The discrepancy between the BLS household and employer surveys for September has been explained as due to the part-time jobs, since the employer survey does not count those.
But when you subtract off the 570,000 part-times from the 870,000 new jobs created, that still leaves 300,000 full-time jobs. That's nearly three times higher than the employer survey number of 114,000. Have there been cases before where these two ways of counting the full-times, which are more of a apples to apples comparison, have been so far off?
Also, correct me if I'm wrong but reading between the lines this article with an interview with a BLS economist seems to be saying even the BLS doubts the 7.8% number is actually correct:
October 5, 2012, 2:52 PM
Taming Volatile Raw Data for Jobs Reports
By CATHERINE RAMPELL
7:32 p.m. | Updated
http://economix.blogs.nytimes.com/2012/10/05/explaining-the-big-gain-in-...
In fact it appears to be the general consensus among the experts including yourself that the BLS numbers for September are probably not correct. That in itself is an important fact, regardless of whether it was intentional or not.
Getting back to that article, they seem to be suggesting that changing trends in the time when young people leave Summer jobs effects the accuracy of their seasonal adjustments. If that is true then they still applied the same seasonal adjustments when the evidence implies they are no longer valid. That is not to say they were being intentionally deceptive, but only they have not yet created the new models to account for the changing trends.
Also, I saw you discounted the effect of the young people numbers. But the article said they accounted for 42% of the increase. When you take into account a large part of the remainder would be the part-times, the discrepancy from the employer survey would be much less.
In addition to comparing the 4-week average of new jobless claims to the BLS new jobs number for October, could you focus on that week of new jobless claims when the BLS does its household employment survey?
Mr. Oak, you were right that the prior week's huge drop in new jobless claims was bogus, intentionally or not. Many people pointed to it as evidence the BLS October unemployment rate drop to 7.8% was "real". But now that that big drop in new claims last week has been proven false, that brings the October BLS numbers again into question.
You said the weekly new jobless claims numbers have always been volatile, and better is the four average. So does the four-week average of new jobless claims for October support or contradict the BLS numbers of nearly 1 million new jobs created in that one month?
For unless you are oblivious to your CPA and bookkeeper you would know these basic business deductions and pass through. This is personal income tax, it has nothing to do with property taxes, state and local taxes, sales taxes and briefly touches upon payroll taxes.
That is the claim, that lowering the upper personal income tax brackets will create jobs and statistically it has not and the above are the reasons. One would have to have a 90% personal income tax rate to affect hiring and that's not anywhere near the percentages proposed or historically what they have been.
You're article is a bootstrap argument. You surmise that because there are deductions for labor expenses, then taxes have no impact on business growth. While I am not sure I accept your premise about labor expense decuction, even if I do, your boot strap is flawed because you can't just saw off labor expenses and then extrapolate that taxes have no impact. Labor expenses do not exist in a vaccum. As a a commercial building owner and employer, my property taxes contiue to go up, cutting into my profit and, ultimately, my incentive and ability to reinvest. The reality of the situation is that taxes do affect investment no matter how much you try to cherry pick your evidence to support your conclusion. Even our founding fathers recognized that the power to tax by the government is the power to destroy.
only 1100 more residential construction jobs in september, & the unadjusted totals YoY from the household survey show a loss of over 50,000 construction jobs
We did this correlation already, see here and here.
First, always go off of the four week moving average and Reuters is wrong, it's not initial claims below 400k, it's the four week moving average below 400k and that doesn't mean payrolls growth, it means hemorrhaging stopped, we're keeping up with population growth, breaking even such as the new terrible conditions require.
For job growth we need the four week average below 360k.
See the two links, there is a nice graph created showing the change in payrolls against the four week moving average.
Yeah, I know the financial press often pulls numbers out of their ass. These financial reporters do not calculate out from first principles, they simply ask someone else and then print that. At least that's my theory and why we get echo chambers that do not match the actual statistics.
Thank God for the St. Louis FRED system since they make instant eye candy so easy, we can now digest these statistics and get the general public to follow instead of reading these "articles" we see that are way too often wrong.
