June Jobs Report

[BushKenya]

When do they come out?  Is it today, or is it next week?  I assume it's next week, because I've heard absolutely no chatter about it on Yahoo Finance, CNN Money, or here.

What is it expected to look like? Any improvement from May's numbers?

[Tender Branson]

When do they come out?  Is it today, or is it next week?  I assume it's next week, because I've heard absolutely no chatter about it on Yahoo Finance, CNN Money, or here.

What is it expected to look like? Any improvement from May's numbers?

Next week.

[Alaska Thunderfvck]

Jobless claims are down, but still a high number if thats anything to go by.

[Tender Branson]

Probably something like 100-200K more jobs.

Rate should be down to 9%

[Mr.Phips]

Probably something like 100-200K more jobs.

Rate should be down to 9%

I doubt that.  This is a month for big layoffs at the local level.  Id be surprised if the number is over 100K. 

[BushKenya]

Probably something like 100-200K more jobs.

Rate should be down to 9%

I doubt that.  This is a month for big layoffs at the local level.  Id be surprised if the number is over 100K. 

I don't know if this would play a factor, but the 3rd quarter is generally a slow time for the economy, such as the stock market, and with the disappointing reports we had in the 2nd quarter, I actually wouldn't be suprised to see the unemployment rate either remain at 9.1% or even tick up to 9.2%.

Perhaps someone with more of an economic background could enlighten me if that's the case.

[CARLHAYDEN]

Everyone should remember that due to graduations, June has far more entrants into the civilian labor force, than your typical month.

The real question appears to be how many people the 'adjustment bureau' can kick out of the civilian labor force.

[Mr.Phips]

Everyone should remember that due to graduations, June has far more entrants into the civilian labor force, than your typical month.

The real question appears to be how many people the 'adjustment bureau' can kick out of the civilian labor force.

That wasnt the case in June 2010, when the unemployment rate dipped from 9.7% to 9.6% while the economy lost almost 200,000 jobs. 

[CARLHAYDEN]

Everyone should remember that due to graduations, June has far more entrants into the civilian labor force, than your typical month.

The real question appears to be how many people the 'adjustment bureau' can kick out of the civilian labor force.

That wasnt the case in June 2010, when the unemployment rate dipped from 9.7% to 9.6% while the economy lost almost 200,000 jobs. 

Please reread the second part of my post.

The 'adjustment bureau' has kept the U-3 (seasonally adjusted) unemployment rate down by kicking people out of the civilian labor force.

If you check the data, you will see that June does have disproportionately high entrant numbers into the civilian labor force.

Now, the question remains how many people can the adjustment bureau get away with kicking out of the civilian labor force?

[Mr.Phips]

Everyone should remember that due to graduations, June has far more entrants into the civilian labor force, than your typical month.

The real question appears to be how many people the 'adjustment bureau' can kick out of the civilian labor force.

I know they kicked a lot of people out of the labor force in December and January.  The unemployment rate went down by eight tenths of a percent in that period.  You normally dont get that kind of drop with normal labor force participation rates unless 700,000 jobs are being created per month. 
That wasnt the case in June 2010, when the unemployment rate dipped from 9.7% to 9.6% while the economy lost almost 200,000 jobs. 

Please reread the second part of my post.

The 'adjustment bureau' has kept the U-3 (seasonally adjusted) unemployment rate down by kicking people out of the civilian labor force.

If you check the data, you will see that June does have disproportionately high entrant numbers into the civilian labor force.

Now, the question remains how many people can the adjustment bureau get away with kicking out of the civilian labor force?

[Snowguy716]

Lots of teachers got laid off this month, which likely led to the higher unemployment numbers.

I expect job growth to be very anemic... maybe 50-70k with 100-150k private sector jobs and -30-100k government jobs.

Budget cuts are killing our recovery.  But hey.. gotta keep taxes low for the rich so they can create a job for you!

[Alaska Thunderfvck]

NEW YORK (Reuters) -The pace of growth in the manufacturing sector picked up for the first time in four months in June, a sign of optimism for the sputtering economy, according to an industry report released on Friday.

The Institute for Supply Management said its index of national factory activity rose to 55.3 from 53.5 the month before. The reading topped expectations for 51.8, according to a Reuters poll of economists.

 A reading above 50 indicates expansion in the manufacturing sector, while a number below 50 means contraction. The report alleviated some fears over the strength of the recovery but analysts said it was not yet a clear sign that the recent weakness in growth was past.

http://www.realclearmarkets.com/news/reuters/finance_business/2011/Jul/01/manufacturing_sector_picks_up_in_june.html

[phk]

NEW YORK (Reuters) -The pace of growth in the manufacturing sector picked up for the first time in four months in June, a sign of optimism for the sputtering economy, according to an industry report released on Friday.

The Institute for Supply Management said its index of national factory activity rose to 55.3 from 53.5 the month before. The reading topped expectations for 51.8, according to a Reuters poll of economists.

