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Re: Conitnuation of positive employment trend

By: faul in ALEA | Recommend this post (0)
Sat, 04 Feb 12 10:22 PM | 74 view(s)
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Msg. 06589 of 54959
(This msg. is a reply to 06588 by Cactus Flower)

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he seemed so certain.....

"Obviously I am quite suspicious of the numbers that I see in today’s BLS press release. Remember most financial journalists and even stock market strategists do nothing more than rewrite government press releases. So do not expect very few others to question the good news.

For those of you who care, look at Table B-1, Total Nonfarm Employment in today’s BLS press release. Start with the non seasonally adjusted table that shows that in November 2011, there were 133.172 million actual jobs. Actual jobs dropped by 220,000 jobs in December and actual jobs dropped an additional 2.7 million in January. Only as a result of unknown seasonal adjustments, could the BLS report 243,000 new hires in January.

Yes, the labor market contracts during the winter and expands in the spring and summer. Could this number be manipulated? Of course it could. Is it? I don’t know. Am I the only suspicious soul out here? Hope not. Certainly feels lonely right now."

Perhaps you can correct him?


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The above is a reply to the following message:
Re: Conitnuation of positive employment trend
By: Cactus Flower
in ALEA
Sat, 04 Feb 12 9:42 PM
Msg. 06588 of 54959

Ah.

Well, if you look at the numbers in the report (and you can get November's numbers from the December report), he seems to have miscalculated. Either that, or he has a different set of numbers in mind.

But even then, he is simply using seasonality in an attempt to indicate a negative. He'd be better off stripping the seasonality out of the numbers altogether by comparing the results year over year. And there, unadjusted, you see the growth that all the rest of the numbers support.

Seasonal adjustment is not randomly formulated, by the way. Consistent methodology produces the results. Temporary employment in the retail industry booms over the Christmas shopping season (which begins at Thanksgving in the US). So it's pretty much a normal expectation for there to be a seasonal uptick in November and December employment numbers. This is one reason they make seasonal adjustments.

If you wish to avoid that process, the only recourse is to compare annual numbers to get a sense of progress. And as I posted, you find support for growth in employment in those figures. And the clear indication of an upwards trend.

Perhaps Biderman is finding that his economic models are not working out. People often condemn statistics which don't fit their theories.

For myself, I shall rely upon the figures as reported (with the usual revisions that we see a month or more afterwards). Although I do hope that folks like Biderman will check the calculations as that will ensure they continue to be reliable. If someone can show the numbers are not accurate, they ought to be changed. But one fellow's suspicions aren't much to go on.

Here, the Dallas Fed explains why seasonal adjustment takes place:

http://dallasfed.org/data/basics/seasonally.html

I strongly recommend looking up figures for yourself. I would have thought someone with the contempt you have for "sheeple" would be sceptical of derivative opinions.


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