Outside of the rarified circles of the White House, Wall Street, economists and journalists with great defined-benefits plans, this is the kind of spontaneous publicity that makes people wanna cry.
The new jobs report is out! The new jobs report is out!
The good news is that the stock market thinks the jobs report is very good news.
But that’s not exactly good news is it? South Carolina could fall into the ocean and the market would rally on word the Federal Reserve Bank is ready to extend quantitative easing into another millennia. The next day, the market would move higher as word spread that unemployment ticked down as drowned Carolinians exited the workforce.
The bad news is that once again Wall Street, like Washington, has it exactly backwards.
Wall Street rocketed on the news.
Can you detect when the jobs report came out from five-minute chart above?
New jobs came in for the month at 113,000, while unemployment ticked down another 0.1 percent to 6.6 percent. Economists expected jobs to come in at 180,000 to 190,000. That’s a 68 percent miss.
“Total nonfarm payroll employment rose by 113,000 in January, and the unemployment rate was little changed at 6.6 percent,” the U.S. Bureau of Labor Statistics reported today. “Employment grew in construction, manufacturing, wholesale trade, and mining.”
It’s depressing, but not for the obvious reasons.
It’s depressing because the numbers are wrong in a way that should strike fear and dread into the heart of every honest citizen.
Because they don’t add up. Again.
The government has once again found a novel way to goose the employment numbers so that they say what they really can’t say:
Things are getting better, gosh darn it!
The government accomplished this feat by revising the number of non-farm jobs upward for March 2013 by 369,000.
If you don’t have job creation, apparently, you can just create jobs arithmetically and then hide them in a footnote to a revision*.
I knew immediately upon seeing the labor force participation rate creep up (from 62.8 percent to 63 percent), while unemployment crept down (from 6.7 percent to 6.6 percent) that there was a BIG revision somewhere to the jobs numbers.
“The total nonfarm employment level for March 2013 was revised upward by 369,000 (+347,000 on a not seasonally adjusted basis, or 0.3 percent),” says the BLS in the situation report.
And none of this stops the mainstream media for saying that unemployment has reached a new five-year low.
“Despite last month's sluggish job growth,” says the LATimes, “the nation’s unemployment rate again edged lower, to 6.6% in January from 6.7% in December! That is the lowest since October 2008!! The jobless figure has dropped sharply since October when it was 7.2%!!!”**
Not surprisingly the White House echoed the good news from LA.
“Look, just a couple months ago,” said Jason Furman, Obama’s chair of the White House Council of Economic Advisors, “people didn't think we'd be at 6.6% [unemployment] until the end of this year!!” Furman of course leads the economic tribe that couldn’t get the advance estimate of jobs even nearly right.
He concluded: “We've gotten there already!!!”
It’s almost as if the White House communicated telepathically with the LA Times on the issue.
Of course that would be silly.
I’m sure they just used the phone.
The LA Times of course is listed in the new phone book.
So, things are really gonna start happening now.
*For example I just hid a 352,000 jobs in the sentence above. Question: Can you find them?
** Yes, I added the !!! marks. Question: Can you find them? Answer: Not if you’re an economist. Their estimate would be off by 68 percent.