Unfortunately, the headline went down the Google News memory hole before I thought to capture it in a link, but I do it justice with:
Stocks Up on Improved Jobs Data
Across from this superficially unremarkable headline on the right margin were that day’s stock market results: the DOW was up 0.26% – noise, essentially. The broader indices were down. Sooo – come again? One narrow measure – the DOW only includes 30 companies – is up an insignificant amount, while broader indices – the S&P track something over 500 companies, the NASDAQ several times that – are down. So, basically, as stated without any caveats, that headline is what we used to call in simpler, more primitive times, a lie.
Then you start digging around. What job data are we talking about? The government calculates employment numbers by doing a statistical projection based on samples of businesses and households. In this latest report, it is stated that businesses reported 110,000 new jobs came into being, yet, in the same report, the number of unemployed dropped by 456,000 – um, did the extra 346,00 die, retire, move to another country? Or just stop looking for work and thereby drop out of the statistics? Inquiring minds would like to know.
But that’s only mildly baffling compared to what comes next:
Total employment rose by 873,000 in September, following 3 months of little change. The employment-population ratio increased by 0.4 percentage point to 58.7 percent, after edging down in the prior 2 months. The overall trend in the employment-population ratio for this year has been flat. The civilian labor force rose by 418,000 to 155.1 million in September, while the labor force participation rate was little changed at 63.6 percent. (See table A-1.)
Okay – so, businesses can add 110,000 jobs, while people find 873,000 jobs… At the very least, this calls into question the methodology used to collect data and calculate numbers. And that kind of gob growth would be expected in a booming economy – which, last I checked, isn’t what we have.
If you read to the end of the linked report, you will also find that the last half is corrections to previous reports – in other words, it is taken for granted that these snapshots for the previous month will get revised once more data is available. Stay tuned.
Further bulletins as events warrant.