From The Atlantic: The Jobs Report Is Probably Wrong, So Let's Look at the Last 20, to Be Safe

[Julian Englis]

Every number in today's jobs report is almost certainly wrong. Every single one.

That's not an indictment of the Bureau of Labor Statistics. It's just the nature of statistics. The numbers you've seen quoted in every analysis of the jobs report today will change, possibly dramatically, over the next 60 days. "Over the past three years, the employment report has understated how many jobs were created by as much as 99,000 and overstated it by as much as 86,000," Zachary Goldfarb writes in the Washington Post. That means we might have created anywhere between zero and 200,000 jobs in August.

With the knowledge that this jobs report is probably wrong, I collected and summed up the last 20 jobs reports, going back to the beginning of 2011, to get a clearer sense of things. Over the last year and a half, this is what a perfectly typical jobs report would look like:

"Last month, we created about 140,000 jobs. Government shrunk by 17,000 workers. Health care added the most jobs -- about 24,000, followed by food services. Mining and logging grew the fastest, followed by food services. Construction and retail were basically flat."

More at:
http://www.theatlantic.com/business/archive/2012/09/this-jobs-report-is-probably-wrong-so-lets-look-at-the-last-20-to-be-safe/262118/

[abumbyanyothername]

1. Truth:

"The BLS today reported a gain of 96,000 in nonfarm payrolls. That compares with a gain of 252,000 in the actual, not seasonally adjusted number. August is usually an up month. Last year the NSA gain was 240,000 in August. In 2010, it was just 71,000. The 10 year average gain for August for 2002 to 2011 was 78,000. Even the roaring bubble years of 2005 and 2006 did not have August gains as large as this year". ".

[ArizonaLib]

3. That's good information

I wish the Obama campaign and surrogates could communicate this in a consummable manner when the reports come out, or even before to establish reasonable expectations. Watching the media hacks, including on CNBC this morning talk about unmet expectations made me crazy this morning. I could see 100,000 as a psychological measure, but no expectation rational was ever communicated.

[abumbyanyothername]

4. More from the comments thread on the linked article:

Essentially, the official seasonal adjustment is overcompensating for typical increases in construction jobs during the summer.

Since construction employment is way, way down, their standard seasonal adjustments are flawed in the current environment.

[Julian Englis]

6. great point

Thanks! I feel smarter already!

[ArizonaLib]

2. The ADP report said 200,000 jobs were added

On Thursday, ADP said that 200,000 non farm jobs were added in August. It makes sense that the BLS would be behind in their estimates - ADP gets their information faster, and if job addition trends are on the rise, we canut expect BLS to adjust their numbers to a higher point as numbers finalize. Also, if the auto manufacturing is approaching maximum capacity (plants have increased to 3 shifts over the summer, when they usually shut down), and housing prices have been increasing over the recent quarters, I would expect that a boom in the economy is near, despite economists being so tepid about forecasting the comeback prior to 2014. The Fed is expected to take more action, but are they prepping for more action because they expect the economy to stale out, or because they are taking their responsibility for reducing unemployment, or because they expect Obama to run the economy better than Romney, or does the Fed want to promote media attention toward a stale economic outlook to support a Romney victory? The Fed is littered with current and former corporatists. In 2008 wall street supported Obama because they had more confidence in him than McCain. Now that he has stabilized the system, they want to support someone else like Romney who will allow them to return to exploiting the system.

[Julian Englis]

5. Thanks, AZ Lib

Important stuff. There are many smart folks here, such as you. Strong work!

[AdHocSolver]

7. This is comparable to determining climate change by studying hourly temperature changes.

You want to gauge employment in America?

Go visit your local retailers and tally the countries of origin for the everyday goods offered for sale such as clothing, shoes, appliances, furniture, tools, hardware, cooking utensils, cameras, phones, computers, entertainment equipment, and more.

Then compare the number of "Made in the USA" items with the number of imported items.

This comparison will tell you all you need to know about the state of employment in the U.S.

[Jim__]

8. "Every number in today's jobs report is almost certainly wrong. Every single one. "

Every number in today's jobs report is almost certainly wrong. Every single one.

That's not an indictment of the Bureau of Labor Statistics. It's just the nature of statistics. The numbers you've seen quoted in every analysis of the jobs report today will change, possibly dramatically, over the next 60 days. ...

Whether or not that's an indictment of the Bureau of Labor Statistics depends on what he means by wrong. Statistics are a form of estimation (estimating population numbers based on samples) so, the numbers are not exact, and, over time, more information leads to a better estimates of what actually happened. However, the numbers should be approximately correct. If they are consistently, or frequently, not approximately correct, then that is, indeed, an indictment of the Bureau of Labor Statistics.