Monday, October 8, 2012


According to September’s controversial household survey data, employment rose by a whopping 873,000, with the labor force up 418,000 and unemployment down 456,000. Monthly gains of 500,000 or more in household employment are rare, but there have been eleven of them in this volatile series since 2000. They are often followed by sharp reversals in the next monthly report.

The employment gain was attributable to an increase of 838,000 in full-time employment, while part-time employment fell 26,000. What’s odd is that among those working part-time (which edged down slightly), there was a 582,000 increase in those working part-time for economic reasons. In other words, lots of people found full-time jobs, and lots of people who wanted to work full time could only find part-time jobs. Got that? Even odder is that the payroll survey showed that employment in the temporary help industry edged down by 2,000 in September.

While I doubt that anyone at BLS tampered with the household data for political motives, I’m certain no one even thought to bother with the payroll employment numbers. September’s increase was a measly 114,000. I give much more weight to the revisions to the previous two months, which tend to be upwards when the economy is expanding. They totaled 86,000 during July and August, raising their monthly average gain to 161,500. The oddity here was that upward revisions occurred at the local-government level--mainly the hiring of school teachers (up 77,000)--which nearly matched the revision to overall payrolls.

The really good news in Friday’s report was that aggregate weekly hours in private industries rose 0.4% during September to 3.85 billion hours, the highest since November 2008. In addition average hourly earnings rose 0.3%. As a result, our YRI Earned Income Proxy, which is highly correlated with the private sector’s wages and salaries in personal income, jumped 0.7% to a record high. This augurs well for the holiday shopping season. There are only 77 days left before Christmas!

The debatable question is whether the Obama administration’s policies are creating jobs. The answer, of course, is they didn’t create them. Mitt Romney says he’ll create 12 million jobs if he is elected to be the next president. Presidents don’t create jobs. Profitable companies expand and create jobs, especially small ones that turn into big ones.

Today's Morning Briefing: Apocalypse Postponed. (1) Apocalypse Now or Not? (2) The difference between bull and bear markets. (3) Record high earnings expectations. (4) Huge relief rally in European bourses. (5) Economic surprise index heading higher. (6) Drop in Brent’s war premium as Iranians protest inflation. (7) Jack the Tweeter. (8) Earned income at record high. (9) Politicians didn’t create those jobs. (10) Lots of charging bulls among S&P 500 industries. (11) “Searching for Sugar Man” (+ + +). (More for subscribers.)

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