The September Jobs Report will be released this Friday. There are two things to which this column will pay special attention: The Revisions to the July and August Data and The Seasonal Factors used to convert the non-seasonally adjusted data to the reported seasonally adjusted data. Last month a seasonal factor that had not been used since 1990. The data that was reported could have been reported as a job loss. The seasonal factor used made the difference. What should we expect this month?
We lose Current Employment Statistics (CES) Workers Every September. Every year since 1998 we have lost non-seasonally adjusted workers during the month of September. We also lose non-seasonally adjusted Current Population Survey (CPS) Jobs most years, as was detailed in the September Jobs Forecast Column "September Should Be a Job Loss Month."
We normally only "officially" lose September "jobs" during recessions.The official number is the seasonally adjusted CES number. These are not jobs, they are workers. The CES data can double count people who are working two jobs. The CPS and CES databases have different sample sizes and different sources so the two should not be directly comparable. The problem is that the government does not publish the seasonal factors for the CES or CPS data in advance of the monthly report. They can manipulate the seasonal factors to make the numbers just believable enough that most people will not question the data.
The Seasonal Factor has been creeping upwards for years. If you multiply the seasonal factor by the non-seasonally adjusted data you obtain the seasonally adjusted data. The seasonal factor has been creeping up for the month of September since 2008. The seasonal factors have been increasing from all-time highs since 2011.
What Difference does a difference of a factor of 0.0009 make? How does 114,000 workers sound? If we use the seasonal factor from 2012 is used (0.9966) and the NSA CES number drops by 0.41% we would lose 7000 workers this month. If the highest ever seasonal factor for September is used (0.9975,) then the job gain would be 107,000
We are going to lose workers this month - What will happen to last month's numbers? The SA CES number was 122,385,000. If we reported a value of 122,488,000 then the SA CES Private Sector Worker growth would be report an addition of 103,000 (if we contracted at 0.37% and used the seasonal factor from 2014.) If that SA CES number for August is revised down by 100,000 and we add 103,000 from that level we would only be adding a net 3,000 SA CES workers. This is how we took 37 steps back and 38 steps forward during May of this year. We could revised down the August by 100,000 jobs and add 103,000 from the advance value and report a gain of 203,000 from the "preliminary" value.
Down is Up. We will record worker loss and report worker gains, unless the economy is as weak as it appears.
Watch the data revisions. Watch the seasonal factors..
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