Jack Dunn - Reclaiming Common Sense


(Aug 1) "What to Expect from ADP Payroll Report"

(Aug 2) There is so much that happens during the course of the month. What are the articles that the readers of this column read during the course of a month? Four of the "Top Ten Articles of July"  addressed the Jobs Report, three article addressed the housing market, one column was the "Top Ten Article of June" article. one was a week in review column, and one asked if this was a "Retail Ice Age or a Retail Winter."

(Aug 3)  We had the lowest ever first-time unemployment claims data for the final week of July, non-seasonally adjusted. Don't believe me? Read the article

(Aug 4) Jobs, Jobs, Jobs. We added full-time jobs. We added part-time jobs. The unadjusted workforce participation was up for the second consecutive July. Then there were the revisions. The net-net was that this was a solid jobs report. The article "July Jobs Fireworks" was a little late in its release because the seasonally adjusted data for the Current Employment Statistics data was massively revised, which meant that the tables used to project the combinations and permutations of growth and seasonal factors had to be revised.


(Aug 5)The Week in Review


(Aug 7)  How is President Trump doing compared to his predecessors? The article "Five Presidents at Six Months" examines the Current Population Survey (CPS) jobs data and the Current Employment Statistic (CES) worker data and found that President Trump has added over 4.5 million non-seasonally adjusted (NSA) full-time jobs and reduced unemployment at a pace comparable to Presidents Clinton and Reagan. The CES data reveals that President Trump has added more NSA CES private sector workers than Presidents Reagan, Clinton Bush 43, and Obama.This series also monitors the level of "missing participants" and the U-7 effective unemployment rate.

(Aug 8) There was a "war on women" during the 2012 Presidential election the real war was a war on working men. Men lost over 10 million full-time jobs during the recession. The article "Men Finding New Full-time Jobs" details how men have finally returned to the July 2007 level of full-time jobs and added to those level of full-time jobs and part-time jobs. This series has been tracking the U-7 for men and the U-7 for women. Men still have an effective unemployment rate over 10%.

(Aug 9) The story that is not receiving much attention elsewhere is the elevated level of people working two jobs. The Patient Protection and Affordable Care Act (ACA) was supposed to allow people to work fewer hours and still receive health care benefits from their employers. We saw part-time job creation while we were losing full-time jobs, instead. We also saw an elevation of the number of people working two or more part-time jobs. "Record July Level of Two PT Job Workers" details how even though we saw a decrease month to month in the level of people working two part-time jobs, we still set a record for the month of July. The elevated level of multiple job holders (MJH) has lowered the levels of first-time unemployment claims and continuing claims as well as official U-3 unemployment level and U-3 unemployment rate.

(Aug 10) They still publish weekly unemployment claims reports. You wouldn't know this if you watched the news. What used to be breaking news at 8:30 AM on most Thursdays is now an afterthought. "Ignore  Unemployment Claims Level(s) at Your Own Risk" examined the unemployment claims data back to the program's creation during 1967 and found that we have NEVER had a unadjusted (NSA)  First-time Claims Level this low during the first week of August. We have over 80,000,000 more eligible workers than we had at its inception and we have few people claiming benefits.


(Aug 11)  This has been an incomplete recovery. There are thirteen super sectors that are identified in the Jobs Report. Four sectors have not seen their level of workers return to the Pre-recession July 2007 peak number of workers. "July Sector Strength" details how the Health and Education sector, the Leisure and Hospitality Sector, the Trade, Transportation and Utility Sector, and the Professional Business Service Sector have all surged during the past ten years. Meanwhile, Construction, Mining and Logging, Manufacturing and IT have not recovered, as of yet.


(Aug 12)Another Week, Another Week in Review


(Aug 14)  "July Real Estate Forecast" examined the new construction data, the new home sales data, and the existing home sales data.Overall, it was expected that we would see solid starts, under construction and completions data this week and improving July New and Existing Home Sales data.

(Aug 15)  The analysis of the July Jobs Report continued this week with a look at how various age groups are doing with the Jobs Recovery and Expansion. "July: The Aging Workforce" examined the number of jobs . There is an urban legend that the dropping participation rate of the US workforce is due to aging Baby Boomers retiring. It turns out that some of the age groups over 60 are working more than their younger counterparts.

