Reclaiming Common Sense

This week was focused on two main topics in the media: Hurricane Harvey and the August Jobs Report. This column published a number of articles in advance of the jobs report that made a special effort to clarify that the jobs report data was collected before the hurricane made landfall.

(Aug. 28) The first column of the week was "Hurricane Harvey Economic." This column, while expressing empathy for the victims of Harvey, detailed how we would not see immediate impacts in the August Jobs Report, or the rest of the reports that cover August, and that we may see huge spike in economic activity due to the repair and replacement of damaged items.

(Aug. 29) Last Friday this column published its "August Jobs Report Forecast" column. The follow-up to that column was "Potential August Surge in People Working Two PT Jobs." We have seen a surge in people working two jobs, especially two part-time (PT) jobs, after the Great Recession. This article detailed how we have had either record or near record levels of people working two part-time jobs each month, for the current month, all year long. It was thought that we might see another record set this month for the month of August even though last August was the all-time record for the month of August with over two million dual part-time workers.

(Aug. 30) How will Houston be impacted by Hurricane Harvey. There is jobs data that can be broken down by city or Metropolitan Statistical Area. The unfortunate thing is that the Metropolitan and State Employment and Unemployment data lags the Employment Situation Report data. "Houston Jobs Pre-Harvey (Part 1)" established the August data through August of 2016. It also reveals the problem with the jobs report data in that the population data is a nationwide estimate of the workforce population and is not broken down by city or MSA.  A second problem is that the census data, even the triennial updates, are not an accurate measure of the population. That said, this column will monitor the unemployment levels and the unemployment rate, as well as the changes in employment.

(Aug. 31) Thursday was a big day for article writing. The monthly GDP report was released on Wednesday. The Monthly ADP report was released on Wednesday. The Weekly Unemployment Claims data was released on Thursday. What used to be the "most anticipated economic data of the week, the weekly unemployment claims report, is now the most ignored piece of data. "Can the Weekly Unemployment Claims Go Lower" details how we have seen some of the lowest first-time claims data and continuing claims data for the current week of the year during the past four decades. This trend has been present for weeks. We saw truly historically low data during the first four weeks of this month for the first-time claims data and the first three weeks, so far, for continuing claims data. The answer is "Yes." First-time Claims continue to slide through September and the Continuing claims data normally bottoms out during the first week of October, non-seasonally adjusted.

(Aug. 31) Last month we received the "Advance" read of the Second Quarter Gross Domestic Product (GDP.) This month we received the "Preliminary" read. "Preliminary Annualized Second Quarter GDP Jumps" Details how the Annualized, one quarter projection for the year, estimate jumped to 3.0%. Three percent is considered "healthy." We have not had an annual, calendar year, growth rate of 3% since prior to the recession. The important thing to note here were the upward revisions to the Personal Consumption Expenditure (CPE) data and to the Gross Private Domestic Investment (GPDI) data.

(Aug. 31) The Wednesday before the release of the Employment Situation Report, the "jobs report," we receive the Private Sector Payroll report from the payroll company ADP. "Best August ADP Report Since 2002" details how we saw strong growth report by ADP. The ADP report and the "Jobs Report" are often in sync for direction and out of sync for magnitude.

(Sep. 1) September first seemed to be more like April first this month. The "much anticipated" jobs report, the report that looked like it had the potential for a blockbuster "August after Election Spike" fell flat. "August Jobs Report Better than 2015, 2016" examined the data in more detail than the rest of the media. It was expected that we would have non-seasonally adjusted job losses, non-seasonally adjusted worker gains, non-seasonally adjusted drop in unemployment, and that when the drop in jobs were added to the drop in unemployment that there would be a drop in the non-seasonally adjusted participation rate. The forecast column got that part right. It was not anticipated that we would lose both full-time and part-time jobs, and that the seasonally adjusted jobs data would show net job losses. Don't worry, the Jobs Streak is still "alive" because it is based on the Current Employment Statistics data and not the Current Population Survey Data. The takeaways here are: We have a record level of full-time jobs for the month of August (NSA,) A record level of total full-time and part-time jobs for the month of August (NSA,) and that the NSA workforce participation rate is up for the second consecutive August. Also, the NSA CES private sector worker growth rate is up over July 2017 and August 2016.

This week was a mess, in more ways than one. Harvey ravaged the Gulf of Mexico. The clean-up has just begun. The economic impacts are being seen at the gas pumps. We will see spikes in activity as the recovery moves forward. This column will continue to analyze the jobs report data while the rest of the media obsesses over why Vice President Pence is wearing jeans and President Trump is not or why the First Lady is wearing high heels while boarding Air Force One and comfortable sneakers  when she disembarks.

It's the economy.