Okay, folks, stand back because here it comes. This morning was insanely busy, so it’s taken me a while to get my thoughts and numbers and such together, but this is just something I can’t let pass unexamined. After all, I don’t get paid to be a cheerleader. That’s what they pay everybody on CNBC for (except Rick Santelli.) I get paid to dig.
So here it is: I’m skeptical about the jobs report.
Yes, it’s an improvement, certainly from the first few months of this year. Of course, let’s hope we don’t have to spend another $800 billion next year to maintain this level of, how can we put this, marginal job losses. But ask yourself this: how is it that everybody was so far off?
The Bureau of Labor Statistics reported the nation shed only 11,000 jobs in November. Even the most bullish estimate was off by about 40,000, and consensus was off by at least 100,000. How exactly does that happen? Does that seem kosher to you?
MFR’s chief economist Joshua Shapiro says:
It is contrary to virtually all other evidence concerning the labor market, including a survey by ADP which is based on hard data from a much larger sample. Because the government’s report this month is an outlier, we are not prepared to throw in the towel on our expectation of a second consecutive “jobless recovery.”
Other evidence pointing to considerably weaker conditions are continued anemic readings on consumer confidence and sentiment (including specific questions concerning the labor market), employment sub-indices in ISM and other surveys, etc. Still, this is the “official” picture, and until reported otherwise by the government, these are the numbers in the books, as questionable as they may be.
So that’s why everybody was so far off: because virtually every other measure of employment showed something else.