Today's increase of initial claims by 46,000 to 388,000 validates what we said last week in this post. Last week was a fluke, probably due to California not doing their homework even though CA denies it, as well as people waiting until the start of a new quarter.
While they did not go backwards and readjust the figures, the two week average shows basically a 16,000 increase.
There is so much noise in the weekly statistics but I'm going to go out on a limb and say California probably underreported their initial claims last week in the 30k range, after seasonal adjustments are done.
We can't get to seasonally adjusted initial claims data per state, period, so needless to say this is a real thumb in the air and if you think the national initial claims are statistically noisy, the states are ridiculous.
The four week moving average is now 365,500 and that's an increase of 750 from last week and is about right and we are definitely seeing less firings, it's showing up in all sorts of labor statistics.
Bottom line is never go off of the week's numbers and always use the four-week moving average. If that has a lot of statistical noise but the past two weeks have just further validated what we said, people are nuts to react to the weekly initial claims figures.
This is sophomoric bs. The real world is
that that business activity gets put in a crate with the rest of the factory in Ohio, etc, and shipped to China.
You go right back to spouting all the failed right wing economic cliches that got us in this mess.
If you couldn't learn after the disastrous Bush years YOU CAN'T LEARN. We were losing 800 thousand jobs a month as the boy king was finishing up his failed presidency. Two weeks after Bush left office the IMF declared america to be in a depression
Learning is beyond your capability. All you can do is parrot the same old same old.
Older workers are not pushing out younger workers, that is false and goes along with institutionalized age discrimination. There was just a study released showing this is not so. Here an article with links to the actual study.
You are also ignoring something called experience and training that the older worker probably has but bottom line, these age groups are not substitutes of each other.
Worker substitution is an interesting topic. It seems to go with attitudes. In other words, some will claim older workers are perfect substitutes for younger ones, yet, magically foreign workers are not substitutes for native workers.
By occupational categories, even unskilled labor, it's questionable that younger workers are substitutes for older workers. Older workers, even in unskilled jobs, tend to gravitate towards office, retail sales, sorts of positions which require less manual labor, or reasonable manual labor. Teenagers often look for part-time, summer jobs. It looks more suspect that teenagers have been displaced by foreign workers than anything else. Case in point, some of the occupations listed for H-2B Visas are traditional teenager summer jobs. There is a claim of a shortage in lifeguards, waitresses, waiters, cleaning staff, summer resort staff, fast food workers and hence employers claim they need foreign guest workers Visas to bring in workers (H-2B). That isn't even touching upon illegal workers who also can be found heavily in landscaping, construction summer jobs, restaurants, cleaning crews which also are commonly summer as well as part-time jobs.
In 2000, the China PNTR came into play as well as telecommunications, Internet became cheap enough they could offshore outsource jobs. So, two things happened, well, three, they offshore outsourced jobs, foreign guest worker visas were increased and the China trade agreement is so poorly written it encouraged goods manufacturers to move to China in droves and it was almost impossible to compete at that time if they did not. So, it is also possible that career workers, ages 25-65, who normally would be in more semi-skilled, or skilled manufacturing types of jobs were forced back into the lower paying retail trade sorts of jobs. This would be all age groups as worker substitution for those between the ages of 16-19, 20-25, not those over the ages of 65.
What we are showing is that taxes make little difference. An employee is a tax deduction and also would increase profits due to an increase in output through that employee. It is gross receipts that matter in hiring and that has everything to do with demand for that businesses' goods and services.
Saw someone say Starbucks had an obligation to find every way possible to not pay taxes - and it's all legal because big corporations and their political puppets allow it. Ethical? Come on, 2012, ethics are so antiquated. The same rules apply to the 99% too, right? Gosh, officer and IRS Agent, it's my obligation to avoid paying my fair share, following the laws the "peons" must follow, and on and on and on. These people love the American politicans that serve their interests and are rented for a very low price, but bearing their fair share and helping finance schools, roads, airports, law enforcement, the infrastructure they use every single day to make their profits and the people that buy their overpriced crap daily, well, they apparently don't matter too much. Venti tax bill, Starbucks, no foam with that you asshats.