 A reading above 50 indicates expansion in the manufacturing sector, while a number below 50 means contraction. The report alleviated some fears over the strength of the recovery but analysts said it was not yet a clear sign that the recent weakness in growth was past.

http://www.realclearmarkets.com/news/reuters/finance_business/2011/Jul/01/manufacturing_sector_picks_up_in_june.html

[pinqy]

Everyone should remember that due to graduations, June has far more entrants into the civilian labor force, than your typical month.

But the official numbers are seasonally adjusted to account for that kind of noise.

The real question appears to be how many people the 'adjustment bureau' can kick out of the civilian labor force.

BLS doesn't kick anyone out of the civilian labor force...the categories are self reported.  If someone reports that they are not working and haven't looked in more than 4 weeks they (and proportionately the number they represent in the sample) are counted as Not in the Labor Force.  It's all based on the survey reponse, not some arbitrary categorizing as you seem to imply.

And as a matter of fact, the Labor Force has increased every month this year.

[CARLHAYDEN]

Everyone should remember that due to graduations, June has far more entrants into the civilian labor force, than your typical month.

But the official numbers are seasonally adjusted to account for that kind of noise.

The real question appears to be how many people the 'adjustment bureau' can kick out of the civilian labor force.

BLS doesn't kick anyone out of the civilian labor force...the categories are self reported.  If someone reports that they are not working and haven't looked in more than 4 weeks they (and proportionately the number they represent in the sample) are counted as Not in the Labor Force.  It's all based on the survey reponse, not some arbitrary categorizing as you seem to imply.

And as a matter of fact, the Labor Force has increased every month this year.

Where to begin?

First, the Bureau of Labor Statistics used TWO different surveys with respect to employment.
One is the “Household” and the other the “Establishment” (employer).

Second, the “Household” survey is available in both “Not seasonally adjusted,” and “Seasonally adjusted “ formats.  Both are “official.”  In fact, the annual data is only available in the Not seasonally adjusted format.

Third, BLS (the adjustment bureau) does make adjustments in the data other than pure seasonal adjustments.  One of the most significant is their presumptions as to new businesses (and jobs) created.

Let me provide one recent example of adjustments by the BLS:

According the BLS, the Civilian noninstitutional population amounted to approximately 238,889,000 in December of 2010, but 238,707,000 in January of 2011.  Now, this decrease of approximately 182,000 is NOT the result of a real decrease in the population of the United States of persons 16 years and over, but rather the result in “changes in populations controls” made by the BLS.

Now, the BLS presumed a really huge drop in the Seasonally adjusted Civilian Labor Force during the same period, with December of 2010 having approximately 153,690,000 and January of 2011 having approximately 153,186,000 (that’s a drop of approximately  504,000)!

In conclusion, be wary of BLS data.

[pinqy]

Where to begin?

First, the Bureau of Labor Statistics used TWO different surveys with respect to employment.
One is the “Household” and the other the “Establishment” (employer).

True, but irrelevant to the discussion.  When talking about the Labor Force, we're only talking about the Current Population Survey (household) not the Current Employment Statistics (establlishment).

Second, the “Household” survey is available in both “Not seasonally adjusted,” and “Seasonally adjusted “ formats.  Both are “official.”  In fact, the annual data is only available in the Not seasonally adjusted format.

The officially reported headline rate is the seasonally adjusted rate.  It's better for looking at month to month changes.  Looking annually, the average negates the seasonal effects anyway, so using the seasonally adjusted numbers as an annual average would be a distortion.  So while all publically released data is "official," the officially used number is the seasonally adjusted number.

Third, BLS (the adjustment bureau) does make adjustments in the data other than pure seasonal adjustments.  One of the most significant is their presumptions as to new businesses (and jobs) created.

Now you’re referring to the birth/death model used in the CES, which is irrelevant to your claims about the CPS.  No such model is used for the CPS.  In compiling the CPS data, of course there are weights used in the aggregation and any individual household could represent anywhere from a couple of hundred to a couple of thousand other households, depending on the sampling area.  That’s standard, tested, statistical practice.  When using a sample of 60,000 households to represent around 250 million people, there are of course statistical “adjustments” but that’s not the same as the deliberate adjustments to gain a desired result you seem to be implying.

According the BLS, the Civilian noninstitutional population amounted to approximately 238,889,000 in December of 2010, but 238,707,000 in January of 2011.  Now, this decrease of approximately 182,000 is NOT the result of a real decrease in the population of the United States of persons 16 years and over, but rather the result in “changes in populations controls” made by the BLS.

Actually, the changes in population controls are made by the Census Bureau, not BLS (Census also does the collection for the CPS). 

Now, the BLS presumed a really huge drop in the Seasonally adjusted Civilian Labor Force during the same period, with December of 2010 having approximately 153,690,000 and January of 2011 having approximately 153,186,000 (that’s a drop of approximately  504,000)!

