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The Job Market’s February Crumble

The raw numbers tell the ugly story.

by
Tom Blumer

Bio

March 8, 2014 - 12:02 am

Friday morning’s monthly jobs report from the government’s Bureau of Labor Statistics showed a level of February job additions which the establishment press quickly portrayed as tremendous news.

The Associated Press described the results as “a welcome surprise,” achieved “despite a blast of harsh winter weather.” Bloomberg News claimed that “the U.S. economy is starting to shake off the effects of the severe winter weather.” Reuters heralded it as an “upbeat sign for weather-beaten economy.”

Opportunistic Obama administration Labor Secretary Thomas Perez crowed: “We’re moving in the right direction.”

Do not be fooled. Especially be wary of “the prevailing view of economists,” which is that “when the weather warms up, so, too, will the U.S. economy.”

All of the “surprise” in Friday’s employment report lies in how BLS could possibly have converted truly awful raw data into decent-looking numbers — 175,000 payroll jobs added overall, with 162,000 of them in the private sector — after performing its seasonal adjustment calculations. We had better hope that the raw numbers came in as weak as they did due to February’s rough weather. If they didn’t, we may be facing the worst year in the job market since 2010.

For those unfamiliar with the process, “seasonal adjustment” is “a statistical method for removing the seasonal component of a time series that is used when analyzing non-seasonal trends.” In layman’s terms, it’s an attempt to smooth out results which fluctuate throughout the year to present them in proper context.

For reasons which I have never understood, economists, analysts, and especially reporters seldom go beyond the seasonal adjustment calculations to look at the raw, not seasonally adjusted data, aka the report presenter’s best estimate of what actually happened. This has always been a negligent practice; but it’s especially dangerous now. That’s because, as I wrote last year, “five years of the Obama economy render the government’s seasonally adjusted numbers virtually worthless.” As we near six years since the Pelosi-Obama-Reid economy began, its erratic nature continues to disrupt normal seasonal patterns.

Let’s look at how bad February really was, and at how the government’s seasonal calculations larded tons of lipstick onto a couple of really ugly pigs:

NSAandSAjobAddsJan2008toFeb2014

February’s figure of 750,000 jobs added overall was the worst February since 2010, the final month of the Obama economy’s extended “jobs recession.” (The administration likes to crow about its 48 months of consecutive though sometimes tepid job growth, but always overlooks how it managed to unprecedentedly extend job losses a full eight months after the recession officially ended in June 2009.) “Somehow,” that result, which is 288,000 jobs below last year’s 1.038 million, converted to 175,000 seasonally adjusted jobs added, only 105,000 fewer than last year’s 280,000. In the context of both February 2013 and February 2012 — BLS seasonally adjusts using five years of data, but weighs recent years more heavily — the reported result should have been barely above zero, in which case we’d be seeing the press citing the weather as the go-to excuse instead of something the “resilient” job market heroically overcame.

The private sector’s reported 300,000 job additions in February is 46 percent lower than last February’s 553,000, and is thus even more troubling. In historical context, its seasonally adjusted result should also have come in barely positive.

Unfortunately, those who suspect that BLS may have fudged its presentation now have some basis for holding that belief. Since January 2013, fever swamp leftist Erica Groshen has occupied an influential perch as its commissioner of Labor Statistics. As an opponent of her nomination said in 2012, “To place at the head of the bureau someone with a far-left record … has the potential to diminish the believability of the information that they produce.” The narratives in BLS’s monthly employment reports during the past year have clearly come across as more selective, inconsistent, and politicized than in the past. One would hope that Groshen’s influence only extends that far, but it would be foolish to dismiss the possibility that it doesn’t go further.

The job market’s clearly bad February could not have come at a worse time, as I’ll explain on the next page.

The five months from February through June have traditionally been the time when employers are most actively hiring. As a result, the economy almost always adds millions of jobs. A job market with as much unutilized and underutilized labor as this one should be adding at least 5.5 million not seasonally adjusted (i.e., actual) jobs during these five months. As seen above, the Obama economy hasn’t come anywhere close to achieving that result in any of the three years since the jobs recession ended, falling short by about 1.4 million in 2011 and 2013, and by about 1.6 million in 2012.

Based on February’s awful results, this year may be shaping up to be even worse than the previous three, just in time for what is supposed to be peak hiring — hence my earlier suggestion that we had better hope that February’s bad weather is what seriously hurt the results. If it’s not the cause, we’re in for a very rough ride in the coming months.

