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Friday, May 03, 2013

One Of The Strangest Employment Reports I've Ever Seen

Really, this thing is about unique. On the whole it's good news (consonant with the longer trend in initial claims), but the underlying detail is odder than heck. 

Well, I will be going through this thing with a fine toothed comb this weekend, but here's a hint as to how weird it is:

Table A-8:
In one month, using SA figures we have the following moves:
This has to be the first clue as to what we are really seeing. First, the Establishment survey loss in construction workers is not right, so probably the construction work is showing up in the self-employed portion. Really bad March weather probably shifted all these gains over a month. The self-employed group has been ratcheting up and down rather unpredictably - February's total was similar to April's total, but March's was way down.

As a wild guess, Obamacare moves are shaping a lot of the stats we see. State governments are making changes rather industriously  to deal with the requirements, and I'm guessing that includes a lot of contracting. Also government retirements must be in high gear with corresponding shifts to contracting fueled by the government medical benefit problem.

The self-employed shift is mirrored by the non-ag part-time for economic conditions number, which rose 249,000 from March to April, but just remains lower than in January or February. So this really is going to be mostly in construction! The February-April gain in non-ag employment is close to 180,000, which makes quite a bit of sense. 

The establishment survey (Table B-1) shows a two month gain of 300,000 in non-ag, and the difference is mostly in government, which may be due to timing factors. However the establishment survey shows a net loss in construction jobs, which is not credible (but of course, the establishment survey tends not to pick up contractors). The establishment survey shows no manufacturing gains but large relative gains in services, of which a very large gain in department store employment???!!!, a very large gain in restaurants and a very large gain in temps. 
There is often a timing problem for government employment, because many of them use a monthly payroll system, whereas the household survey uses the reference week. Because of the big gap between reported government employment in the two surveys, I think most of the difference between the Establishment and Household surveys fall into two categories - government retirements and casual construction employment. They move in different directions, so the two-month gain for Establishment of 300K and the two-month gain for Household of 177K are not really that different. Note - this is comparing non-ag from Table B-1 to non-ag from Table A-8. 

Note: The broadest measure of employment we have is from Table A-1, and there YoY SA jobs increased by 1.65 million. YoY non-SA non-ag from Table A-8  jobs increased by nearly 1.9 million, which is very close indeed to YoY non-SA non-ag from Table B-1 at 2.09 million. On the same basis, private industry employment in Table A-8 increased 1.6 million, but private industry employment in Table B-1 increased  2.18 million.

So now we are the 1099% nation?
This comment has been removed by the author.
I don't think so, Neil.

I think you have an interesting situation in which a lot of small businesses with older owners may just be shutting up shop, and in which the middle-aged middle class are starting up sideline businesses.

A lot of this stuff drops out from month to month, so next month's will be very interesting. There was other weirdness in this report, such as in unemployment durations. Less than 5 weeks increased by 10K. 5 - 14 weeks increased by 10K. 15 to 26 weeks increased by 230K. Losers and temp jobs increased by 80K. Job leavers dropped by 122K. That is a big change from a year ago at at -125K. Unemployment rates dropped for HS grads with no college. -0.2. Unemployment for college grads increased +0.1.

It's hard not to think that Obamacare changes aren't having an effect, because the huge retail ad makes no sense unless it is due to lowering hours.

Things are changing in a big way.

I like to call it "the bridge to no payer," because I think the consequence is going to be a massive increase in people without coverage and a serious hit to incomes in the middle quintiles.
193,000 jobs were “estimated” into existence…

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