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The Real Deal on Jobs – The BLS Is Just Catching Up With Massive Undercounting in Seasonally Adjusted Estimates
Courtesy of Lee Adler of the Wall Street Examiner
October 5, 2012 – The BLS today reported a gain of 114,00 in nonfarm payrolls. That compares with a gain of 574,000 in the actual, not seasonally adjusted (SA) number. In the actual (NonSA) data September is always an up month. Last year the September NonSA gain was 697,000. In 2010, it was 496,000. The 10 year average gain for September for 2002 to 2011 was 533,000. This year’s September gain came on the heels of very strong NonSA gains in August.
Unlike the August SA number, which had a big upward revision, note that the August NonSA number was not revised. There’s a problem with the seasonally adjusted fictional number, not with the actual NonSA data. The SA number for this month will subsequently be revised for the current month in each of the next 5 years as the BLS attempts to fit the SA number to the actual change. It will also have a major benchmark revision in February, when the benchmarking process is finalized.
Fox News and Jack Welch are accusing the Administration of cooking the books. Ironically, last month I complained:
The Bureau of Labor Statistics (BLS) must be staffed with Republicans. There’s something wrong with the headline number this month. It is consistent with the pattern of the past 5 months where the seasonally adjusted (SA) headline numbers appear to understate the trend of the actual, not seasonally adjusted (NSA) numbers.
A few weeks after I posted that, the BLS came out with its preliminary benchmark revision announcement that it had underestimated growth from April 2011 to March 2012 by 386,000, and that as a result of the new benchmark all of the previously published data for 2012 would also be revised up.
Lo and behold the August SA headline number has now been revised up by 46,000 and July has been revised up by 40,000. The BLS headline number is really lousy data, but the market pays attention to it. We need to look at the best data we can find to know the truth about what’s going on. That means watching things like the withholding tax data and actual, not seasonally adjusted first time unemployment claims trends.
The BLS will revise this month’s number, not only next month and the month after, but every year for the next 5 years as they…
2012-10-05 18:43:13
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