It’s not too early to raise the distinct possibility that February’s awful results have far more to do with destructive federal government policies and programs than with ice and snow. Of special concern is its newest and most comprehensive initiative. Obamacare anyone?

Along with having a decades-long career in accounting, finance, training and development, Tom Blumer has written for several national online publications primarily on business, economics, politics and media bias. He has had his own blog, BizzyBlog.com, since 2005, and has been a PJM contributor since 2008.

Comments are closed.

Top Rated Comments   
Tom, it would be fascinating to have someone with access research what the Propaganda Machine wrote for similar numbers in a Republican administration, or perhaps better stated, ANY numbers in a Republican administration.

I posit a theory that UNEXPECTEDLY we will find that the reporting somehow is inconsistent.

As for "climate change" overcoming a harsh winter where the cold is caused by warming, we soon get to summer heat which is caused by bull crap...releasing methane into the political atmosphere.

This is not a jobless recovery. Because this is not intended to be a recovery. It is intended to infuse anti-capitalist programs into the free market economy. From the EPA to the IRS to the DOJ to the FCC far leftist agents are acting in concert to do what Soros has stated openly, Ayers stated openly, Cloward-Piven stated openly, the Midwest Academy stated openly, one World Socialists stated openly, the New party stated openly, Frank Marshall Davis stated openly...what they wanted to do to capitalism.

UNEXPECTEDLY...Obama and this cabal of treasonous far leftists, "appear" to have the bizarre coincidence of implementing them.

But Tom, this is the weekend at PJM. So please try NOT to connect any dots. After all, if you do you are exaggerating. Can't they just be wrong? Don't you dare look at what they have written, compare it to what they have done and call it an intentional conspiracy. That would make you an hysteric.

At least on the weekends here.

Obama has NO connection to far leftist anti-capitalism. Ignore his lifetime attachment to it.
41 weeks ago
41 weeks ago Link To Comment
Fly on the Wall

JACK LEW: Regarding unemployment, sir. You’re spending so much we can’t print money fast enough to keep up. Let’s create thousands of construction jobs with a crash program to build an additional half-dozen mints.
OBAMA: Mints! Jack knows I love my confections. Six new mints it is.
VALERIE JARRETT: Those jobs won’t be enough to make a big difference in November, Barack.
OBAMA: True. Problem is, every trick in the book only lowers the last jobs report before midterms down to maybe 6%. I want it at 3% or less.
LEW: We could cut the rate by hiring the ten million officially unemployed to locate and register the seven million who’ve stopped looking for work. We’d offer excellent salaries and benefits.
OBAMA: Hmm. Then I can truthfully say I created ten million good jobs. But what do we do with them when they’ve finished their assignment?
LEW: We hire all seventeen million as Labor Department information specialists. Their task: identifying the nation’s twenty million underemployed.
VALERIE JARRETT: And the underemployed, once we’ve identified them?
LEW: We award them federal grants and tax breaks to start small, green businesses. We promise government will be the primary purchaser of their goods and services. Failure is impossible.
JARRETT: Ah, then we mandate they hire the folks we hired to find them.
OBAMA: Oh man, by November we might be dealing with a labor shortage. Can we hold Bush responsible should that happen?
41 weeks ago
41 weeks ago Link To Comment
All Comments   (20)
All Comments   (20)
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Sorry, this article is poorly researched with the author looking for any data point in the voluminous BLS datasets to discredit the current administration while ignoring more complete data.

So let's compare the current recovery since the private sector bottomed out in 2010 under Obama with the previous private sector recovery under Bush from its 2003 low point. Using the seasonally adjusted figures for private sector employment (series CES0500000001), we see that private sector employment increased by 8.66M from 2010-2014 while it increased under Bush by only 7.42M from 2003-2007.

Ah, but the author hates seasonally adjusted numbers. Se we'll instead use the unadjusted numbers (series CEU0500000001). In that case the change from low to high is 10.79M (2010-2014) to 9.9M (2003-2007).

So whether using seasonally adjusted or unadjusted numbers, the change in private sector employment is between 0.8M - 1.2M higher under Obama than under Bush. The seasonal numbers are almost identical to the figures collected by the ADP Research Institute (www.adpemploymentreport.com/) which determined 8.6M (2010-2014) to 7.48M (2003-2007).

