Mike Shedlock
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Initial Reaction

Big Miss: Nonfarm Payrolls rose by 113,000. The Median Bloomberg estimate was +180,000. December was revised up a tiny bit from 74,000 to 75,000. Beneath the surface, things actually look better for a change. The household survey shows a gain of employment of 638,000. That said, revisions were in play.

Huge March 2013 Revision

Nonfarm employment for March 2013 was revised up by 369,000 (347,000 on a not seasonally adjusted basis). The benchmark revision incorporates a large non-economic change that resulted from a reclassification of 466,000 jobs from private households (out of scope by CES definition) to services for the elderly and disabled (in scope for CES).

Blaming the Weather

Once again economists were caught totally unaware by bad weather.

MarketWatch reports "The latest report may have been influenced by other unusual factors that render it less reliable as a bellwether of labor-market trends: extremely cold and snowy weather and the government’s annual “benchmark” update on how many jobs were created in the past year. Economists polled by MarketWatch had forecast a gain of 190,000 jobs."

Apparently economists did not realize it has been cold and snowy. Alternatively, they predicted 180,000 to 190,000 jobs even though they knew it was cold and snowy. Which is it?

December BLS Jobs Statistics at a Glance

  • Nonfarm Payroll: +113,000 - Establishment Survey
  • Employment: +638,000 - Household Survey
  • Unemployment: -115,000 - Household Survey
  • Involuntary Part-Time Work: -514,000 - Household Survey
  • Voluntary Part-Time Work: +434,000 - Household Survey
  • Baseline Unemployment Rate: -0.1 to 6.6% - Household Survey
  • U-6 unemployment: -0.4 to 12.7% - Household Survey
  • Civilian Non-institutional Population: +170,000
  • Civilian Labor Force: +523,000 - Household Survey
  • Not in Labor Force: -355,000 - Household Survey
  • Participation Rate: -0.2 at 62.8 - Household Survey
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Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.