Reclaiming Common Sense

We The Second Half of the Jobs Report is the Current Population Survey data. The CPS data is used to calculate the unemployment rate and the participation rate as well as the number of part-time and full-time jobs created and the number of unemployed workers and the workforce population. The seasonal factors used to convert the NSA CPS data to the SA CPS data change from category to category, month to month, season to season, and year to year. Last month we saw 1.1 million full-time jobs lost, NSA, and 1.3 million part-time jobs gained. This data was converted to negligible full-time job losses and 430,000 part-time jobs gained.  

We normally see full-time jobs and part-time jobs added during October recorded. We saw full-time job losses during October 2008, 2009, and 2010, as well as October 2013. We almost always, since 2003, have seen net job gains during October.

We have seen Net Job Losses during October Five of the past Nine Years "reported." The seasonally adjusted CPS jobs data is rarely reported. We should see under 500,000 SA CPS jobs created this month.

We added Unemployed workers during October 2008 and October 2009. We saw Hurricane Ike during 2008. Hurricane Ike created an "Ike Spike" at the pump. Companies started laying off workers or did not fill vacancies. The housing recession gained steam. October was a pivotal month. The good news is that we should see a drop in the number of unemployed workers based upon the data that we are seeing in the weekly unemployment claims report. Will we see a drop in Full-time employment as we did during September as employers hire seasonal part-time workers. Will the people who lose jobs be some of those working two jobs? If they lose one of their jobs they are still employed, even if the job they lose is a full-time job. If they lose a full-time job they will not add to the unemployment numbers if they still have another job. Multiple Jobholders are masking some of the real unemployment woes.

The Data is a Coin-toss - Could the coin land on its Edge? We could see, in theory, no change in the full-time, part-time or unemployed worker numbers.We could see Full-time jobs  drop, again, and part-time jobs gain again. Normally we see some level of part-time job gain, even though it was scarce in quantity during  2006, 2010, and 2013.

The seasonal factors are "all over the place." The seasonal factors have been increasing for the FT CPS data, the PT data, and the unemployment data. The seasonal factor for unemployment numbers was abnormally high last October. We have seen higher seasonal factors for the full-time number and we have seen lower seasonal factors. We have seen much lower seasonal factors for PT jobs and we have seen higher than the seasonal factor being projected here.  We could see a "wash" in full-time jobs lost and part-time jobs created. We could see a spike in participation. We could see a drop in participation. We could see a participation rate higher than 2015 and lower than 2014.

It is unlikely that the authors of the report would convert CES gains into CES losses this close to the election. We know that the final jobs numbers were manipulated during the 2012 election, according to  Forbes Magazine and the New York Post. Not so, said USA Today. It is the silly season. Anything is Possible.

Expect under 150,000 Seasonally Adjusted Private Sector jobs reported as being added.

It's the Economy.

Expect under 150,000 Seasonally Adjusted Private Sector "Jobs" added during October

The monthly Jobs Report, or Employment Situation Report, is one of the most anticipated reports during the course of a given month. Other reports that garner comparable attention include the new home construction data, new home sales data, existing home sales data, and retail sales data. Last month the September Jobs Report recorded weak growth and over-reported the Seasonally Adjusted Current Employment Statistics (CES) private sector  worker data - The "jobs number." We saw part-time job gains offset full-time job losses. We also saw near record levels of people working two jobs for the month of September. We did see a record level number of people working two part-time jobs for the month of September. It was also recorded that there were fewer men working full-time jobs during the month of September 2016 than were working full-time jobs during July 2007. We also found that  eight job sectors saw jobs losses during September and that six sectors still had fewer workers than prior to the Great Recession. The unemployment rate also is being grossly under-reported because the workforce participation rate is significantly lower during the 92nd month of President Obama's than during the same month of President Reagan's Presidency, President Clinton's Presidency, or President George W. Bush's Presidency. We had an effective unemployment rate of between 9.66% and 11.77% during the month of September when the drop of participation is factored into the unemployment rate.

Are we gaining or losing workers and jobs? The jobs slowdown that we are experiencing reared its ugly head during the month of May this year when we lost Seasonally Adjusted Workers. The downturn was first reported in the June jobs report that was released during July. They could have reported private sector worker loss of 15,000 workers during the month of August.  This column will look at the two data sets used to create the "jobs report:" the Current Population Survey (CPS) data that is used to create the unemployment rate and participation rate numbers and the Current Employment Situation (CES) data that is used to create the official "jobs" number.

October Can Be a Worker Loss Month during Recessions.  The non-seasonally adjusted (NSA) CES data shows that we can lose workers during the month of October. We lost workers during October of 2001 , 2008, and 2009. We also saw worker contraction during October 1989. 1990, and 1991.  These reductions in workers were not able to be seasonally adjusted into worker gains during 1990, 19912001, 2008 or 2009. NSA CES worker gains were turned into losses during October of 200 and slight worker losses during October 1989 were turned into gains.

We are seeing slower worker growth than we saw during 2011, 2012, 2013, 2014, and 2015. If you look at the changes in workers during the course of a running year you will note that we start every year "in the hole." We tend to add workers, non-seasonally adjusted, through August. We tend to see a dip during September, as we did this past month. It was reported as a gain because the value reported in the media, at large, is the seasonally adjusted data.Notice that during 2001, 2002, and 2008 that we were struggling during the months of July and August to maintain the annual worker gains. Right now we are seeing better worker growth than we saw during 2007 and 2010.

The Seasonal Factors Used to create Seasonally Adjusted Data FACTs. Last month the seasonal factors used convert September data showed a steady upward course. The seasonal factors used to convert the NSA CES data during October show a roller coaster of values. The range over the past twenty years have been range bound between 0.994 and 0.995. When inappropriate seasonal factors are used to convert the NSA data to the SA data FACTs (False Assertion Considered to be True) are created. If we use the growth ranges and the seasonal factor ranges we can create a table of possibilities for the NSA CES growth that could be recorded and the SA CES growth that could be reported.

October Surprises can Happen with Regard to the Employment Situation Report.  We have been experiencing October Surprises in the Presidential Election with the release of the "Billy Bush-Donald Trump" tape and the disclosure of the 650,000 emails on a non-secure computer of Clinton Aid Huma Abedin. It is possible to record NSA CES gains or losses during October. We normally see less than 0.40% worker growth between September and October recorded. We have seen slower than usual NSA worker growth, month to month, and same month year to year, than we have previously recorded during prior years. If we see growth less than 0.34% then we should record and report worker losses. We should not see growth comparable to last October.

If the data is adjusted as anticipated we should see a value reported under 150,000. If we see NSA CES growth comparable to 2012, 2013, or 2014the  highest vale reported should be between 74,000 and 233,000. Expect a Number under 140,000.