“Solid mediocrity”

Tim Duy writes:

Not the greatest, but solid and encouraging, is how I describe the October employment report.  Nonfarm payrolls gained by 171k, and the two previous months were revised upward.  Interestingly, the August number, which originally posted at 92k and cleared the way for QE3, has been revised up to 192k.  I have trouble believing that the FOMC moderates would have fallen in line with Federal Reserve Chairman Ben Bernanke in the wake of a 192k NFP gain.  This is especially true given the subsequent numbers.  In short, the August print came at just the right time, allowing Bernanke to clear away concerns of premature tightening just as the economy was set to show signs of strength.

That´s what I would call playing the “Be Happy Game”! Who will come out this time to say there was a “conspiracy” to release weak numbers last month so that Bernanke could get more FOMC members into the QE3 bandwagon? The BLS must be having a hard time collecting data if the revision is larger than the original number!

Further on Tim Duy notes:

The unemployment rate ticked up, but for the right reason – the labor force participation rate rose, hopefully signaling that improving labor market conditions are drawing people back into the labor force.  Of course, still not all is well.  For example, long-term joblessness remains high, as does employment part-time for economic reasons.

The Chart indicates that´s reading too much in one month´s data, especially given the ‘see-saw’ pattern of the downslide in the LFPR.

In fact, while last month´s large drop in unemployment – from 8.1% to 7.8% – was mostly due to the big jump in temporary employment, this month´s uptick in the unemployment rate to 7.9% was mostly due to a ‘medium sized’ drop in temporary employment.

And even with the ‘gigantic’ upward revision, the change in employment basically reflects the mediocre growth performance of the economy, while the low level of employment reflects the depth of the hole – the spending gap – the economy is still mired in.


Update: Another “I feel good about this report” enthusiast.

2 thoughts on ““Solid mediocrity”

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