The Non-Farm Payrolls estimates for November were a surprise: to supporters and opponents alike of Obama’s policies.
Let’s look at a few comments:
Casey Research has a great piece entitled: “She’ Breaking Up, Capt’n!. His key reason for the upswing: employers are hiring temp staff in anticipation of the Xmas holidays. The report makes two telling points:
- That only areas which saw an increase in jobs were: government, health and temp services.
- There is a strong correlation between a decrease part-time employment and the end of recessions. That’s because in an economic downturn, businesses favor hiring part-time workers over full time. Only when economic conditions are on the mend do employers reduce temporary workers in favor of full timers.
Figure 1 shows the temp job and recession relationship
FIGURE 1 Chart supplied through the courtesy of Casey Research
Casey makes a good point. But I find it hard to believe that the explanation accounts for the massive difference of 90K jobs.
Another explanation is afforded by John Snow of Shadow Stats:
(BTW I find this a great service).
“Despite the announcement of a pending 824,000 downward benchmark revision to May 2009, which means a likely ongoing downward revision of 200,000 jobs per month to current monthly payroll estimates, September and October data were revised upwards, sharply. The benchmark revisions and current corrections will not be published until February 2010. In the interim, the unadjusted payroll levels revised upward in October by 103,040, and the October adjusted level was revised higher by 159,000, well beyond the government’s 95% confidence interval of +/- 129,000 jobs, and again warped by monthly revisions to the concurrent seasonal adjustment factors”
(Emphasis mine)
Of course not all agree the figures were less than genuine, see an article by ECRI at NPR:
Speaking for myself, I recall a not too distant past (certainly within the past 30 months) when we saw two consecutive figures that were wildly out of whack. The first was well over and the second was well under. My question: will we see a reversal of the November figure in December? I was (and I am) expecting worse than expected figures for Dec 2009. It will be interesting to see if we see the same pattern.
Refer this blog post to a friend or colleague…