Tax rates have declined on both individual and corporate returns since 1954 Tax Reform Act. Yet every measure of employment in industrial activity has also declined during the same period. Just for a moment, freeze frame the early 50s when top individual rates were 70 percent and corporate rates were up to 90 percent if the Excess Profits taxes were included.
The U.S. economy was growing in 1950 at 12 percent by each GDP measure, Consumer, Trade, Government, Investment. How was this possible? Not because of the Korean War, not big enough. Because businesses then concentrated on top-line growth, expanding the enterprise and doing the rate race thing of paying for all expenses with phenomenal growth.
Financing this period of growth, internationally,the U.S. repatriated $50bn of Third Reich gold in the 5 years following WWII. That same gold would be worth $1,750 today. Wisely, the money was recycled dollar for dollar in the Marchall Plan. Germany needed fixed investment, not gold in vaults.
The $1.75 Trillion is almost the same as the corporate money locked up abroad today. There have been many passionate posts on these pages about getting that money back. It's an idea whose time has come. The MNCs if they thought the way the business leaders immediately post WWII, could come up with a second Marshall Plan benefiting both the U.S. and the weak periphery of Europe. MNCs can borrow at 1% on 10 year money and
could start projects in their adopted countries, using the cash balances in the US
From an August 11, 2011 story on NPR, Reuters reports:
Economists polled by Reuters had forecast claims steady at 400,000. The prior week's figure was revised up to 402,000 from the previously reported 400,000.
...
The four-week moving average of claims, considered a better measure of labor market trends, slipped 3,250 to 405,000. Economists say both initial claims and the four-week average need to drop close to 350,000 to signal a sustainable improvement in the labor market.
Given this week's 388,000 initial unemployment claims, the media now says, "[m]any economists believe a reading below 400,000 points to an improving labor market." That's from Reuters on 10/18/12. Really?! So if 399,000 people continue to get laid off for the next 1-50 years, all is well in the USA? Come on man, just simple logic. It's 2012, companies still hacking payrolls by 300,000+ and sending every job not nailed down overseas or replacing it with someone new to our shores (but more labor arbitrage, more, more more), or making people reapply to their own jobs and then hiring them back at a discounted wage or as interns for free. But hey, economists and the media keep upping the ante, so the number used to be under 300,000, then mid-300s, now it's anything under 400,000 and all is well. Watch next week when this number is inevitably increased up from 388,000, I'm guessing just under 400,000 because almost all other revisions are up and must be kept under 400,000 because that's "improvement" in the labor market. If it can't be kept under 400,000, look for the new "improvement" number in the labor market to be upped to 425,000. Yes, they are this obvious about changing the measurements and signs of improvement and deterioration. So blatant, it's sad that people get paid for this crap while 27 million other people are left out in the cold like Dickensian street children staring at liars and manipulators enjoying a warm meal next to a fireplace.
It looks like many retirement age or near retirement age are forgoing retirement or re-entering the job market. This is bad for the younger workers because one experienced retiree leaving pays for two or three new people to enter the market.
Also interesting is the almost universal 85% participation rate in '99. What is so different (besides dot-com bubble, housing bubble) between '12 and '99?
They completely ignore the occupational statistics vs. the degrees awarded to U.S. citizens in STEM, that the U.S. is graduating way more STEM than there are jobs available as it is. Both of them will labor arbitrage engineers & scientists.
Obama claims only "low pay and repetitive jobs" are offshore outsourced. That is completely wrong, the high pay, career oriented jobs are being offshore outsourced.
Advanced R&D was and is being offshore outsourced, not just Computers, Engineering but Chemical engineering, pharmaceutical research, the list goes on and on. The highest paying middle class jobs are being offshore outsourced and also these are supposedly the jobs which generate "more jobs". (not if you offshore outsource your manufacturing do they!).
The discrepancy between the BLS household and employer surveys for September has been explained as due to the part-time jobs, since the employer survey does not count those.
But when you subtract off the 570,000 part-times from the 870,000 new jobs created, that still leaves 300,000 full-time jobs. That's nearly three times higher than the employer survey number of 114,000. Have there been cases before where these two ways of counting the full-times, which are more of a apples to apples comparison, have been so far off?
