Reclaiming Common Sense

The Jobs Data has been a Battle of Two Data Sets

This Month The Current Employment Statistics Data is the Winner.

The jobs report forecast article "August Jobs Report Forecast: looking Up" noted that we almost stalled during August 2015 The CES data is indicating that we could see a "pop" in the CES private Sector number. The underlying data is pointing toward a surge in hiring in Construction, Mining and Logging (M/L,) Education and Health Services (EHS,) and Professional and Business Services (PBS,) as well as Government, The government hiring will make a sizable difference between the non-farm payroll data and the private sector data. It was stated that "If we grew at the same rate (0.00%) that we did during 2015 then we would only add 85,000 private sector workers this month, using the 2015 seasonal factor. The Annual NSA August to August growth us expected in all sector. The NSA data indicates that there will be growth in all sectors, especially Mining and Logging, Construction, PBS, EHS, and Manufacturing. It was possible that the annual growth could come in at 1.64% and generate a value of 121,000 private sector workers.

The CPS Jobs data painted a different picture.  The SA CPS data indicates that we will report FT job Gains and Part-time Job Losses. The Unemployment level was expected to  fall. We should drop from last August's level of 6.370 million.The unemployment rate should be lower than last August while the Participation rate should be higher than last August. What was recorded and what was reported for August?

The Non-seasonally Adjusted CES Private Sector Worker Growth was flat. This is different from what you heard elsewhere because they reported the seasonally adjusted non-farm payroll data. There were only 4,000 NSA CES private sector workers added this month. This is 33% more than August of 2015  We had 3,000 NSA CES private sector workers added during August 2015. (See what I did there.) It is important to note that the NSA CES private sector worker number was revised down by 36,000.

The seasonally adjusted private sector number rose by 96,000 workers. This is fewer SA CES workers than were added during August of 2015 when 113,000 SA CES Private Sector Workers. It is interesting to not that the original August 2015 number was 140,000. The seasonal factor was the higher than it was during 2015. This means that the number could have been reported higher or lower than it was reported.  It is also important to note that the July data was revised down by 35,000 SA CES workers.

The Current Population Survey Normally records a net loss of full-time and part-time jobs during August. This was the smallest drop since August 2015.  We saw a relatively rare net gain of 3000 full-time jobs. We also saw a smaller than customary drop in part-time jobs at 572,000 jobs trimmed.

We saw a net gain in seasonally adjusted full-time CPS jobs of 328,000. We saw a slight loss of seasonally adjusted part-time jobs. This was anticipated.

Unemployment fell for the eleventh straight August. Unemployment is at the lowest level that it has been during the month of August since August of 1998, 1999, and 2000. If you look at the unemployment rate, non-seasonally adjusted, the August U-3 was 3.8%. You have to go back to August 1969 to find a lower August unemployment rate.

We have 2.2 million more full-time jobs and 96,000 more part-time jobs than we did during August of 2018. This column has discussed how "all" recessions are jobs recessions. We have more combined jobs now than any prior August. That is a jobs expansion not a jobs recession. We are still climbing a "Jobs Mountain." we have 8.9 million more full-time jobs and 2.1 million more part-time jobs than we had during the pre-recession peak of July 2007.

The Unemployment rate is down and the Participation rate is up from August 2018.  Last August we had an unemployment rate of 3.93% and a participation rate of 62.74%. This August we have a participation rate of 63.72% and an unemployment rate of 3.78%.

This month we have another chapter in the "Tale of Two Data Sets" saga. The CES worker data, while at record levels, did not climb as much as anticipated. The CPS data was stronger than anticipated, even though every August we see a drop in the number of total non-seasonally jobs. We have been reducing unemployment levels for eleven August Report periods. Participation is rising. The next article will address how the sector and wage data is doing.

It's the Economy.