In the debate over whether the establishment survey nonfarm payroll employment series is seriously overestimating recent (particularly Q2) employment, a reader querulously asks “So you’re saying the Philly Fed screwed up its analysis and we should ignore its work? That’s your view?”. Short answer to first question: No. Short answer to the second question: see below.
Author Archives: Menzie Chinn
Data Paranoia Watch: “I’ve read that others think the CES was manipulated to provide a more rosy picture heading into the election”
That’s a quote from Mr. Steven Kopits, on why the CES survey showed such a rosy picture on NFP growth. This statement joins a long pile of such allegations, e.g., Senator Barraso, Jack Welch, former Rep. Allan West, Zerohedge, Mick Mulvaney, among others. All I can say is that (1) if there was a conspiracy, they didn’t do a very good job, or (2) it’s a conspiracy so vast that it encompasses not only the other offices of the BLS, but also to ADP.
Can the Increase in Multiple Job Holders Account for the Majority of the CES-CPS Job Creation Discrepancy?
Self-declared policy analyst Steven Kopits comments:
The Employment Release: The Business Cycle Assessed, Accounting for Labor Measurement Issues, Weekly Indicators
The employment situation release for December 2022 provides latest available monthly data on the economy’s conditions. Here’re a variety of labor market indicators:
Trade Deficit Shrinks Dramatically: Interpretations
The trade balance [November release] rose to -$83.3 billion vs. Bloomberg consensus of -96.3 billion. The goods trade deficit with China also shrank sharply.
Lumber Prices near Consumers
Futures prices and PPI have come down (see here). The question is whether the consumer (say a house builder) has seen comparable price decreases. Here are two pictures that suggest they have.
Wells Fargo: “Nonfarm Payrolls: Too Good to Be True?”
From House and Pugliese at WF today:
- The buoyancy of nonfarm payroll growth has seemed at odds with other signs that the jobs market is beginning to sour. …
- Yet the jobs market is hardly falling apart. A holistic look at the data suggests that directionally the labor market is weakening, but at a measured pace and from a remarkably strong starting point. Not only do signals of demand remain strong on an absolute basis, but job switching remains elevated and the unemployment rate remains exceptionally low at 3.7%.
The Jobs Worker Gap in November [Updated to December]
[Updated to include December data] Late to the commentary, here’s a picture of the jobs-workers gap for November, based on JOLTS data:
ADP Release, and the Flat Employment Growth in Q2 Thesis
The relatively volatile household survey employment series and the Philadelphia Fed’s estimated preliminary benchmark adjusted series suggest flat employment in Q2 (although NOT in H1); see graphs in this post. The ADP release on private nonfarm payroll (NFP) employment today (surprising on the upside 235K vs 150K consensus) suggests otherwise, when taking into account the relatively small change in government employment over the relevant period.
Coincident Indicators of Recession: VMT, Heavy Truck Sales, Sahm Rule
Ever wonder whether vehicle miles traveled (VMT) does a good job of predicting recessions. Wonder no more. First take a look at what VMT does over recessions, versus heavy truck sales (suggested by Calculated Risk at some points), and the eponymous Sahm Rule (real time version).