks again Uncle Ben) – GDP appears to be improving but where are the jobs? Where is the investment in business? Why are we on our 3rd Quantitative Easing program (not to mention Twist)? Why do we see a significant decrease in M1 and M2 (lowest M2 level since 1964) money velocity despite the significant increase in M1 and M2 supply (highest levels EVER)? Why are the banks sitting on all this money (at 0.25% interest) the Fed has printed instead of pushing it into this fabulous economy of yours?

     

    Confidence in Obama chart here - http://bit.ly/x0cMMT

     

    Let’s not forget that new accounting measures were put in place as of July 1, 2013 to calculate GDP. I think it will take some time to sort out how exactly this will affect GDP numbers but early indications are the new accounting measures could add 3% to the GDP number. With the government predicting 2.5% (+/_) growth, does that mean the economy would be in contraction if we used the old accounting measures? Economists (non-Liberals) believe we need to see GDP at 3% minimum for hiring to keep pace with job losses and that is with the old accounting measures. We’re 4 ½ years and roughly $10 trillion borrowed or printed USD’s into this recovery and we still can’t create enough jobs to counter losses? Obama and the rest of the Liberals are clueless when it comes to real economics.

     

    Also, government hiring has been increasing over the last few (5?) months and that trend is expected to continue over the next 2 years. Did you know that when the government hires an employee that their salary contributes to the GDP because the BEA views that salary as an expenditure? The same scenario does NOT hold true for an employee of private business. So the government can increase GDP just by hiring more people (using your tax dollars).

     

    The Federal Government is trying to paint a good picture of the economy but if you are a serious investor, you need to take a close look at manufacturing data and consumption numbers. For employment, throw the U3 out the door and look at U6 and labor participation rates. All of the above paints a different picture of where our economy really is and it isn’t pretty. I track over 50 economic indicators and over the last 2 months I see an economy that has finally flattened out from an almost continuous decline over the last 5 years. It’s flat now and I’m not even going to try to predict future direction; I have investment plans for either direction, up or down. I can say I am less pessimistic about the economy than I was just 3 or 4 months ago but optimism is years off, if it happens at all.

     

    Here is a link to the time period when the US economy will finally begin to accelerate to a level strong enough to sustain life - http://bit.ly/17MpVLH

     

    The US economy and financial system are a House of Cards with ‘Kick Me’ signs painted all along the bottom and Obama is wearing steel-toe boots.
    8 Sep 2013, 12:48 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Hi,

     

    I think the quarterly real GDP estimates are pretty reliable after the first or second revision. They don't change much after the first revision unless some huge corporation like Boeing reports its numbers very late. Boeing or a couple of the auto manufacturers can move the GDP number. Boeing by itself can make or break the monthly durable goods figures.

     

    So I am pretty confident the economy is accelerating, but I grant your point. The data is really noisy. And there are a lot of random shocks that long term average out to zero but in the short term can swing a quarterly real GDP. Like hurricane Sandy or a major strike or the Japanese earthquake that disrupted US auto supply network.

     

    My optimism today springs from the ISM reports and the Fed manufacturing surveys and the consumer confidence figures.

     

    Mind you, confidence figures are soft data. I prefer production estimates since what people say and do can differ dramatically. Talk is cheap. Some economists completely ignore the consumer confidence figures (Bob Johnson of Morningstar). But if all the survey data is pointing up, then I think the direction is probably up.

     

    What is strange is the GDP and the employment data over the last several years. As you noted, it does bounce around a lot. And the monthly employment data is really weak. We had a big rebound in housing starts and took over a year before the Federal government reported an increase in construction workers. Makes little sense to me.

     

    Personally I think the samples are too small. And I don't think there is really any penalty for ignoring the government survey. I received a Commerce Department survey as a one man company many years. I never responded. No retribution.

     

    So yes, the monthly data is a like a lit match in a foggy harbor.

     

    Another factor is seasonality. The seasonally adjusted August employment figure is always weak. The fall and winter employment figures are always strong. Ever since the Great Recession it appears the government's seasonal adjustment program (Census X-11) has been failing to adequately adjust for the seasonal patterns.

     

    I am seeing seasonal patterns is seasonally adjusted data. That is not good. In fact, every summer employment growth slows down and then speeds up every fall.

     

    So seasonal adjustments are clearly screwed up. And some day I will call the Bureau of Economic Analysis and ask them about this.
    8 Sep 2013, 04:11 PM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    You make so many errors I don't know where to begin.

     

    The big revision to GDP changes the level of GDP, but has little impact on growth rates. This is because the government is now including services that were previously excluded and services generally do not change dramatically over short periods of time. Short term fluctuations in GDP are concentrated in the production of durable goods and construction, not the consumption of entertainment services such as movies.

     

    As for the claim that the economy has been in continuous decline for five years, that is obviously false since virtually any measure of income, output, government tax revenues, construction, manufacturing, housing starts, employment, etc., is up.
    8 Sep 2013, 08:01 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13369) | Send Message
     
    I am referring to the scaling back of nonfarm payrolls: August Nonfarm Payrolls: +169K vs. consensus +180K, +104K previous (revised down from +162K).

     

    By the way even your Q4 12 to Q2 13 quote is funny because it only improved from Q1 2013. To rid yourself of seasonality its best to compare the same Q year to year. We will see how inflation and Q3 and Q4 pans out. It looks to be tapering down as interest rates rise which makes fundamental economic sense unless the rate rise is to respond to rampant price inflation which I'm not seeing except in 3rd world countries right now.
    8 Sep 2013, 10:44 PM Reply Like
  • move4ward
    , contributor
    Comments (76) | Send Message
     
    There is something strange about the seasonal adjustment. The non-adjusted payroll growth was the highest growth in the last 10 years, but the seasonal adjustment makes it poor.
    7 Sep 2013, 11:43 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    A lot of debate surrounding seasonal adjustments.

     

    The seasonally adjusted employment figures are still showing seasonality with the summer being very poor and the fall and winter being very strong.

     

    I know X-11 works and I believe the program is generating seasonal factors that are too strong for the summer months and too weak for the fall and winter months.

     

    Makes sense given the last recession reached its nadir during the winter. So the program is confusing the business cycle component with seasonality.
    8 Sep 2013, 09:07 AM Reply Like
  • American in Paris
    , contributor
    Comments (5495) | Send Message
     
    Seasonality is removed using the X-11 program. This program uses moving averages. It is quite possible that the program is confused by this outlier called the Great Recession. The Great Recession hit bottom in the January-March 2009.

     

    And now we see X-11 using very small seasonal factors during the winter months. And small seasonal factors push up the seasonally adjusted data during those months.

     

    And so every year now we see very strong in late fall and early winter and really weak growth during the summer and early fall.
    8 Sep 2013, 04:16 PM Reply Like
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