January Payolls Big Miss Again At 113K Below 180K Expected…
Again, as in anticipation of the prior months announcement, the mainstream pundits on the CNBC panel anxiously awaited the release of the highly inaccurate BLS survey data.
Since last months number of 74k was a huge disappointment based on expectations in the 180-200K range, (DeutscheBank had even gone so far as forecasting 250K) the talking heads were not only looking for a large upward revision to last month’s number but a bounce- back to a large number for January as they had dismissed the December disappointment as an anomaly due to the weather.
First off, since each previous month is ALWAYS revised the following month, how about just waiting until there is a more accurate compilation? Secondly, rather than relying on surveys, how about basing the data on real-time facts and figures such as payroll numbers rather than averaged-out statistics from phone surveys. And thirdly, how about not “seasonally adjusting” every number that is released?
Why can’t we simply digest real numbers. Aren’t we all well aware that is is colder in winter and hotter in the summer and at times there is inclement weather. Sometimes the weather affects things and sometimes it doesn’t. Wouldn’t real numbers help to see this rather than always compensating for the seasons? Having real un-manipulated data might make it easier to see the realities. AHA? Is anyone starting to catch on?
So, before I digress, back to the numbers. Again, expectations were to the high side.
- HSBC 171K paid $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars (more on too-big-to-jail corruption later)
- HSBC Gets Small Fine For Terrorist Transactions sorry, I digressed again
- Barclays 175K
- Citigroup 180K
- Bank of America 185K
- Deutsche Bank 200K
- UBS 200K
- Goldman Sachs 200K
- JP Morgan 205K
January Payrolls Big Miss Again At 113K Below 180K Expected, December Unrevised
So much for the hope of either a surge in January jobs, or a massive upward revision in the December print. The January jobs number came out and at 113K, it was a huge miss to the expected 180K, but more importantly, the December number which was expected to be revised much higher was virtually unchanged at 75K, compared to 74K originally.
The unemployment rate, which has become largely irrelevant, dipped to 6.6% from 6.7%, just so Obama can get the brownie points for fixing the economy (for those who still actually believe this headline number).
Wall Street adviser: Actual unemployment is 37.2%, ‘misery index’ worst in 40 years
- Don’t believe the happy talk coming out of the White House, Federal Reserve and Treasury Department when it comes to the realunemployment rate and the true “Misery Index.” Because, according to an influential Wall Street advisor, the figures are a fraud.
- In a memo to clients provided to Secrets, David John Marotta calculates the actual unemployment rate of those not working at a sky-high 37.2 percent, not the 6.7 percent advertised by the Fed, and the Misery Index at over 14, not the 8 claimed by the government.
- Marotta, who recently advised those worried about an imploding economy to get a gun, said that the government isn’t being honest in how it calculates those out of the workforce or inflation, the two numbers used to get the Misery Index figure.
- “The unemployment rate only describes people who are currently working or looking for work,” he said. That leaves out a ton more.
- “Unemployment in its truest definition, meaning the portion of people who do not have any job, is 37.2 percent. This number obviously includes some people who are not or never plan to seek employment. But it does describe how many people are not able to, do not want to or cannot find a way to work. Policies that remove the barriers to employment, thus decreasing this number, are obviously beneficial,” he and colleague Megan Russell in their new investors note from their offices in Charlottesville, Va.
- They added that “officially-reported unemployment numbers decrease when enough time passes to discourage the unemployed from looking for work. A decrease is not necessarily beneficial; an increase is clearly detrimental.”
- Then there is the Misery Index, which is a calculation based in inflation and unemployment, both numbers the duo say are underscored by the government. He said that the Index doesn’t properly calculate how Uncle Sam is propping up the economy with bond purchases and other actions.
- “These tricks, along with a host of other dubious accounting schemes, underreport inflation by about 3 percent,” they wrote, adding that the official inflation rate is just 1.24 percent.
- “Today, the Misery Index would be 7.54 using official numbers,” they wrote. But if calculations tabulating the full national unemployment including discouraged workers, which is 10.2 percent, and the historical method of calculating inflation, which is now 4.5 percent, ‘the current misery index is closer to 14.7, worse even than during the Ford administration.”
• source (with video): WashingtonExaminer.com
However, judging by the market reaction this is hardly what the traders think. (High-Frequncy Trading Algorithms)
Despite Dismal Jobs Report, “This” Is What Just Sent Equities Higher
Ugly jobs report in which not even the spin brigade could find anything to cheer, after even the BLS said the atrocious December print was not due to the weather when it did not revise the December number? No worries: here is what the market is using as a goalseeked justification to send the futures off its post report plunge lows to a level higher than where it was before the report. See if you can spot it:
That’s right – after years of ignoring the impact of the labor force participation rate, suddenly the market trading algos are so concerned about LFP they took the “surge” from the 35 year lows of 62.8% to 63.0% as the all clear signal that they can ignore all the other data in the NFP report and buy.
Another way of seeing this, is the number of people not in the labor force, which declined from an all time record 91,808 to 91,455 – just below the second highest ever.
BLS Revises Historical Job Numbers Higher By Half A Million: A Look At The “Before” And “After”
With the HFT brigade selling then buying, and trying to goalseek an explanation of why this happened after the fact, one key aspect of today’s release that was ignored is that the BLS just revised its Establishment Survey data, in the process changing all historical job numbers. To wit: “Establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors.
Also, household survey data for January 2014 reflect updated population estimates.” As a result of this revision, while the monthly changes were not that dramatic, what happened is that the “stock” level of jobs as reflected in the Establishment Survey rose by half a million as of December 31, from 136,877 to 137,386.
And so all key historic data – from GDP in early 2013 to jobs – has now been revised to reflect a more rosy economy, and instill consumers with even more confidence in hopes they will spend, spend, spend.
• source: zerohedge
1.3 Million People Fall Off Extended Benefits In Past Year
Some food for thought on that blue dot on the chart above… Congress’ failure to extend unemployment benefits for 1.3 million Americans may have forced some who were otherwise content to collect benefits as long as they were able to do so back into the work force, albeit at a much lower paying job than they’d prefer.
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