(Aug 15)  The media is obsessed with a "Retail Ice Age." The reality is that there are some sluggish sectors and yet we are on pace for a record year for total retail sales. "July Retail Sales: Continued Strength" details how there were revisions to the prior data, retail sales have not returned to July 2007 levels in three categories, retail sales dropped month to month in eight of thirteen categories, and increased July to July  in eleven of thirteen categories. January through July we are up by more than 4% compared to January to July last year - a record year for retail sales. There is weakness in "bricks and mortar"  stores - there is strength for "non-store retailers."

(Aug 17) This column keeps repeating this message; We have historically low first-time claims data and continuing claims data. We had fewer than 200,000 non-seasonally adjusted first-time claims  recorded this week for the second week of August. This is almost the same level we had during 1967, fifty years ago, when we had over 80,000,000 fewer covered insured. We had under 1.9 Million continuing claims recorded during the first week of August. This is lower than what was reported during the first week of August of  both August 1970 and August 1971. We have "Remarkably Low First-time and Continuing Claims."

(Aug 17) One of the many important economic indicators that is released during the month is the Consumer Price Index.  Last week the data was released with very little discussion. Some categories have seen inflation over 3%. Some categories are experiencing deflation. The weighting of the data has changed from July 2015 to July 2016 to July 2017. "What is the Real July Rate of Inflation?" Is it closer to 2.77% than the official 1.7%?

(Aug 18) The week began with a forecast for the real estate data for the month of July. We received the New Construction data this week. We recorded the best new home starts data for July since 2007. We also saw the best under construction data for July since July 2007 and the best July completions data since July 2007. Best new construction data during the past decade should have been a headline somewhere.  How about "Strengthening July New Construction Data?"


(Aug 19)Week in Review


(Aug. 23)  What is the raw data this month? What was the raw data last month? The first major economic report that was ignored this week was the New Home Sales Report. "July New Home Sales Shows Strength" details how even though there were fewer homes sold this July than during July 2016, we saw upward revisions to the prior months data, plural, and how we are on track for over 600,000 units sold, possibly 620,000, possibly higher. The authors of the report were misguided with their end of year estimate of 571,000.

(Aug. 24) Another major report released this past week was the weekly unemployment claims report. This was a major report because the unadjusted first-time claims number dropped back below 200,000 claims. We had not been under 200,000 claims for any week between June 1, 1974 and September 12, 2015.  We have added tens of millions of covered insured, potentially eligible workers, during that time. We tend to see our lowest level of first-time claims during the final week of September. "Crazy Weekly Unemployment Claims Data" details how if we were using the seasonal factors from the 1960s, 1970s, and early 2000s  that we could have seen a value of 226,000 seasonally adjusted first time claims reported. The only time that we have seen lower non-seasonally adjusted first-time claims this low during the third week of August was during 1967, 1968, and 1969. The article details a similar situation for the continuing claims data for the second week of August. This data is important because it means that we should see a drop in unemployment in the monthly Employment situation report that will be released next Friday. Ignore this weekly report at your own risk.

(Aug. 25) The July Existing Home Sales data was also essentially ignored this week. This column had published a July Real Estate Forecast column in advance of the release of the new construction data, the new home sales data, and the existing home sales data. It was thought, based on prior data that we could see stellar July existing home sales data. This July we sold the same number of homes as we did last July. This is good when you consider that we have an inventory level roughly 10% lower than last year (1.92 million versus 2.12 million.) It is more remarkable when you realize that this is the lowest July Inventory level since 1999. "July Existing Home Sales: Still Improving" details how we are on track for   5.6 million units sold - well above last year's 5.42 million units and comparable to the number of units sold during 2002. The best ever units sold years for existing homes were 2005, 2004, 2003, and 2002.

