Reclaiming Common Sense

The monthly employment situation report, or jobs report, is released the Friday after the Wednesday ADP Payroll report. The headline ADP number is the seasonally adjusted private sector job creation number. The headline jobs report number is the seasonally adjusted non-farm payroll, Current Employment Statistics, CES< worker number. Different data sets measure different economic indicators. The non-farm payroll data includes the private sector data plus the government sector worker additions, or subtractions, from last month's data. A second data set is used to create the "jobs report, and that is the Current Population Survey (CPS) data. The CPS data measures the workforce population, the number of full-time jobs, part-time jobs, and unemployed workers. The unemployment rate and participation rate are calculated using the CPS Data. There are a number of components that are receiving a considerable amount of attention, including, and not limited to, teen unemployment, female unemployment, Hispanic and African American Unemployment, Workforce Participation, and Wages. All of the CES data and all of the CPS data, except population, have seasonally adjusted (SA) and non-seasonally adjusted (NSA) components that differ by month, season, and year due to differing seasonal factors.

What was expected? This column produced an ADP forecast article and a Jobs Report article. The ADP forecast was for seven of ten sectors of the ADP payroll data to add workers month to month and for all sectors to add workers October to October. There was the possibility that all sectors could add to their payrolls month to month. All Sectors did add seasonally adjusted workers to their payroll month to month and October to October. The Jobs Report forecast went into the same detail and more.

  • Month to month all sectors should have added NSA workers except Leisure and Hospitality (LAH, and Manufacturing.
  • October to October all sectors except possibly Information Technology (IT,) should have added workers
  • The Current Year data is tracking better than 2016 and 2017, even with the upward  January revisions of the 2016 and 2017 data. This year is tracking with 2015 for worker additions. The current year seasonally adjusted growth indicates a "floor" of 200,000 private sector jobs.
  • Seasonally adjusted growth was expected in all sectors except government. Month to month there was the possibility of 200,000 to 300,000 workers being added to the private sector.  Annual, or rolling year growth, indicated that we could see 186,000 to 275,000 workers added. The question was how much the prior month data would be revised. If it is revised higher by 40,000 that would "borrow" 40,000 from October.  A value between 146,000 and 235,000 could be expected for the private sector. A value between 205,000 and 235,000 was expected.
  • The was an expected spike in full-time jobs and a possible spike in part-time jobs this month, non-seasonally adjusted
  • It was expected that both the FT and PT data would be seasonally adjusted to net losses.
  • It was expected that Unemployment would fall NSA and spike SA.
  • Multiple Job Holders were expected to grow with a peak level achieved either during October, November, or December.

What was recorded (NSA,) and what what reported (SA,) was spooktacular.

All Sectors added Workers this month, non-seasonally adjusted, except Leisure and Hospitality. The largest gains were in Mining/Logging, Professional Business Service (PBS,) Education/Health Services (EHS) and Manufacturing. All Sectors, Except information Technology added workers October to October, and IT only contracted by 8,000 workers. There were 614,000 NSA Private Sector Workers added to the economy this month. There have been 2.55 million NSA CES private sector workers added since last October.

All Sectors added workers added seasonally adjusted workers this month. Only IT saw a drop seasonally adjusted October to October. There were 246,000 private sector workers added this month and there have been over 2.5 million SA CES private sector workers added since October of 2017.

The headline number could have been reported higher than it was reported. The NSA Private sector data was revised up by 5,000 for August and for September. The SA CES private sector data was revised up by 13,000 for August and September. This means that 259,000 SA CES private sector workers have been added to the economy since last month. They also used a different seasonal factor than they used during October of 2016 and October 2017. It should have been reported another 4,000 workers reported as being added to the economy. That boosts the number to 263,000.

The Current Year Data, non-seasonally adjusted, stands at 2.097 million private sector workers added. Remember hat there were massive revisions to the 2016 and 2017 data between the December 2017 jobs report and the January 2018 jobs report., to the tune of 450,000 workers divided between the two years. If those 450,000 workers were added to 2018 then we would have already added 2.547 million workers. We had added 2.446 million as of October 2014. How high can the data spike next month?

We saw non-seasonally adjusted growth in both the full-time and part-time job numbers. The Current population Survey, CPS, or Household data, is different from the CES or Establishment data. "Every year," except last year, we have added part-time jobs during October. We have seen a fairly equal number of years, since 19799, where we have either added or lost FT jobs. We have had 24 Octobers where we have lost NSA FT jobs and 16 years where we have added NSA FT jobs. This was solid CPS Jobs data.

Unemployment, surprisingly, grew both Non-seasonally and Seasonally adjusted. The NSA U-3 data grew by 5,000 workers. It was thought that this could happen, and that it wouldn't happen. More people are saying that they are out of work and are looking for work this month than last month. As anticipated, the SA U-3 rose by 111,000.

The Participation Rate has risen since last October, and the Unemployment rate has dropped since last October.  This month the participation rate came in at 62.95% while the u-3 unemployment rate came in at 3.54%. The participation rate last year was 62.83% and the U-3 rate was 3.89%. So this means we are at "full-employment," right? Wrong. The NSA U-3 rate was 3.61% during October 2000. The participation rate that month was 66.86%. The participation rate was nearly 4% higher during 2000 than it was this month.

The Multiple job worker number broke back through 8 million. The number of NSA MJH grew from 7.670 million to 8.093 million. This is not the highest level of MJH workers that we have recorded during October. We may see this number grow each of the next two months. We saw a jump recorded  in the number of people working a primary FT job and secondary PT job, a larger spike in those working two part-time jobs, and a slight drop in the number of people working to full-time jobs. There will be more detail given in the Multiple Job Worker Article.

There is plenty of analysis yet to be done. We have seen a increase in October weekly wages. That will be covered in more detail in the "Wages and Workers" article. We have seen a rebound in the Jobs Mountain. This will be address in the "Five Presidents" article. This column will also publish an article on the "War on Women" series and the "Aging Workforce" series. This was a solid jobs report.

It's the economy.