Reclaiming Common Sense

Great Sector Data - Workers up in 10 of 11 Sectors versus January 2017

The January Employment Situation Report, or Jobs Report, was released this past Friday. There was a considerable amount of data to digest. The Current Employment Statistics (CES) worker data saw considerable revisions, mostly to the data from 2015 through 2017. These revisions created a surprise. The Current Population Survey data was unchanged for the same period of time. The surprise here was the dramatic upward revision to the workforce population value.  This upward revision negatively impacted the workforce participation number. So far three articles have been written:

  • "January Jobs Surprise" details how the Seasonally Adjusted (SA) Private Sector Workers data could have been reported up 452,000 workers, instead of the 196,000 that was reported.
  • "Seriously Strong CPS Data" detailed how we had one of the best January reports since 2003 with minor drops in non-seasonally adjusted full-time and part-time jobs and a minor uptick in unemployment. This is normal to see drops in jobs and drops in workers, non-seasonally adjusted, during January. It is one of the reason that the data is seasonally adjusted.
  • "Five Presidents after 12 months: Jobs" compared President Trumps data to Presidents Reagan, Clinton, George W. Bush, and Obama. President Trump and President Clinton had great first years - each adding approximately 2.3 million jobs. President Clinton added 2.3 million net part-time jobs and President Trump added a net 2.3 million full-time jobs.

The data can be examined a number of different ways. One way is to examine the sector data. Here's the problem - the seasonally adjusted data was revised back to 1990. There were minuscule changes in the NSA CES data between 1990 and 2014. The data for 2015-2017 was revised in both data sets.

Non-seasonally adjusted workers are up over January 2017 in all sectors except Information technology. Only Government and IT have fewer jobs than January 2009. Construction and Manufacturing, though, have fewer workers than they had during January 2007. Even the Government sector has added 209,000 workers since 2007.

The date from 2015 was revised lower - bumping the values for 2016. The data from 2015 was revised down 53,000 workers while the 2016 data was revised up 106,000. This means that if the 2015 was left untouched the 2016 values could have improved by 159,000 workers. Seasonally adjusted it went up 112,000 from the December values for 2016.

The data from 2017 was bumped up 212,000 workers - borrowing from the January surge. The seasonally adjusted data for 2017 was revised up by 247,000. This borrowed 247,000 from the January data. We could have seen a number of well over 440,000 workers as the headline number.

The biggest gains have been in three sectors. We have seen the most workers added in the Professional and Business Sector, the Leisure and Hospitality Sector, and the Education and Health Sector. This has been an incomplete recovery.

When the employment situation forecast article was released there was a comment that we needed to watch the revisions to prior data and the seasonal factors used. Those concerns now seem well founded. The jobs and worker numbers are rebounding.

It's the economy.