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According to the official data, jobs growth in the first quarter of 2016 was solid, if unspectacular. The problem though, as I’ve noted before, is that the Labor Bureau — a totally non-Orwellian sounding agency –doesn’t report straight figures. In order to round out the data over the year, so as not to produce any misleading big changes in either direction, the BLS uses “seasonal adjustments” to massage the actual figures.
Typically, businesses hire a lot of temp workers in the fourth quarter of each year — especially in retail, to cover the Christmas rush. Then in January a lot of people lose their jobs, and of course February and March are typically slow months, too. And so in the first quarter of each year, the Labor Bureau massages the numbers like Monica practically killing Chandler with kindness in the old Friends clip above.
The payroll processing company ADP reported early Wednesday that businesses added 156,000 jobs last month, the weakest pace in three years. Economists expected an increase of about 200,000 in April. A separate report on service industry activity in the United States will also be closely watched for any sign of global uncertainty affecting the country’s economy, which had slower growth in the first quarter of 2016.
The jobs figure was significantly worse than expected. The weak reading bodes poorly for the broader job market survey scheduled for release on Friday from the Labor Department, which is one of the most closely watched reports on the economic calendar. Economists expect the government to report that employers created 200,000 jobs last month and that the unemployment rate held steady at 5 percent.
April is the first month of the second quarter — when BLS does fewer naughty things to the raw data. And, lo!, suddenly the jobs picture doesn’t look so good.
These figures I found last night are from payroll company ADP, rather from BLS. The Labor Bureau will produce its report on Friday, which oftentimes differs wildly from ADP’s. One suspects that a private payroll company might not feel quite as much political (we’ll put this gently) desire to massage the data — but we’ll see.
As we’ve learned the last seven years, the real numbers to pay attention to are the U-6 gauge of broader unemployment, and payroll tax collection. Both are far more accurate measures of how the American people are doing — and neither gets the SCREAMING HEADLINE attention they deserve in this Golden Age of Obama.
Stay tuned.
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