(Aug. 25)  Next week we will receive the "all-important"  August Employment Situation Report. This is an interesting month because the two data sets that are used to produce the report paint different pictures. The Current Population Survey (CPS) data from 2003 through 2016 reveal that we should trim part-time jobs, add full-time jobs and reduce the number of unemployed workers.  It also reveals that we should see both the non-seasonally adjusted (NSA) participation rate fall and the NSA U-3 unemployment rate fall. We normally see peak Summer participation during July. We could lose more part-time jobs than we gain in full-time jobs. The Current Employment Statistics (CES) data reveals that we normally add workers during  August. The article "August Jobs Report Forecast"  details how we had zero growth during August of 2015 and how that was manipulated to keep President Obama's "jobs" streak alive. This same article details also how we normally have a spike in workers during the August of the first year of a President's term in office, either a first term or a second term. We have seen spikes in workers of 0.15% during 1981, 1985, 1989, 1993, 1997, 2005, and 2013. The "devil is in the details." This could be rephrased to say "the devil is in the seasonal factors." Minor changes in the seasonal factor used to convert the NSA data to the SA data could mean 80,000 fewer workers being reported as being added to the economy. If the data from July is revised upward by 25,000 workers that effectively reduces the August gains by 25,000. Watch the growth rate, the seasonal factor and the revisions.


(Aug. 26) Week in Review: Housing


(Aug. 28) The first column of the week was "Hurricane Harvey Economic." This column, while expressing empathy for the victims of Harvey, detailed how we would not see immediate impacts in the August Jobs Report, or the rest of the reports that cover August, and that we may see huge spike in economic activity due to the repair and replacement of damaged items.

(Aug. 29) Last Friday this column published its "August Jobs Report Forecast" column. The follow-up to that column was "Potential August Surge in People Working Two PT Jobs." We have seen a surge in people working two jobs, especially two part-time (PT) jobs, after the Great Recession. This article detailed how we have had either record or near record levels of people working two part-time jobs each month, for the current month, all year long. It was thought that we might see another record set this month for the month of August even though last August was the all-time record for the month of August with over two million dual part-time workers.

(Aug. 30) How will Houston be impacted by Hurricane Harvey. There is jobs data that can be broken down by city or Metropolitan Statistical Area. The unfortunate thing is that the Metropolitan and State Employment and Unemployment data lags the Employment Situation Report data. "Houston Jobs Pre-Harvey (Part 1)" established the August data through August of 2016. It also reveals the problem with the jobs report data in that the population data is a nationwide estimate of the workforce population and is not broken down by city or MSA.  A second problem is that the census data, even the triennial updates, are not an accurate measure of the population. That said, this column will monitor the unemployment levels and the unemployment rate, as well as the changes in employment.

(Aug. 31) Thursday was a big day for article writing. The monthly GDP report was released on Wednesday. The Monthly ADP report was released on Wednesday. The Weekly Unemployment Claims data was released on Thursday. What used to be the "most anticipated economic data of the week, the weekly unemployment claims report, is now the most ignored piece of data. "Can the Weekly Unemployment Claims Go Lower" details how we have seen some of the lowest first-time claims data and continuing claims data for the current week of the year during the past four decades. This trend has been present for weeks. We saw truly historically low data during the first four weeks of this month for the first-time claims data and the first three weeks, so far, for continuing claims data. The answer is "Yes." First-time Claims continue to slide through September and the Continuing claims data normally bottoms out during the first week of October, non-seasonally adjusted.

(Aug. 31) Last month we received the "Advance" read of the Second Quarter Gross Domestic Product (GDP.) This month we received the "Preliminary" read. "Preliminary Annualized Second Quarter GDP Jumps" Details how the Annualized, one quarter projection for the year, estimate jumped to 3.0%. Three percent is considered "healthy." We have not had an annual, calendar year, growth rate of 3% since prior to the recession. The important thing to note here were the upward revisions to the Personal Consumption Expenditure (CPE) data and to the Gross Private Domestic Investment (GPDI) data.

(Aug. 31) The Wednesday before the release of the Employment Situation Report, the "jobs report," we receive the Private Sector Payroll report from the payroll company ADP. "Best August ADP Report Since 2002" details how we saw strong growth report by ADP. The ADP report and the "Jobs Report" are often in sync for direction and out of sync for magnitude.