employment report april 2007

88.000.....plus downward revisions.......plus , plus, plus......

just one or two comments on the jobs report. the bls has assumed that in the year 2006 271.000 jobs were created via the "birth death model".

mhhh, now with gdp significantly lower and the economy clearly weakening they come to the conclusion that 317.000 were added. (especially the plus 12k in construction....)

this shows the problem with the model that isn´t able to adjust timely to swings in the economy. i think we will see a big downward revision in the future.

read more about this from barry ritholtz http://tinyurl.com/3bzw5n

so langsam machen die daten zumindest in etwa sinn. eine ausnahme ist allerdings das via dem birth/death model ein höherer ansteig als im jahr 2006 unterstellt wird. da inzwischen die us wirtschaft klar im trend gen süden geht werden hier noch gewaltige revisionen nach unten erfolgen. lest bitte unbedingt die erläuterungen zu dieser "eigenwilligen" ermittlung der daten von kevin depew....

2007 Net Birth/Death Adjustment (in thousands)

Supersector	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
Natural Resources & Mining	-2	1	1	2
Construction	-52	11	27	49
Manufacturing	-23	3	6	3
Trade, Transportation, & Utilities	-29	10	19	30
Information	-9	5	0	7
Financial Activities	-17	11	8	26
Professional & Business Services	-48	28	21	44
Education & Health Services	10	12	1	47
Leisure & Hospitality	1	34	39	95
Other Services	-6	3	6	14
Total	-175	118	128	317

birth/death model http://www.bls.gov/web/cesbd.htm


thanks to http://www.glasbergen.com/

this comment from kevin depew (s.link mish) sums it up......

• According to Minyanville Professor Scott Reamer, since 1999 there has been only one other month in which the add was bigger, January 2004.


• For some perspective, in the 36 month period ending March 2002 - 36 months - the total adds from the birth/death model were 353,000. Over 36 months.


• Since the beginning of the year, the birth/death model has accounted for a net 388,000 jobs.


• Last year it added 964,000 jobs.


• The kicker is that the Bureau of Labor Statistics refuses to allow academics and commercial economists access to the models they use for the birth/death additions.

from the bls:

"The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend"

and times are changing.........

and the government contributed almost 30% with 25k new jobs..........

es sei am rande noch erwähnt das "vadder staat" satte 30% aller jobs selber geschaffen hat (25.000).....

Nonfarm employment....... p88

Government .......... p25

Goods-producing (1).... p-28

Construction ........ p-11

Manufacturing ....... p-19

Service-providing (1).. p116

Retail trade (2)..... p-26.....

here are more details http://www.bls.gov/news.release/empsit.nr0.htm

no way to spin this............very very weak .....especially with the 26.000 revision for the previous two months....

keine chance das als gute zahlen hinzustellen...extrem schwach...besonders mit den 26.000 revision der vormonate

via barry ritholtz http://tinyurl.com/2kot89

• BLS continues to understate the unemployment rate, as it has been doing for most of the past 6 years, by reducing the ‘pool of available workers’. BLS reduced the labor force by 392,000 in April. This kept the Unemployment Rate from jumping higher than 4.5%. The ‘participation rate’ declined to 66% from 66.3%, which is an unusually large monthly decline. That's 0.3% times 143 million or so workers -- instead of rasisng the unemployment rate, we lower the labor participation rate by 429,000 workers.

here are the takes from

tim http://tinyurl.com/3b59r5

barry http://tinyurl.com/37p4ot

the street light http://tinyurl.com/2v3ubf

calculated risk http://tinyurl.com/39ywwf

mish/minyanville http://tinyurl.com/2xqszz

housing doom http://tinyurl.com/2w52ns

mish http://tinyurl.com/2d57u3 (must read)!

disclosure: chapman and dylan fan :-)