August 6 Economic Data: Some More McJobs


Claims: +365k, Huh?

This is interesting, but is it to be believed?

In the week ending September 1, the advance figure for seasonally adjusted initial claims was 365,000, a decrease of 12,000 from the previous week’s revised figure of 377,000. The 4-week moving average was 371,250, an increase of 250 from the previous week’s revised average of 371,000.

Is this for real or is it cooked up by Obama’s pals over at DOL to help his election chances?  Good question.  One of the problems with these numbers is that they are continually revised in the same direction, which strongly implicates “book cooking”.  Simply put it is statistically beyond the realm of reason that the errors would all be in the same directionby accident.

So let’s look at the big table counts, which are behind a couple of weeks but at least give us a bit of visibility into into the alleged data.

Hmmm…. again, interesting divergence.  The roll-off has effectively stopped but at the same time we claim that the regular claims have dropped by 52,000?  Really?

I’ll run the “BS!” flag up the pole on this, but it does set up an interesting dynamic for tomorrow and forward until the election — the possibility that there may be outright false numbers published from now until that point for the purpose of swaying the electorate.

I hope that the administration isn’t that dumb, as the snapback reaction when the market figures it out would be cataclysmic.  But then again, given what I have witnessed of late in this political season, I no longer have any reason to believe they wouldn’t undertake such an outrageous (and ultimately self-destructive) course of action.

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ADP August: +201k

Just when I thought the silly couldn’t get any more so I get a report like this.

Employment in the U.S. nonfarm private business sector increased by 201,000 from July to August, on a seasonally adjusted basis. The estimated gain from June to July was revised up from the initial estimate of 163,000 to 173,000.

Did you catch it?

The first is a statement of change.

The second is an admission that the statement is not factual; it is an estimate.

I’ve always known that ADP estimates employment changes because they do not handle all of the payrolls — they extrapolate to the entire economy from their customer data, which they actually have.  So their data is a count, but the extrapolation makes a number of assumptions, one of the most-important being that the ratio of firms using them to not is something they can adequately measure.

This is one of the many reasons their data is often wildly at odds with the NFP that comes out two days (or one, in the case of a holiday as was the case this month) later.

But — did you know this?  If you didn’t, now you do.

In any event you have to take notice of this number as it is wildly over expectations.  My best guess for tomorrow has to be ratcheted up to +125k as a consequence of it and the claims number this morning — I was at +99k (just under 100k), so this is a fairly significant revision.

At the same time I want to note that effectively the entire gain in this report (92%) was in service jobs, and while our economy is about 70% service sector, this strongly implies that what’s being created are “McJobs” that pay crap and have zero or few benefits — that is, the common worker’s standard of living is continuing its inevitable decline.

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