The primary appeal of the Establishment Survey over the Household Survey is its lack of volatility. It is believed that gives the observer a greater degree of precision in estimating monthly changes in employment. In the case of the government shutdown in October, it appears as if that view has been confirmed. The Household Survey showed a very large decline [...]
There is something very much broken in the media, particularly with regard to economic reporting. I have already commented more times than I care about the overemphasis on logical fallacies, but the proportionality of the disconnect only grows with share price inflation. Under the headline, Bull Market Shows No Sign of Death With Yellen Support, this Bloomberg article begins, “The [...]
I've been laid up the last week after a minor surgical procedure and while I haven't been that productive at getting any actual work done, it has given me a lot of time to watch CNBC and Bloomberg. The portfolio managers, strategists and assorted market soothsayers stream across my screen, talking about markets the way they always have, as if [...]
The ongoing divergence between the Establishment Survey (which is the “preferred” measure) and every other labor market indication was taken to an unbelievable extreme in October. Incongruous deterioration was everywhere but the Establishment Survey which shocked expectations with purported strength. The only strength in that survey is the straight line with which it follows, and that tells us nothing about [...]
In 1964, Milton Friedman suggested the economy behaved like a string set along a piece of wood on an upward slope. The string, hugging the underside of the wood, represented the economy moving along the track of potential (the piece of wood), rising with productivity (the upward slope, or trend). Occasionally, an external shock would “pluck” the string downward, representing [...]
The biggest avowed critique of the current method of estimating changes in economic accounts is the inability of statistical techniques to anticipate trend changes, or inflections. This gets back to the basics of statistical analysis as it relates to “seasonal” adjustments that are really driven by “trend-cycle” analysis. Until the NBER declares a recession, or more specifically a “cyclical peak”, [...]
The various government agencies tasked with estimating and calculating economic parameters and accounts perform regular benchmark revisions. The scale of revisions depend on many factors, not the least of which is the NBER’s “official” determination of the exact place in the “cycle” the economy exists in any discrete period of time. However, these accounts and estimations also are subjected to [...]
The JOLTS survey this week showed pretty much the same bleak employment environment as we have seen throughout 2013. On a seasonally adjusted basis, the rate of new job openings declined significantly from July (-180k), and now stands at a level first reached in March 2012. If job openings are at all indicative of corporate labor appetite, then there really [...]
There are a lot of potential hurdles for the markets in the coming weeks. A potential strike on Syria is foremost on the market's mind as evidenced by the rapid selloff Friday in the wake of hawkish comments by Russian President Putin. Russia and China both appear to be backing the Syrian regime while the US and France - yes, [...]
Since January, we are supposed to believe that the jobs market is recovering when the official labor force contracts by 168,000 persons? I cannot think of any economic reality where that incongruity can be resolved outside of a central planning paradise. What that means, strictly according to the numbers, is that the civilian non-institutional population rose by just shy of [...]
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