Also, correct me if I'm wrong but reading between the lines this article with an interview with a BLS economist seems to be saying even the BLS doubts the 7.8% number is actually correct:
October 5, 2012, 2:52 PM
Taming Volatile Raw Data for Jobs Reports
By CATHERINE RAMPELL
7:32 p.m. | Updated
http://economix.blogs.nytimes.com/2012/10/05/explaining-the-big-gain-in-...
In fact it appears to be the general consensus among the experts including yourself that the BLS numbers for September are probably not correct. That in itself is an important fact, regardless of whether it was intentional or not.
Getting back to that article, they seem to be suggesting that changing trends in the time when young people leave Summer jobs effects the accuracy of their seasonal adjustments. If that is true then they still applied the same seasonal adjustments when the evidence implies they are no longer valid. That is not to say they were being intentionally deceptive, but only they have not yet created the new models to account for the changing trends.
Also, I saw you discounted the effect of the young people numbers. But the article said they accounted for 42% of the increase. When you take into account a large part of the remainder would be the part-times, the discrepancy from the employer survey would be much less.
Bob Clark
In addition to comparing the 4-week average of new jobless claims to the BLS new jobs number for October, could you focus on that week of new jobless claims when the BLS does its household employment survey?
Bob Clark
Mr. Oak, you were right that the prior week's huge drop in new jobless claims was bogus, intentionally or not. Many people pointed to it as evidence the BLS October unemployment rate drop to 7.8% was "real". But now that that big drop in new claims last week has been proven false, that brings the October BLS numbers again into question.
You said the weekly new jobless claims numbers have always been volatile, and better is the four average. So does the four-week average of new jobless claims for October support or contradict the BLS numbers of nearly 1 million new jobs created in that one month?
Bob Clark
For unless you are oblivious to your CPA and bookkeeper you would know these basic business deductions and pass through. This is personal income tax, it has nothing to do with property taxes, state and local taxes, sales taxes and briefly touches upon payroll taxes.
That is the claim, that lowering the upper personal income tax brackets will create jobs and statistically it has not and the above are the reasons. One would have to have a 90% personal income tax rate to affect hiring and that's not anywhere near the percentages proposed or historically what they have been.
You're article is a bootstrap argument. You surmise that because there are deductions for labor expenses, then taxes have no impact on business growth. While I am not sure I accept your premise about labor expense decuction, even if I do, your boot strap is flawed because you can't just saw off labor expenses and then extrapolate that taxes have no impact. Labor expenses do not exist in a vaccum. As a a commercial building owner and employer, my property taxes contiue to go up, cutting into my profit and, ultimately, my incentive and ability to reinvest. The reality of the situation is that taxes do affect investment no matter how much you try to cherry pick your evidence to support your conclusion. Even our founding fathers recognized that the power to tax by the government is the power to destroy.
only 1100 more residential construction jobs in september, & the unadjusted totals YoY from the household survey show a loss of over 50,000 construction jobs
We did this correlation already, see here and here.
First, always go off of the four week moving average and Reuters is wrong, it's not initial claims below 400k, it's the four week moving average below 400k and that doesn't mean payrolls growth, it means hemorrhaging stopped, we're keeping up with population growth, breaking even such as the new terrible conditions require.
For job growth we need the four week average below 360k.
See the two links, there is a nice graph created showing the change in payrolls against the four week moving average.
Yeah, I know the financial press often pulls numbers out of their ass. These financial reporters do not calculate out from first principles, they simply ask someone else and then print that. At least that's my theory and why we get echo chambers that do not match the actual statistics.
Thank God for the St. Louis FRED system since they make instant eye candy so easy, we can now digest these statistics and get the general public to follow instead of reading these "articles" we see that are way too often wrong.
Today's increase of initial claims by 46,000 to 388,000 validates what we said last week in this post. Last week was a fluke, probably due to California not doing their homework even though CA denies it, as well as people waiting until the start of a new quarter.
While they did not go backwards and readjust the figures, the two week average shows basically a 16,000 increase.
There is so much noise in the weekly statistics but I'm going to go out on a limb and say California probably underreported their initial claims last week in the 30k range, after seasonal adjustments are done.