It wasn’t a “Presumption,” but a necessary change based on better data.  Deriving the national figures from the sample requires assumptions about the population.  Accurate population data cannot be done every month, but on an  annual basis a better population estimate can be made.  It’s not like it’s done in stealth mode or for any reason but to improve the data.

Keep in mind, by necessity, all the released numbers are estimates.  That’s all they can be.  Of course they’re not perfect, but they’re better than anything else.

But in any case I note you have failed to defend your claim about “adjusting” people out of the labor force.  Why is that?

[CARLHAYDEN]

Assumptions and Methods Used in Preparing Employment Projections

http://www.bls.gov/oco/oco2006.htm

The above include a number of “assumptions” made by the BLS in developing their adjustments to data.

[pinqy]

Assumptions and Methods Used in Preparing Employment Projections

The above include a number of “assumptions” made by the BLS in developing their adjustments to data.

Those are for Employment Projections, not the monthly Employment Situation.  Employment Projections is a 10 year projection of occupational employment (and Occupational Employment is yet another survey, unrelated to the CES).  Those assmptions and methods are not used for the CES or the CPS.

Projections are only 10 year projections specifically to avoid any appearance of trying to fit the estimates to predictions. 

[Mr.Phips]

Everyone should remember that due to graduations, June has far more entrants into the civilian labor force, than your typical month.

But the official numbers are seasonally adjusted to account for that kind of noise.

The real question appears to be how many people the 'adjustment bureau' can kick out of the civilian labor force.

BLS doesn't kick anyone out of the civilian labor force...the categories are self reported.  If someone reports that they are not working and haven't looked in more than 4 weeks they (and proportionately the number they represent in the sample) are counted as Not in the Labor Force.  It's all based on the survey reponse, not some arbitrary categorizing as you seem to imply.

And as a matter of fact, the Labor Force has increased every month this year.

There is no way the labor force increased in January.  If it did, there would have had to have been close to a million jobs created that month to move the unemployment rate down from 9.4% to 9%.

[True Federalist]

Second, the “Household” survey is available in both “Not seasonally adjusted,” and “Seasonally adjusted “ formats.  Both are “official.”  In fact, the annual data is only available in the Not seasonally adjusted format.

I love the way you make it sound like the seasonally adjusted data is somehow sinister because the BLS doesn't issue seasonally adjusted annual data.  Of course, why anyone would want to seasonally adjust data that covers all the seasons at once, much less how one would do such a useless thing is left unsaid.

[pinqy]

There is no way the labor force increased in January.  If it did, there would have had to have been close to a million jobs created that month to move the unemployment rate down from 9.4% to 9%.

Every month since January.  Looking at Dec-Jan labor force stats is tricky because January is when Census updates the population controls so there are all kinds of adjustments made to look at Dec-Jan changes. The press release for the Jan data explains what the adjustments and effects were.

[Tender Branson]

Jobs data slightly improved last month:

NEW YORK (CNNMoney) -- The job market got two optimistic signs Thursday as private sector employers added 157,000 positions in June and fewer people filed new claims for unemployment benefits, according to two reports.

Economists were expecting a gain of just 60,000 private sector jobs, according to consensus estimates from Briefing.com.

...

In a separate report Thursday, the Labor Department said the number of first-time filers for unemployment insurance fell by 14,000 to 418,000 last week. Economists expected 425,000 initial claims.

The 4-week moving average, which aims to smooth out volatility, came in at 424,750. That's a decrease of 3,000 from the previous week's average.

http://money.cnn.com/2011/07/07/news/economy/jobs_claims_ADP/

[pinqy]

Jobs data slightly improved last month:

NEW YORK (CNNMoney) -- The job market got two optimistic signs Thursday as private sector employers added 157,000 positions in June and fewer people filed new claims for unemployment benefits, according to two reports.The 4-week moving average, which aims to smooth out volatility, came in at 424,750. That's a decrease of 3,000 from the previous week's average.

The jobs report is the ADP report.  Their sample is soley ADP clients.  Now that's a big chunk of employment, but hardly representative of all (and excludes all government jobs).  The BLS report tomorrow will give a more accurate jobs picture (ADP is rarely close to the BLS numbers).

[Tender Branson]

Jobs data slightly improved last month:

NEW YORK (CNNMoney) -- The job market got two optimistic signs Thursday as private sector employers added 157,000 positions in June and fewer people filed new claims for unemployment benefits, according to two reports.The 4-week moving average, which aims to smooth out volatility, came in at 424,750. That's a decrease of 3,000 from the previous week's average.

The jobs report is the ADP report.  Their sample is soley ADP clients.  Now that's a big chunk of employment, but hardly representative of all (and excludes all government jobs).  The BLS report tomorrow will give a more accurate jobs picture (ADP is rarely close to the BLS numbers).

There's not a really big difference between ADP and BLS when looking at the trend line:

[pinqy]

Sure, they're going to trend the same, but as a predictor of month to month changes, and monthly levels, ADP is often off by a bit and it does not seem to me to be particularly reliable as to what the BLS report will say.