Exceptable Jobs Report [sic]

Michael Panzner
updated | Author's Website

Today’s jobs report — really good…except for the fact that:

1. Full-time jobs (that is, the kind that offer benefits and which represent a genuine commitment by employers) only accounted for a fraction of the increase in employment

“Final Nail In Today’s NFP Tragicomedy: Record Surge In Part-Time Workers” (Zero Hedge)

It appears the record surge in people not in the labor force is not the only outlier in today’s data. For the other one we go to the Household Data Survey (Table 9), and specifically the breakdown between Full Time and Part Time Workers (defined as those “who usually work less than 35 hours per week”). We won’t spend too much time on it, as it is self-explanatory. In January, the number of Part Time workers rose by 699K, the most ever, from 27,040K to 27,739K, the third highest number in the history of this series. How about Full time jobs? They went from 113,765 to 113,845. An 80K increase. So the epic January number of 141.6 million employed, which rose by 847K at the headline level: only about 10 % of that was full time jobs: surely an indicator of the resurgent US economy… in which employers can’t even afford to give their workers full time employee benefits. We can’t wait for Mr. Liesman to explain how this number, too, is unadulterated hogwash, and how it too is explained away to confirm economic strength.

2. Not much has changed for those who’ve had the hardest time finding employment

“El-Erian Pours Cold Water On Today’s Jobs Report” (Business Insider)

PIMCO’s Mohamed El-Erian told Bloomberg TV that we need to look beyond the headline numbers:

Long-term unemployment, those who have been unemployed for 27-weeks or longer, that is stuck, stubbornly stuck at 5.5 million again. And second, youth unemployment—unemployment among the 16 – 19 year olds, that is stuck again at 23 percent. So, we should welcome the headline numbers, they are really good, but we should not lose sight that we have structural issues that are not being dealt with. And that’s going to be the question mark. Is this just a cyclical bounce or can this hand off into a secular bounce which the economy needs?

3. Seasonal and other adjustments probably exaggerated the labor market’s underlying strength

“Economists React: Jobs Report ‘Positive in Every Way’” (Real Time Economics)

We would nonetheless caution that January results are dominated by the seasonal adjustment process and therefore we would not rush to extrapolate the rates of gain reported today. For instance, the unadjusted change in payrolls in the month was -2,689,000, which translated into the aforementioned +243,000 after seasonal adjustment. So, it only takes a small miss by the seasonal to inflate the reported seasonally adjusted gain. Such an outcome could be caused by significantly warmer/dryer weather than normal (certainly the case in many areas during the month) and/or an under-estimate of job losses by the “birth/death” adjustment. Although that statistical measure makes a large negative adjustment to the non-seasonally adjusted payroll figure in January (-367,000, or almost 14% of the reported decline in total payrolls), there is no guarantee that it is accurate, and in times of economic distress it could still be understating the “death” of businesses. –Joshua Shapiro, MFR Inc.

[For a bit more discussion on this topic, click here.]

4. Geopolitical, political, and weather-related disruptions (e.g., the Thailand floods) during 2011 likely pushed back some of the hiring that would have taken place earlier in the year

“The Hiring Hare Will Soon Morph Into a Tortoise” (Real Time Economics)

Businesses may have been catching up on their labor needs after they paused mid-year in response to production disruptions from the Japanese disasters and the uncertainty surrounding the debt-ceiling debate in Washington.

Never mind — if the stock market is happy, that’s all that matters. Right?

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