We can't get to seasonally adjusted initial claims data per state, period, so needless to say this is a real thumb in the air and if you think the national initial claims are statistically noisy, the states are ridiculous.
The four week moving average is now 365,500 and that's an increase of 750 from last week and is about right and we are definitely seeing less firings, it's showing up in all sorts of labor statistics.
Bottom line is never go off of the week's numbers and always use the four-week moving average. If that has a lot of statistical noise but the past two weeks have just further validated what we said, people are nuts to react to the weekly initial claims figures.
This is sophomoric bs. The real world is
that that business activity gets put in a crate with the rest of the factory in Ohio, etc, and shipped to China.
You go right back to spouting all the failed right wing economic cliches that got us in this mess.
If you couldn't learn after the disastrous Bush years YOU CAN'T LEARN. We were losing 800 thousand jobs a month as the boy king was finishing up his failed presidency. Two weeks after Bush left office the IMF declared america to be in a depression
Learning is beyond your capability. All you can do is parrot the same old same old.
Need to be here. I don't want to write another initial claims but I'll put updates in the comments,
Older workers are not pushing out younger workers, that is false and goes along with institutionalized age discrimination. There was just a study released showing this is not so. Here an article with links to the actual study.
You are also ignoring something called experience and training that the older worker probably has but bottom line, these age groups are not substitutes of each other.
Worker substitution is an interesting topic. It seems to go with attitudes. In other words, some will claim older workers are perfect substitutes for younger ones, yet, magically foreign workers are not substitutes for native workers.
By occupational categories, even unskilled labor, it's questionable that younger workers are substitutes for older workers. Older workers, even in unskilled jobs, tend to gravitate towards office, retail sales, sorts of positions which require less manual labor, or reasonable manual labor. Teenagers often look for part-time, summer jobs. It looks more suspect that teenagers have been displaced by foreign workers than anything else. Case in point, some of the occupations listed for H-2B Visas are traditional teenager summer jobs. There is a claim of a shortage in lifeguards, waitresses, waiters, cleaning staff, summer resort staff, fast food workers and hence employers claim they need foreign guest workers Visas to bring in workers (H-2B). That isn't even touching upon illegal workers who also can be found heavily in landscaping, construction summer jobs, restaurants, cleaning crews which also are commonly summer as well as part-time jobs.
In 2000, the China PNTR came into play as well as telecommunications, Internet became cheap enough they could offshore outsource jobs. So, two things happened, well, three, they offshore outsourced jobs, foreign guest worker visas were increased and the China trade agreement is so poorly written it encouraged goods manufacturers to move to China in droves and it was almost impossible to compete at that time if they did not. So, it is also possible that career workers, ages 25-65, who normally would be in more semi-skilled, or skilled manufacturing types of jobs were forced back into the lower paying retail trade sorts of jobs. This would be all age groups as worker substitution for those between the ages of 16-19, 20-25, not those over the ages of 65.
What we are showing is that taxes make little difference. An employee is a tax deduction and also would increase profits due to an increase in output through that employee. It is gross receipts that matter in hiring and that has everything to do with demand for that businesses' goods and services.
Stop watching Fox and look at the statistics.
Saw someone say Starbucks had an obligation to find every way possible to not pay taxes - and it's all legal because big corporations and their political puppets allow it. Ethical? Come on, 2012, ethics are so antiquated. The same rules apply to the 99% too, right? Gosh, officer and IRS Agent, it's my obligation to avoid paying my fair share, following the laws the "peons" must follow, and on and on and on. These people love the American politicans that serve their interests and are rented for a very low price, but bearing their fair share and helping finance schools, roads, airports, law enforcement, the infrastructure they use every single day to make their profits and the people that buy their overpriced crap daily, well, they apparently don't matter too much. Venti tax bill, Starbucks, no foam with that you asshats.
Tax rates have declined on both individual and corporate returns since 1954 Tax Reform Act. Yet every measure of employment in industrial activity has also declined during the same period. Just for a moment, freeze frame the early 50s when top individual rates were 70 percent and corporate rates were up to 90 percent if the Excess Profits taxes were included.
