Seasonally Adjusted Jobs and Workers Should Rise.
Unemployment Should Fall Seasonally Adjusted or Not.
The monthly jobs report is created using two data sets that are rarely in sync: the Current Population Survey (CPS) jobs and unemployment data and the Current Employment Statistics (CES) wages and workers data. Each data set is seasonally adjusted with seasonal factors that change month to month, season to season, and year to tear. They are seasonally adjusted because January and September are "unbelievably" bad, non-seasonally adjusted, and March, April and May are "unbelievably" good, non-seasonally adjusted. Some months down is up. This is one of them..
Unemployment will fall this month. The same month CPS data for the U-3 unemployment level has recorded a drop in unemployment levels during September every year since 1979 except once, September 1986. The seasonally adjusted unemployment level should drop, too. Will it drop by 300,000 or 600,000 or 800,000 non-seasonally adjusted? It may drop 300,000 to 800,000 workers this month, seasonally adjusted.
We will see a non-seasonally adjusted drop in full-time jobs and a non-seasonally adjusted gain in part-time jobs. It is very possible that we will see more part-time jobs added than full-time jobs lost. The month to month changes in full-time jobs and part-time jobs is rarely this clear. We have had net job gains during September during the past three Septembers. Could we return to the July all-time, any month, high level of non-seasonally adjusted jobs.
The Seasonally Adjusted CPS Jobs data is less clear. We could see 200,000 or 400,000 or 600,000 or 800,000 net seasonally adjusted (SA) CPS jobs added this month. We added 808,000 SA CPS jobs during September of 2018. What this means is that if the SA CPS data does not grow as much as the SA U-3 unemployment level drops then the SA Participation Rate will fall.
The non-seasonally adjusted Participation rate has been trending higher from September to September. July or August tends to be the peak month for participation, non-seasonally adjusted. This means that the participation rate should drop a little from August to September. January tend to be the lowest participation month of the year. There are a couple of things to remember:
The Current Population Survey is just one part of the jobs report. The CPS data covers jobs and unemployed workers. The next part of the jobs report is the CES worker and wages section.
Summer is Over. Workers should fall month to month and improve September to September. This article started with a discussion of the seasonally adjusted data. September is one of the reasons why the seasonally adjusted data exists. We have lost non-seasonally adjusted workers virtually every September since 1988.
The Non-seasonally adjusted CES worker level is expected to drop between 0.21% and 0.49% between August and September. This means that we could see roughly 273,000 to 641,000 workers leave the workforce during this September. This does not mean that the 'Jobs Streak" is over. The seasonal factor used to convert the NSA CES recorded data to the SA CES reported data has been drifting higher for the month of September since 2008. A higher seasonal factor (SF) will boost the SA CES data that is reported. (The SF changes by sector, month, seasonal and year. All of the changes shape the monthly seasonal factor.) If we use the same seasonal factor that was used during September 2017 then the range of growth could, in theory, range from 47,000 to 414,000 workers. It is more likely that we will see growth between 156,000 and 246,000 seasonally adjusted workers or roughly 201,000 workers.
The annual growth rate was 1.93% this past April and just 1.52% during August. The annual growth rate is projecting growth as low as 37,000 private sector workers. The more realistic level is between 88,000 and 241,000 workers. This is a large range, once again. The more realistic range is 139,000 to 241,000. The overlap is solidly in the 150,000 to 240,000 range, or roughly 195,000. The month to month changes are projecting a slightly high level of seasonally adjusted growth. If the month to month non-seasonally adjusted "growth" is not as weak at it could be, the same month growth rate could be higher than anticipated.
The Current Year data is trending with the 2016 growth pattern. If we grow as much month to month as we did during September 2016, if we do not contract as much as we could, we may see something closer to 298,000 SA CES workers added. The current year data is slower this year than 2016, 2017, or 2018. We normally drop 350,000 to 450,000 private sector workers during September. last year we dropped over 600,000 NSA CES private sector workers. A drop of 450,000 NSA workers equates to a net gain of SA 241,000 workers.
All sectors are expected to grow month to month, seasonally adjusted. Month to month the NSA CES data is expected to grow only for Education and Health Services (EHS,) and Government The largest drops are expected in Leisure and Hospitality (LAH,) Information (IT,) Construction, Financial Services (FIRE,) and Other Services (OS.) All sectors are expected to grow month to month, seasonally adjusted, except LAH and IT. The largest gains are expected in Mining and Logging (M/L) Professional Business Services (PBS,) Construction and Manufacturing.
