The most recent Employment Situation Report exceeded expectations, finding an increase of 163,000 jobs in July. However, both the unemployment rate and the broader U-6 measure of unemployment, which includes discouraged workers and the underemployed, rose a skosh to 8.3% and 15%, respectively.
The good news is that there was an increase in jobs. The bad news is that the size of the increase, on par with the average monthly increase in 2011, isn’t even keeping pace with the natural increase and isn’t nearly high enough to see the unemployed going back to work.
In other words expect both sides of the aisle to spin today’s report their way but the facts of the case are that there are a lot of people out there getting desperate, there are few prospects for that changing to the positive soon, and there’s little reason to rejoice.
Update
ZeroHedge says the ESR is a “jobs” report:
Happy by the headline establishment survey print of 133,245 which says that the US “added” 163,000 jobs in July from 133,082 last month? Consider this: the number was based on a non seasonally adjusted July number of 132,868. This was a 1.248 million drop from the June print. So how did the smoothing work out to make a real plunge into an “adjusted” rise? Simple: the BLS “added” 377K jobs for seasonal purposes. This was the largest seasonal addition in the past decade for a July NFP print in the past decade, possibly ever, as the first chart below shows. But wait, there’s more: the Birth Death adjustment, which adds to the NSA Print to get to the final number, was +52k. How does this compare to July 2011? It is about 1000% higher: the last B/D adjustment was a tiny +5K! In other words, of the 163,000 jobs “added”, 429,000 was based on purely statistical fudging. Doesn’t matter – the flashing red headline is good enough for the algos.
As I’ve pointed out before there’s ample reason to believe that the Birth/Death adjustment needs recalibration. It may be that the seasonal adjustment is out of whack as well.
Is ZH still stating that the B/D numbers are a straight add-in?
Can’t read it, gotta go, but ZH has been getting how that is used wrong for a long time now.
If most of the assumptions of a theory are found to be questionable, should the theory also be questioned? Have any of the equations that use LIBOR been modified? Rigging LIBOR is not an aberration. The assumption that the numbers are not being manipulated is amazing.