We should see real worker growth - even if we net Job Losses. This makes no sense until you realize that the data is a totally different data set than the jobs data.We normally "only" see CES worker losses recorded during recessions. We have seen monthly worker growth of 0.23% to 0.27% recently. We quite frequently see monthly worker growth in the 0.15 to 0.19% range. We have seen slower month to month growth this year than we saw last year during almost every single month, as compared to 2015.
The Seasonal factors can mitigate, not eliminate, seasonally adjusted contractions. We saw weaker seasonally adjusted CES growth during 2010-2016 reported than were recorded. We have seen inventive seasonal factors during the past few months. There has been a general upward trend in the seasonal factors. The higher the seasonal factor the higher the seasonally adjusted CES private sector worker number is reported.
The Monthly Worker Growth rate appears to be slowing. We Could See a Monthly Growth Rate of 0.22%. The seasonal factor used during 2015 was lower than what we saw during 2014. If we use one of the seasonal factors used since 2008 a growth rate of 0.22% would yield a headline number of between 74,000 and 119,000 "jobs" added. This growth rate would be comparable to 2006 and 2011. If we see a growth rate, month to month, comparable to what we saw during 2007, as the economy was slowing, we could see a giant goose egg reported - depending upon the seasonal factor used.
The Annual Worker Growth rate also appears to be slowing. Last month the annual growth rate slowed to 1.69%. When we see worker growth slower than 2.00% during the Fall we tend to see that slowing in growth go negative. we see "worker fade."
If we see a monthly growth rate of 0.22% this would place us on track for an annual growth rate during November of roughly 1.63%. If we use the 2012 seasonal factor of 0.9936576 then we could see growth of under 100,000 workers. This does not maintain pace with the 0.08% growth in the workforce population.
We should see a number under 150,000 and possibly under 100,000 workers added to the economy reported this Friday. We should not see a number reported over 150,000. The big questions are what will the seasonal factors be and what kind of revisions will we see to last month's data? Last month the SA CES number for Private sector growth was reported at 142,000. If the 2015 seasonal factor had been used the reported value would have been 25,000 workers. Let's assume that this month we add 100,000 workers. If last month's data is revised down to 125,000 that 17,000 could be "added" to this month's 100,000 for a net gain of 117,000.
This article has used ranges for the expectations because it is examining trends. Think of it as a Jobs Hurricane forecast with a cone of uncertainty. This column is written to manage expectations and to hold the authors of the report accountable for skewing the data. Subsequent columns will report what actually happened, how President Obama compares to Presidents Reagan, Clinton, and George W Bush in participant creation and jobs creation, as well as what is happening to the multiple job holder market.
We should expect a number that shows slowing. Will it be skewed high by seasonal factors not used during the current administration? We could see expansion recorded and a contraction reported. It isn't likely. It is possible. The election is over. The skewing of the data may end this month for sometime after January's Jobs Report. Time will tell.
It's the economy.
Participation and Unemployment Should Drop This Month
Every month the Bureau of Labor releases the monthly Employment Situation Report, or Jobs Report. The job report is the product of the combination of two data sets. The Current Population Survey, which measures the number of jobs created or lost, part-time and full-time, the number of unemployed workers, and the number of people in the workforce population. From this data we calculate the unemployment rate and the participation rate. The second data set is the Current Employment Statistics data that measures the number of workers in the workforce. Each data set has a seasonally adjusted and a non-seasonally adjusted component. The seasonal factors change from data set to data set, category to category, month to month, season to season, and year to year.
The past few jobs reports have shown some weakness in both the job creation and worker creation numbers. The October Jobs Report reported a gain of 142,000 private sector workers when if they would have used the seasonal factor from 2015 they would have only reported a gain of 25,000 workers. It also recorded a net loss of NSA FT jobs and a gain of NSA Part-time (PT) jobs. What did receive some air=time was that we lost seasonally adjusted jobs during the month of October.
The September Jobs report revealed a loss of over 1 mill non-seasonally adjusted (NSA) full-time (FT) Jobs. It also skewed the data high for the Private sector job creation. What could have been reported as 33,000 workers added to the economy was reported as 148,000 workers.The June Jobs report revealed the truth that the President's Private Sector Job creation streak ended this May.
We can expect Full-time Job Losses and Part-time Job Gains Recorded. We have seen NSA FT job losses and PT job gains twelve of the past thirteen years. We could see 500,000 to 1 Million full-time jobs lost this month. This means that we could see a net real job loss this month.
We can expect a Net Job Loss Reported. The data is not as clear as to whether or not we will see Full-time job loss and part=time job gains reported or if we will see a decline in seasonally adjusted part-time jobs and a slight gain in full-time jobs. Four of the past eight years we have seen net job loss during November - during the jobs streak.
We should see unemployment drop this month. This may be seasonally adjusted into an increase in the number of unemployed workers. The decline in full-time jobs, added to the decrease in unemployed workers means that both the unemployment rate and the participation rate could drop this month. It is very possible that the full-time job losses this past month were seasonal jobs and ineligible for unemployment benefits. We have seen a slide in the unemployment rate and the participation rate since the End of 2009 and the beginning of 2010.
Dropping participation is masking soaring unemployment values. It used to be that if you were out of work that you were unemployed. If you have been unemployed and given up on the concept of finding a job you are neither employed nor unemployed - you are a non-participant. This column has dug into this phenomenon in the series "Four Presidents at ___ months" series. Last month the Four Presidents article found that the effective unemployment rate when the missing participants, or non=participants, were added to the unemployed population that the effective unemployment rate was between 9.74% and 12.01%. This month the participation rate should fall between last year's 62.50% and last month's 62.83%.
The CPS data is being skewed. The seasonal factors have been all over the board during the month of November.Seasonal factors declined for FT jobs from 2004-2009 and increased from 2010-2013. The seasonal factor for PT jobs had increased from 2005-2013. The seasonal factor for unemployed workers increased from 2005-2010 and has declined from 2011-2015.
We should see FT jobs drop, seasonally adjusted and non-seasonally adjusted. The ranges are given because we could see a lot of variation in the numbers . The number of participants should drop.
This is just the first part of the report. The second part of the report focuses on the workers. The CES data can double count people working two jobs. The second part of this article will focus on the CES data.