Patterico's Pontifications

9/6/2019

Jobs Numbers Kind of Weak

Filed under: General — Patterico @ 7:50 am



Tiana Lowe at the Washington Examiner:

On [its] face, the August jobs report from the Bureau of Labor Statistics doesn’t look too bad for the economy. The economy added 130,000 jobs, missing the 150,000 mark expected by economists. Unemployment is steady at an excellent 3.7%. But buried in the numbers are key details that indicate a fragile economy.

For one thing, 25,000 of those 130,000 jobs are temporary ones created by the government for the sole purpose of the 2020 census. For another, the BLS revised downward the reported employment gains in the already mediocre June and July jobs reports by a cumulative 20,000 jobs. Still, the average jobs gains in the past three months are 156,000 per month, meaning that August constituted a slight but sure drop.

There’s some very good news below the surface, to be sure. The most important metric indicates that while industry may be spooked by President Trump’s trade war, we’re likely not on the cusp of a recession in earnest. The BLS found that annual wage growth has increased by 3.2%, beating expectations, and significantly, the hours worked by all employees and manufacturing workers alike marginally increased.

The New York Times echoes the message that the numbers are mixed:

Paul Ashworth, chief United States economist at Capital Economics, said the headline number in August was “flattered” by the big increase in census hiring. “But even allowing for that, there has been a clear slowdown in trend employment growth, with the three-month and six-month averages both at around 150,000 now, down from about 230,000 a year ago,” he said.

Despite the middling headline number, there were positive signs elsewhere in the report. The labor force participation rate rose to 63.2 percent, from 63 percent, suggesting that workers who had been on the sidelines are gradually being lured back into the labor market. Average hourly earnings increased by 0.4 percent, which is more than analysts had expected. And the length of the average workweek increased after falling in July.

Tariffs are not good. They can’t possibly help an economy. I’m glad there are no signs of recession at this point. We’ll see how long that remains true.

[Cross-posted at The Jury Talks Back.]

16 Responses to “Jobs Numbers Kind of Weak”

  1. The situation now, with the awful press, is the drive to exaggerate any news—-good or bad—-in a fashion that works in favor of the Left, and against those on the Right.

    That is 100% unconnected with the current occupant of the Oval Office. It’s just that the masks have completely come off.

    So most of us do not know what to believe. And why would we?

    Simon Jester (c8876d)

  2. This report is clearly wrong. Trump saw the report yesterday and tweeted there were “Really Good Jobs Numbers!”

    DRJ (15874d)

  3. Simon has it right.

    I don’t trust the administration. Examples of why aren’t really necessary at this point.

    I don’t trust the press.

    To the partisans, each lie each side tells just proves that the other side’s lying is justifiable fighting back. It just keeps getting more ridiculous.

    Dustin (6d7686)

  4. If your not working your a liberal

    mg (8f83ac)

  5. Kevin Drum is a left wing commentator but he’s been publishing a net new jobs report for several years and hasn’t changed his methodology

    The American economy gained 130,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at a very sluggish 40,000 jobs. A lot of people gained employment (590,000) but a lot of people also dropped out of the labor force (364,000). The headline unemployment rate stayed steady at 3.7 percent.

    It’s a bit boring but a decent visual of how we’re doing.

    Time123 (89dfb2)

  6. wait I thought it was a recession, we were assured we were in one, bill maher says it’s necessary for democracy sarc, the clear indications is that china is taking a hit, now do we want to humiliate a nuclear power this way, that’s a different question,

    as for tiana lowe, we know she previously buried david Steinberg’s report on omar, because she thought it was too alt right or something,

    narciso (d1f714)

  7. Call to action!

    https://youtu.be/0mj6B4DtNyM

    Colonel Haiku (2601c0)

  8. In a long forgotten and indeed forgettable history & economics paper, probably in a box with old National Lampoons, I cited people who said that in ’68-69, for example, the unemployment rate hit about 3.5%.

    And that less than that was not necessarily good (they said). A certain number of people are always interviewing or changing jobs, for example, and I believe those were and maybe still are counted as “unemployed.” “Frictional unemployment” I think it was called.

    Insisting that everyone be employed all the time is not the right way to see it. Unemployment at 3.7% (they said), is about is good as it should get.