The U.S. economy was growing in 1950 at 12 percent by each GDP measure, Consumer, Trade, Government, Investment. How was this possible? Not because of the Korean War, not big enough. Because businesses then concentrated on top-line growth, expanding the enterprise and doing the rate race thing of paying for all expenses with phenomenal growth.
Financing this period of growth, internationally,the U.S. repatriated $50bn of Third Reich gold in the 5 years following WWII. That same gold would be worth $1,750 today. Wisely, the money was recycled dollar for dollar in the Marchall Plan. Germany needed fixed investment, not gold in vaults.
The $1.75 Trillion is almost the same as the corporate money locked up abroad today. There have been many passionate posts on these pages about getting that money back. It's an idea whose time has come. The MNCs if they thought the way the business leaders immediately post WWII, could come up with a second Marshall Plan benefiting both the U.S. and the weak periphery of Europe. MNCs can borrow at 1% on 10 year money and
could start projects in their adopted countries, using the cash balances in the US
Lots of data but your premise is flawed.
Business exists to create profits for their owners/shareholders, not to create jobs, but ...
Lower taxes leave more for businesses/owners to profit and re-invest.
Profits (and the attraction of more potential profits) and investment create activity.
Increased business activity and personal consumption creates the need for more workers ("jobs").
You can spin graphs and stats but profitable business activity, not higher taxes, leads to jobs.
From an August 11, 2011 story on NPR, Reuters reports:
Economists polled by Reuters had forecast claims steady at 400,000. The prior week's figure was revised up to 402,000 from the previously reported 400,000.
...
The four-week moving average of claims, considered a better measure of labor market trends, slipped 3,250 to 405,000. Economists say both initial claims and the four-week average need to drop close to 350,000 to signal a sustainable improvement in the labor market.
http://www.npr.org/blogs/thetwo-way/2011/08/11/139524874/new-unemploymen...
Just over one year later and the new number of claims required to show improvement, with fewer people actually working, has moved up? Madness.
Given this week's 388,000 initial unemployment claims, the media now says, "[m]any economists believe a reading below 400,000 points to an improving labor market." That's from Reuters on 10/18/12. Really?! So if 399,000 people continue to get laid off for the next 1-50 years, all is well in the USA? Come on man, just simple logic. It's 2012, companies still hacking payrolls by 300,000+ and sending every job not nailed down overseas or replacing it with someone new to our shores (but more labor arbitrage, more, more more), or making people reapply to their own jobs and then hiring them back at a discounted wage or as interns for free. But hey, economists and the media keep upping the ante, so the number used to be under 300,000, then mid-300s, now it's anything under 400,000 and all is well. Watch next week when this number is inevitably increased up from 388,000, I'm guessing just under 400,000 because almost all other revisions are up and must be kept under 400,000 because that's "improvement" in the labor market. If it can't be kept under 400,000, look for the new "improvement" number in the labor market to be upped to 425,000. Yes, they are this obvious about changing the measurements and signs of improvement and deterioration. So blatant, it's sad that people get paid for this crap while 27 million other people are left out in the cold like Dickensian street children staring at liars and manipulators enjoying a warm meal next to a fireplace.
It looks like many retirement age or near retirement age are forgoing retirement or re-entering the job market. This is bad for the younger workers because one experienced retiree leaving pays for two or three new people to enter the market.
Also interesting is the almost universal 85% participation rate in '99. What is so different (besides dot-com bubble, housing bubble) between '12 and '99?
They completely ignore the occupational statistics vs. the degrees awarded to U.S. citizens in STEM, that the U.S. is graduating way more STEM than there are jobs available as it is. Both of them will labor arbitrage engineers & scientists.
Obama claims only "low pay and repetitive jobs" are offshore outsourced. That is completely wrong, the high pay, career oriented jobs are being offshore outsourced.
Advanced R&D was and is being offshore outsourced, not just Computers, Engineering but Chemical engineering, pharmaceutical research, the list goes on and on. The highest paying middle class jobs are being offshore outsourced and also these are supposedly the jobs which generate "more jobs". (not if you offshore outsource your manufacturing do they!).
Pages