All Sectors are expected to grow September to September, seasonally adjusted and non-seasonally adjusted. The big question mark is whether Mining and Logging will spike or drop by 8% from the same month last year, non-seasonally adjusted? The largest non-seasonally adjusted gains from last September are expected Construction, PBS, EHS, Manufacturing, and LAH. The largest seasonally adjusted growth are expected in M/L, Construction, PBS, EHS, and LAH. Information (IT) should be question mark, as it normally is. The data indicates otherwise. A spike in Government workers is expected seasonally adjusted an non-seasonally adjusted the number of government jobs added is combined with the private sector number to establish the non-farm payroll number. The NFP number is expected to be higher than the total private sector number. Do not be surprised if the NFP number is over 220,000.
How is the expansion impacting men and women? The article series "The War on (Wo)Men" series has shown that women have added more total CPS job than men since the recession. Women have added more FT jobs than men. Men work more FT jobs than women, Women work more PT jobs than men. Men work more dual FT jobs than women. Women work more dual PT jobs than men. The increase in part-time jobs should mean that the number of women in the workforce will increase this month, and that the total number of women working full-time jobs and part-time jobs may continue, non-seasonally adjusted, through the end of the year. We saw this jobs expansion for women through the end of the year during 2018. Male dominated industries, including Manufacturing and Construction, are supposed to increase September to September, so the normal Fall/Winter decline in men in the workforce may be slightly muted.
The number of multiple job holders (MJH) are expected to jump from the August level and set a September Record. The total number of MJH from 8.038 Million last month to over 8.1 million this month. . The number of FT PT job workers are also expected to rise.The level is expected to go from 4.5lli81 million to over 4.6 million. The PT PT level is expected to rise from 1.95 million to over 2 million and up to 2.1 million, as the number of Part-time jobs jump. We normally hit peak MJH levels during October, November, or December, due to Christmas hiring. How high can we go?
Wages are expected to set a monthly record. The monthly wages and workers article details how each sector sees a different growth rate in hourly wages. Each sector works different levels of hours per work week. When hour wages and hours worker=d both increase from their prior year level we see total wages rise.
How is President Trump doing compared to former Presidents Reagan, Clinton, George W Bush, and Obama? It was during the 1992 election that he phrase "It's the Economy, Stupid" was coined. So far President Trump has added more full-time jobs than any of the prior four two term Presidents. Only President Trump and Former President Clinton added full-time jobs while cutting unemployed workers. How will President Trump compare after month 32? Unemployment is expected to fall to levels lower than under former President Clinton. If there are substantially more part-time jobs are added than full-time jobs are lost we could start climbing the Jobs Mountain, again.
This week we receive the September ADP report and the September Employment Situation Report. Next week we will receive the August Job Openings and Labor Turnover Survey (JOLTS) data. People confuse the Job Openings data, which is closer to the CES data than the CPS data. The U-3 unemployment data is CPS data. The U-3 data is different from the Continuing Unemployment Claims data. One would think that if continuing claims fell month to month, they did, that U-3 unemployment should also fall. This is not always the case. One would think if unemployment falls then jobs would increase. That is not always the case. The CPS and CES data have been out of sync virtually every month this year. The ADP data rarely coincides with the SA CES data because the ADP data is Private Sector Payroll and the NFP headline value includes government workers. The ADP Seasonally adjusted data is looking up. Compare these data sets at your own peril.
The net-net is that Unemployment "will" fall. Part-time jobs "will"rise. Full-time jobs will record a drop. Workers will record a drop. The CPS jobs data should record a jump. The seasonally adjusted Unemployment data should drop. The CES worker data should rise by 200,000 to 240,000 for total private sector and government workers should boost that number. Watch the revisions. If the SA CES data is revised up by 20,000 from last month's level then that will borrow 20,,000 from the September level. A modest 210,000 number could be reported at 190,000. The current year data is very important. The combination and permutations mean that we could see a number between 192,000 and 298,000 if we grow at the same rate we did during 2016 or 2017 and if the same seasonal factors are used.
It's the Economy.
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