Let’s recap negative job revisions and also discuss a reader comment “This was not a poor nonfarm payroll report.”
One of my readers commented “This was not a poor jobs report.”
I wonder what planet such true believers are on.
Job Report Stats
- Private Payrolls: Only 74,000 (and highly likely to be revised lower)
- Manufacturing Payrolls: -24,000
- Revisions: -86,000
- Involuntary Part-Time Work: +246,000
- Total Full-Time Work: -438,000
- Total Part-Time Work: +527,000
- Multiple Job Holders: +65,000
Of the 74,000 jobs added, 65,000 of them were people taking a second job!
To the above data, my dear reader responded “I would hardly characterize this as a very poor report. It was an OK report, certainly not indicative of the economy currently being in a recession.”
The comment displays a massive amount of economic cluelessness about jobs and lagging indicators.
Great Recession Job Details
- The most recent revision in December of 2007, one month before recession, the economy added 105,000 jobs.
- The most recent revision for January 2008, with the economy in recession, shows the economy added 1,000 jobs.
Dot-Com Bust Recession
- In March of 2001, the month preceding recession, jobs were +145,000 at the second revision,
- Eventually, the BLS revised that to +51,000.
August 1991 Recession
- In July of 1981, one month ahead of recession, jobs were a whopping +383,000! The first revision was to +351,000. The second revision was to +265,000,
- In August of 1981 (the recession had already started), the initial report was +61,000. The first revision was to +49,000. The second revision was to +21,000.
- In September of 1981 (recession was two months old), the initial report was -54,000 but the BLS revised that up to +47,000 on the first revision, then an amazing +132,000 on the second revision.
August 1991 Recession Revisions
To recap, three months into the 1991 recession (the December report for November) the BLS was reporting +132,000 payrolls.
Only later (I believe a benchmark revision over a year later), did the BLS start reporting negative numbers.
Even then, the most recent revision for the month ahead of the recession was still +111,000.
Well not to worry, QTPie tells me “This certainly not indicative of the economy currently being in a recession.”
Things Consistent With Recession
- Private Payrolls: Only 74,000 (and highly likely to be revised lower)
- Manufacturing Payrolls: -24,000
- Revisions: -86,000
- Involuntary Part-Time Work: +246,000
- Total Full-Time Work: -438,000
- Total Part-Time Work: +527,000
- Multiple Job Holders: +65,000
Hmm. Somehow that list looks familiar.
Things Also Consistent With Recession
100% Consistent With Recession
For those who may have missed it (or ignored it on the basis of an OK jobs report) please consider a Key Recession Indicator Gives Stronger Recession Signal in August
A modified McKelvey recession indicator with no false positives or false negatives since 1953 suggests we are in recession now.
Not to worry, jobs are “OK” because the BLS is very believable. If you can’t trust the BLS monthly job reports, what can you trust?
Oh, there’s just one more small thing consistent with recession, Fed rate cuts. When is it that the Fed starts starts cutting rates?