Employment in April normally picks up and Gallup surveys show a drop in the unemployment from last month not seasonally adjusted. However, by applying the seasonal adjustments the BLS uses for April it suggests the BLS may report an uptick in the unemployment rate from 8.2% to 8.5%.
Please consider U.S. Unemployment Provides Mixed Picture in Mid-April
U.S. unemployment, as measured by Gallup on a preliminary basis without seasonal adjustment, declined to 8.2% in mid-April from 8.4% in March. However, the government's likely seasonal adjustment of 0.3 percentage points leads to a Gallup seasonally adjusted U.S. unemployment rate of 8.5% in mid-April, up from 8.1% last month.
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Applying the government's seasonal correction factor from April 2011 (+0.3 points) to the current mid-April data yields a seasonally adjusted estimate of 8.5% unemployment, up from March. This is much higher than the 7.9% seasonally adjusted monthly low for Gallup's U.S. unemployment rate, seen in January of this year. If it holds, it could also indicate a significant reversal in the recent downward trend of the government's seasonally adjusted unemployment rate.
Regardless, Gallup data show that unemployment is far below year-ago levels. April's preliminary unadjusted unemployment rate is down 1.2 points from April 2011 and the adjusted unemployment rate is down 1.3 points year-over-year.
Overall, it doesn't seem as if the downward trend in the seasonally adjusted unemployment rate is continuing to gain momentum, at least as of mid-April. That is, the improvement in the job situation is not as strong as last year's seasonals imply is needed to maintain the downward momentum in the unemployment rate. This is consistent with the current modest rate of overall economic growth. It also leaves the unemployment rate exposed to further increases if the U.S. workforce grows substantially in the months ahead because job growth may not accelerate.
Big Discrepancy in Alternate Measures
While the base unemployment number between the BLS and Gallup is converging, for now, alternate measures of unemployment that include part-time workers seeking but not finding full-time work are not.
Gallup reports 18.1% underemployment, while the BLS has the number at 14.5%.
Because of disability fraud and middle-aged job seekers going back to school, I think the base unemployment figures of 8.2% to 8.5% by Gallup and the BLS are on the low side by at least a point.
From the standpoint of workers covered by unemployment benefits, the number is even higher. Please see Trends in Nonfarm Employment, Civilian Employment, Weekly Unemployment Claims for a discussion of "covered employment" and demographics.
Yesterday the US Census Bureau reported retail sales rose 0.8% in March. Is that what happened?
Charles Biderman, President & CEO TrimTabs Investment Research, has no faith in the number. Here is a video explaining why.
Biderman says Ignorance is Bliss Regarding Economic Data
Ignorance is bliss, particularly when it comes to US government economic data. The latest bad joke occurred this morning when the US Census Bureau said retail sales rose 0.8% in March.
And the financial press reported that 0.8% sales increase as gospel showing once again how totally ignorant the media is when it comes to reporting economic numbers put out by the US government. The AP headline was that US retail sales in March rose 0.8%, helped by job gains. The Wall Street Journal online site reported not only that U.S. retail sales rose 0.8% in March, but also that Americans spent more on autos.
Really? This is garbage reporting of the worst sort. Why? Well first let us look at the actual Census Bureau press release, which is entitled Advanced Monthly Sales for Retail and Food Services March 2012. Lower down the press release explains that the advance estimates are based on a subsample of the Census Bureau’s full retail and food services sample.
What is a subsample? Would you believe in this broadband world that what is reported as a hard fact by the financial media morons, is based upon a mailed, snail mail, survey to 5,000 retailers and the mailed back response?
Let’s see, the US Census Bureau mails surveys to a mere 5,000 retailers and from the responses mailed back guesses at the fraction of a percent change in month to month retail activity. Wow! One would think that the Census people never heard of credit, debit and cash cards. Actual cash is much less than 10% of sales these days and I would rather have all the credit and debit card data than a survey of 5,000 outfits, wouldn’t you? Believe it or not, Master Card and Visa sell their data to the public and I am sure all would give summary data to the government, if asked.
But no, the US government agencies, which also include the Bureau of Labor Statistics and the Bureau of Economic Analysis, in their infinite wisdom ignore available real time data.
My solution is very simple. Fire all the government economists and disband the BLS, BEA and Census Bureau. Instead hire me and give me enough clout to get real time data from master card, visa and all the plastic folk and I tell you what the consumer is doing in real time. Also if I was allowed to mine the withheld income and employment taxes sent daily to the US Treasury I could tell you how many people are working and how much they are making in real time.
But no, the government reports garbage and the morons in the financial media report that garbage as hard facts! The fault is not really with the reporters. Rather it is their editors who are to blame.
The globe is in a real time mess. Global trading is in real time. Yet, the financial markets trade in real time data on the US economy that is based upon surveys and guesses. Am I missing something, or is this just plain nuts?
It's Just Plain Nuts
To answer the question, it's just plain nuts. Moreover, I consider Biderman's proposal a mere down payment on what needs to happen.
In addition to getting rid of the BLS, the BEA, and the census bureau, we also need to get rid of the Fed, the department of energy, student loans, crop subsidies, the small business association, Davis-Bacon, prevailing wage laws, collective bargaining, and all sorts of other programs that at best accomplish nothing at tremendous cost, and in most cases do further economic damage because of graft, inefficiencies, and bad reporting.
Mike "Mish" Shedlock