    And tariffs not good? (1), What existed for the first 150 years? (2) its enlightening to read what Brit economists think “free trade” did to Britain from about 1840 on, while the US and Germany sheltered behind tariff walls. It smashed industry and agriculture in Britain. (And no, Smoot-Hawley is not “proof” that tariffs don’t work).

    Harcourt Fenton Mudd (0c349e)

  9. “If you’re wondering why so many young people are mired in despair, futility, and occasionally violent nihilism, try listening to the Democrat presidential field babbling for 7 hours [on CNN] about how humanity is a virus that must be culled to save the Earth.”

    https://threadreaderapp.com/thread/1169588304003653633.html

    Colonel Haiku (2601c0)

  10. John Crudele of the New York Post says the Bureau of Labor Statistics job statistics are always bad.

    In short, they mechanically seasonally adjust without rhyme or reason when the cause was either an expnasion or acontraction in the base years, and they ignore signs we may have slow job growth or an expansion and just assume X number of new businessess are being created anyway regardless of economic trneds and otehr statistics.

    labor-departments-newest-debacle-should-be-trumps-main-job

    This is an ongoing problem and it needs to be fixed. But first you have to understand the root of the problem.

    …I’ve been telling readers for years that monthly numbers put out by the BLS were a crapshoot because the government was relying on guesstimates. My personal favorite is the birth/death model, which tries to predict the number of new companies that are supposed to come into business at certain times of year.

    So when the Federal Reserve looks at jobs growth to determine policy, it is essentially relying on guesses. And Washington conducts fiscal policy, or spending, based on the amount of money it thinks will be coming from taxes based on the number of people it believes are working. Companies then decide on future plans based on these guesses.

    But the numbers upon which all this is based are guesstimates..

    …Let me illustrate how the BLS missed the job count so badly and why it needed to correct its figures by 501,000 jobs.

    According to the BLS’ benchmark revision, the biggest mistakes were in categories called “leisure and hospitality,” “professional and business services” and “retail trade.” Jobs in those industries were revised lower by 175,000, 163,000 and 146,000, respectively.

    see also

    Disappointing jobs numbers may make it easier for Trump to get interest rate cut

    If you look deeply into the numbers, some very strange things emerge. For instance, in February the BLS guessed that 39,000 jobs were created in the leisure and hospitality field by companies that were just coming into business and weren’t picked up by its regular surveys.

    Now, that’s not a busy vacation time, is it? Why could all those leisure jobs been created?

    And the BLS guessed that there were 15,000 more construction jobs being created in February than its surveys picked up and 5,000 more jobs in retailing. Why, you have to ask. Do that many below-the-radar construction projects start in the middle of winter? Do retailers start hiring thousands more workers they are telling the government in February even as companies were failing left and right?

    There will be another revision to these numbers in February and it could show that the BLS’ mistake was bigger than just 501,000 jobs.

    The Labor Department and all the other agencies that handle government statistics need to clean up their acts. They can start by stopping the guessing games they play

    Iut is ot, I think, that they guess. It’s that the system of guessing is flawed.

    Sammy Finkelman (102c75)

  11. Insisting that everyone be employed all the time is not the right way to see it. Unemployment at 3.7% (they said), is about is good as it should get

    I was taught that 5-6 percent was the Goldilocks unemployment rate. Anything less would have too many inflationary results. But that was 40 years ago, whenoutsude the windows of my econ class Carter’s stagflation was in effect.

    Kishnevi (ceb37f)

  12. Speaking of jobs…..

    ThinkProgress, a top progressive website operated by the liberal think tank, Center for American Progress, is shutting down on Friday after a 15-year run.

    The decision was made after the site was unable to find a buyer. The Center for American Progress (CAP) has tried to sell off the website after operating for years in the red, according to The Daily Beast.“

    https://dailycaller.com/2019/09/06/progressive-website-think-progress-shut-down/
    _

    Possibly related (ht/Instapundit):

    Sept. 2015 via HuffPost: ThinkProgress Staffers Unionize With Writers Guild

    harkin (58d012)

  13. Possibly related indeed.

    “One week to the day after reporters and editors at the news outlets DNAinfo and Gothamist voted to join a union, their owner shut them down. The announcement caught employees at both media outlets by surprise. …”.
    https://www.wnyc.org/story/owner-shut-down-dnainfo-and-gothamist-after-employees-voted-unionize/

    Harcourt Fenton Mudd (0c349e)


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