Friday's Jobs Report
Last edited Thu Sep 6, 2012, 06:09 PM - Edit history (2)
The Bureau of Labor Statistics monthly employment report come out early Friday morning.
The BLS report contains two numbers that are derived differently—jobs added or lost, and the unemployment rate. Those two numbers do not always agree with each other, and the BLS report does not always agree with other statistics. In the long run all the different measures of the economy align with each other, but on a month-by-month basis there is a lot of statistical noise.
Given what we know today, there is no reason to expect a bad August jobs report. The ADP employment report showed a much greater-than-expected increase in payrolls in August. The ADP report is not always a good predictor of the important BLS report, but it is correlative with the BLS report and was pretty accurate in July.
Initial claims for unemployment insurance are not unfavorable. August ISM Non-manufacturing index was at 53.7%, up from 52.6% in July. The employment index increased in August to 53.8%, up from 49.3% in July, which is a good jump. The last Fed "beige book" was fine. Moderate growth with no areas of contraction.
Gallup's U.S. unemployment survey, a private version of the BLS household survey, is 8.1% for the month of August, down slightly from 8.2% for July.
And things connected to the start of the school year might keep the public sector jobs figure at least neutral. (The ongoing contraction in public sector employment has been slowing the last several months, suggesting that states have cut about all they can for the time being.
Market expectations for the BLS report Friday were for a headline number of 125,000 jobs added. I don't know how much the concensus might have moved during the day, in light of new data. I will predict 155,000 and the unemployment rating dropping to 8.2%. (And a decent stock market reaction.) It is, however, not impossible to see 200,000 and even for the rate to drop to 8.1%. Because the unemployment rate is based on a survey of households it is also possible for the rate to go up despite a very good jobs-created number. (That's what happened in July.)
As always, an excellent source of economic data with responsible commentary is:
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