Tuesday, December 9, 2014

Why You Shouldn't Trust The November Jobs Creation Number

Following the release of the November employment report last Friday, the headlines loudly trumpeted the fact that 321,000 new jobs had been created.  Yet, despite this, and very oddly, the unemployment rate remained the same as October's report; even though September and October were, at the same time, revised upwards to include another 44,000 new jobs.  So, all in all, there was a net increase of 365,000 jobs but no drop in the unemployment rate.  By contrast, October saw more than a third less jobs being created and the unemployment rate fell one-tenth of a percent.

But, the fact that the unemployment rate didn't go down is quite bothersome and definitely needed a closer look.

Logically, if there was true job creation, the number of unemployed should have fallen by 321,000 and, the number of employed should have risen by an equal amount; resulting in a lowering of the unemployment rate by two-tenths of a percent to 5.6%  But, when you look at the actual data, none of those things happened.

Excerpted Chart: Full Chart Linked Below

In actuality, the number of unemployed went up by 115,000.  Not down and the number of employed only rose by 4,000.  Not by the expected 321,000.  So, it's no wonder that the unemployment rate held steady.  In reality, these two facts, when taken together, actually prove that no jobs were created in the month of November.  Instead, there was a net loss of 111,000 jobs in November.

To me, this only makes sense unless, of course, there is some adjusting going on as a result of previously fudging the numbers ahead of last month's election, in much the same way that numbers were fudged ahead of the 2012 election.  We'll have to wait and see if some large media outlet reports on the very same numbers I'm seeing.


Washington Post: This is what a real recovery looks like: The economy added 321000 jobs:  http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/05/this-is-what-a-real-recovery-looks-like-the-economy-added-321000-jobs-in-november/

U.S. Adds 321,000 Jobs In November; Unemployment Rate Remains At 5.8%: http://www.huffingtonpost.com/2014/12/05/november-jobs-report-unemployment-rate_n_6271366.html

Employment Situation Summary Table A. Household data, seasonally adjusted: http://www.bls.gov/news.release/empsit.a.htm

Economy Adds 214,000 Jobs in October, Unemployment Rate Falls to 5.8%: http://time.com/3572116/new-jobs-report/

Census 'faked' 2012 election jobs report | New York Post: http://nypost.com/2013/11/18/census-faked-2012-election-jobs-report/

'Fake' Unemployment Report Shocker - Forbes: http://www.forbes.com/sites/investor/2013/11/19/fake-unemployment-report-shocker/

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