BTW, the major difference in the recoveries is the large state and local government job losses that resulted from decreased tax revenues.
41 weeks ago
41 weeks ago Link To Comment
Paul,
You seem blissfully unaware that during the last 5 years the President borrowed $7 trillion and the Fed expanded the monetary base from $600 billion to $4.3 trillion. For once, you people should forget about Bush and look at the whole picture. Bush had nearly full employment during the period 2003-2007. The economy during his tenure didn't have to add as many jobs as Obama's to reach the same employment numbers.

The period 2010-2011 should have seen a huge spike in employment (akin to the recovery of 1983-1984). The deeper the jobs losses during a recession, the steeper the job gains will be at the opposite end of the employment curve. The Recession 2001-2002 was short and not very sharp. The Recession of 2007-2009 was 18 months and was very sharp (very close to the Recession of 1981-82 as far as job losses are concerned). The rebound in jobs in 2010-2011 should have followed the jobs rebound of 1983-84. But, it did not.

40 weeks ago
40 weeks ago Link To Comment
Hi Paul. Respectfully disagree. Your analysis is for private sector only, includes Part Time employees, and does not account for the growth of population.
Let's just focus on Full Time employment. These are the kinds of jobs with the greatest liklihood of being able to support oneself and perhaps a family. The St Louis Fed publishes data series LNS12500000 - Employed, Usually Work Full Time. This is my go-to employment number. As my earlier post (see below) demonstrates, we are still over 4,000,000 full time jobs below where we were in 2007. This is after 4 years of recovery, 18 trillion dollars of federal gov't spending, amd 3 trillion dollars in Federal Reserve stimulus. 4 million full time jobs short of 2007. And there are 14 million more people today than 2007.
To see what this looks like, adjusted for population, check out the following chart of Full Time Employment as a percent of population:

http://research.stlouisfed.org/fred2/graph/?g=nKb

It is dismal. ( sorry, but I'm not tech savy enough to get the graph to display in the post )
40 weeks ago
40 weeks ago Link To Comment
Let's just focus on Full Time employment. These are the kinds of jobs with the greatest liklihood of being able to support oneself and perhaps a family. The St Louis Fed publishes data series LNS12500000 - Employed, Usually Work Full Time.
The level of full time employment reached its peak back in November 2007 when there were 121,875,000 people employed full time. The most recent data from February 2014 show that the current number of people employed full time is 117,819,000.
Thats right. Five years into the Obama presidency, after more than four years of 'recovery', and more than 18 Trillion dollars in Federal spending and there are still 4 Million FEWER prople employed full time than in Nov 2007. FOUR MILLION!!!! And thats just to get back to where we were. Since Nov 2007 the population has grown by mote than 14 million people. Where are the full time jobs for these people????

The hole that we are digging out of was very big indeed. But after 4 years of 'recovery' these full time employment numbers are DISMAL. With only more taxes and bigger government of offer in Washington, expect Dismal to continue.
41 weeks ago
41 weeks ago Link To Comment
Great post, thanks.

It's probably been over twenty years since the inflation numbers from the government could be trusted, they are way underreported to prevent indexed entities like SSN from blowing up.

The reality has also long since left the conventional job counting behind, as someone doing a lot of IT contracting I seldom show up as either employed or unemployed, looking or non-looking. Since I've done all W2 the last few years I guess I show up as "employed", but I don't know if that's "employed, temp" as it is, given the various mechanics, and of course the national summary numbers don't break that out. And don't even get me started on the dimension of real wage levels (sinking continuously for 99% of the population for the last 20 years, or maybe that's 99% of the private sector population only).
41 weeks ago
41 weeks ago Link To Comment
In a righteous world, all the laid-off and unemployed would be Obama voters.
41 weeks ago
41 weeks ago Link To Comment
The economists' polar vortex explanation reminds me of this scene from the film AIRPORT (and that we are living in the movie AIRPLANE!):

[the precocious nerd figures out they're turning around]

Mrs. Schultz: Captain, our son has a question. Schuyler, here's our captain.

Schuyler Schultz: [pointing out the window] Before, Virgo and Leo were right there, sir. Now I'm beginning to see Ursa Minor and Cassiopeia. We MUST be turning around.

Capt. Vernon Demerest: You have a young navigator here! Well, I'll tell you son... Due to a Cetcil wind, Dystor's vectored us into a 360-tarson of slow air traffic. Now we'll maintain this Borden hold until we get the Forta Magnus clearance from Melnics.

Schuyler Schultz: Oh... yes... of course!

Mr. Schultz: What did he mean by that, son?

Schuyler Schultz: Never mind, father, I'll tell you later.
41 weeks ago
41 weeks ago Link To Comment
Just go to zerohedge dot com an d type in weather in the search box. There are all sorts of articles

http://www.zerohedge.com/news/2014-02-21/it-really-just-weather

The establishment press should really be called presstitutes.
41 weeks ago
41 weeks ago Link To Comment
February was about as brutal as January, when it came to snow and wind chill. So how could the economy shrug it off?

41 weeks ago
41 weeks ago Link To Comment
Because weather is not a good proxy for hiring. A factory will still hire new workers regardless of how much snow is falling. An accounting firm still hires new analysts regardless of outside temperatures. Yes, construction will suffer; but, then we are back to the season average adjustments the BLS makes (ie the data will be smoothed out).
40 weeks ago
40 weeks ago Link To Comment
The decline continues, as do the ugly, exaggerated lies from our dishonest media. It takes a particularly debased people to mock their own minimal pretensions of honesty and truth. Given the stakes and the damage they wish to see incurred by Obama and the Dems, a very hate filled and ideologically sick group of low life's.
41 weeks ago
41 weeks ago Link To Comment
Tom, it would be fascinating to have someone with access research what the Propaganda Machine wrote for similar numbers in a Republican administration, or perhaps better stated, ANY numbers in a Republican administration.

I posit a theory that UNEXPECTEDLY we will find that the reporting somehow is inconsistent.

As for "climate change" overcoming a harsh winter where the cold is caused by warming, we soon get to summer heat which is caused by bull crap...releasing methane into the political atmosphere.

This is not a jobless recovery. Because this is not intended to be a recovery. It is intended to infuse anti-capitalist programs into the free market economy. From the EPA to the IRS to the DOJ to the FCC far leftist agents are acting in concert to do what Soros has stated openly, Ayers stated openly, Cloward-Piven stated openly, the Midwest Academy stated openly, one World Socialists stated openly, the New party stated openly, Frank Marshall Davis stated openly...what they wanted to do to capitalism.

UNEXPECTEDLY...Obama and this cabal of treasonous far leftists, "appear" to have the bizarre coincidence of implementing them.

But Tom, this is the weekend at PJM. So please try NOT to connect any dots. After all, if you do you are exaggerating. Can't they just be wrong? Don't you dare look at what they have written, compare it to what they have done and call it an intentional conspiracy. That would make you an hysteric.

At least on the weekends here.

Obama has NO connection to far leftist anti-capitalism. Ignore his lifetime attachment to it.
41 weeks ago
41 weeks ago Link To Comment
cfb, I promise that this only took 3 minutes to find, and that no new verbiage was created while searching for this February 2006 NewsBusters post:

AP Reports Very Good Jobs News, Then Gets In Its Obligatory Digs

http://newsbusters.org/blogs/tom-blumer/2006/02/03/ap-reports-very-good-jobs-news-then-gets-its-obligatory-digs
41 weeks ago
41 weeks ago Link To Comment
41 weeks ago
41 weeks ago Link To Comment
A few days ago I heard an ABC News radio broadcast where they said something to this effect; " another sure sign that the economy is recovering comes from a study showing that commuters are spending more time waiting in traffic. In other news Radio Shack announced that it is closing 1100 stores."

I wonder how those stories would have been reported during the Bush administration?
41 weeks ago
41 weeks ago Link To Comment
Radio Shack
Staples
Best Buy
Coldwater Creek
Sears
JC Penneys
Mammoth Ski Resort

The list goes on and on. And once closed those jobs aren't coming back. We are importing cars from Mexico, for god's sake. How did *that* happen???
41 weeks ago
41 weeks ago Link To Comment
Obozocare, rising unemployment/underemployment, and a diving economy are certainly going to help the Dems keep the Senate and win the House in 2014. Give it two more years into 2016, with 3000 new EPA regulations, gun control, and rising crime rates and I doubt even Hillary could win the Presidency for the Dems then.
41 weeks ago
41 weeks ago Link To Comment
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