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This morning I was shocked SHOCKED that the Morning Joe team came to such a quick conclusion that this morning's labor report numbers "don't add up."  Then they pass on the idiotic Jack Welch conspiracy tweet.  This despite all of them admitting that they don't know about economics.

This is just a quick diary to give a very basic answer -- one I haven't heard people make clearly.  

The 7.8% unemployment rate comes from the Current Population Survey  (CPS) - "a monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics."

The +114,000 payroll number comes from the Current Employment Statistics (CES) a survey of "about 141,000 businesses and government agencies, representing approximately 486,000 individual worksites, in order to provide detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls."

DIFFERENT SURVEYS, FOLKS!  The 114,000 number and the 7.8% number don't have to add up.  Furthermore, there have been several recent upwards adjustments in the employment situation -- reflecting that for some reason, recent employer surveys have been undercounting jobs.  

Please spread this far and wide to counter the Jack Welch idiots of the world.

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Comment Preferences

  •  Shout out to Meteor Blades (13+ / 0-)

    -- of whom I am sometimes critical.  His reporting on the jobs numbers explains the difference in surveys quite clearly.  Why more reporters don't understand this basic fact is simply beyond me.

    "This is not class warfare. It's math." - Barack Obama 9/19/11

    by DaveV on Fri Oct 05, 2012 at 06:33:50 AM PDT

    •  Why Should They? Do They Have Some Kind of (3+ / 0-)
      Recommended by:
      coquiero, DaveV, gramofsam1


      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Fri Oct 05, 2012 at 06:35:28 AM PDT

      [ Parent ]

      •  No, they are parrots. Highly paid parrots, (3+ / 0-)
        Recommended by:
        2thanks, myboo, DaveV

        but parrots, nonetheless. A reporter repeats and a recorder records. Both professions are attractive to instinct-driven people or creatures of habit -- people who like doing the same thing over and over again. And politicians are people who like saying the same thing over and over again -- a definite asset at a time when there was no electronic transmission and stump speeches had to be uniform, lest some whipper-snapper news person detected a difference and made a story out of it. :)

        We organize governments to provide benefits and prevent abuse.

        by hannah on Fri Oct 05, 2012 at 06:52:51 AM PDT

        [ Parent ]

  •  Boy you are going to disappoint a lot of people (7+ / 0-)

    who were psyched to find a new conspiracy.

    You and your reasonable answers.  Sheesh!


    I blog about my daughter with autism at her website

    by coquiero on Fri Oct 05, 2012 at 06:34:59 AM PDT

  •  +114k may well be +200k (6+ / 0-)

    in two months, after revisions. I'd guess all the hate the ADP report got the last months isn't all that warranted.

    •  Over the long run... (2+ / 0-)
      Recommended by:
      MKSinSA, TheLizardKing

      ADP and CES should be more or less in sync.  ADP is not designed to be a representative sample of the US labor market.  Just the segment of the market that uses automated payroll.  But I will admit, I don't know for sure whether ADP uses other sources to supplement their estimates.

      You wanna f*%^ with Big Bird? You gotta come through me.

      by DaveV on Fri Oct 05, 2012 at 06:39:47 AM PDT

      [ Parent ]

      •  As I noted in ... (0+ / 0-)

        ....this diary over the long run, ADP and CES have been pretty much in sync. An excerpt:

        ADP bases its report on the payrolls it processes for some 430,000 businesses covering about 24 million employees. [Methodology here.] BLS bases its report on its Current Employment Statistics survey of 410,000 worksites. [Methodology here.]

        Over the past six months ending in August, the BLS has reported 629,000 new seasonally adjusted private-sector jobs have been created, with 49,000 lay-offs in the public sector. The ADP, on the other hand, has reported the creation of 978,000 new private-sector jobs, also seasonally adjusted. A huge disparity.

        However, if you take into account the past 18 months, it's another story. For the eight months from March-October 2011, the BLS reported more private-sector jobs than ADP. In fact, 388,000 more. This was followed by a four-month "transition" in which ADP reported more jobs one month and the BLS reported more the next. Since March of this year, ADP has reported more.

        For the entire 18-month period, ADP has reported a gain of 2.887 million new private jobs. BLS has reported 2.917 million new jobs. Remarkably close. Especially when compared with often large differences between them each month.

        Don't tell me what you believe, show me what you do and I will tell you what you believe.

        by Meteor Blades on Sat Oct 06, 2012 at 10:08:12 AM PDT

        [ Parent ]

  •  I happened to have Faux News on (3+ / 0-)
    Recommended by:
    DaveV, coquiero, TheLizardKing

    when the numbers were released. Stu Varney and his cohort jumped to conspiracy in about 15 seconds. Seeing the sullen faces of the Fox & Friends hosts started my day on the perfect note. It's that look they always have before the producers give them their notes and they now how to spin it: like, uh oh, I just fell in the washing machine, what do I do now?

    "I had seen the universe as it begins for all things. It was, in reality, a child's universe, a tiny and laughing universe." Loren Eiseley

    by cadejo4 on Fri Oct 05, 2012 at 06:43:40 AM PDT

  •  Joe whatever the republican... (4+ / 0-)
    Recommended by:
    DaveV, coquiero, TheLizardKing, gramofsam1

    Before the numbers, he was gloating about Romney performance at the debate, a performance of lies; these lies did not bother Joe one bit, as a matter of fact, he embraces these.  Now, the unemployment numbers drop, Obama did not prepare the report, but listening to Joe and you would think Obama personally prepare the report.  Before this report, lying was a good thing, now he surprised about a independent report...because it benefits the President.

  •  Thank you for the clear, succinct explanation. (3+ / 0-)
    Recommended by:
    DaveV, coquiero, MKSinSA

    My poor husband left for work only hearing the "bad" report and he was so despondent I thought he might throw himself in front of his bus.  

    I just texted him the second story about the drop in the jobless rate, which brought him back from the abyss, but we both wondered how the two stories could both be out on the same day.  

    Metaphors be with you.

    by koosah on Fri Oct 05, 2012 at 06:44:06 AM PDT

  •  Excellent Diary (3+ / 0-)
    Recommended by:
    coquiero, DaveV, gramofsam1

    Maybe the media companies will someday hire people who know what they are talking about. 310 milllion people in the US and this is what we get?

    •  We probably have the dumbest punditocracy (3+ / 0-)
      Recommended by:
      MKSinSA, myboo, gramofsam1

      in the world.  Reporting on politics is fun -- you get to shmooze with interesting people, drink all hours of the night to get people to divulge information, etc.  Understanding politics is hard.  You have to read mindnumbing reports.  You probably have to take some courses in economics, policy evaluation -- maybe even hard sciences to understand things like pollution and climate.  That's why people like the Morning Joe team and Chuck Todd drive me up a wall.  They practically revel in the fact that they don't know anything about policy.  I think the worst offender is Mike Barnicle -- the guy is basically proud of his ignorance.

      You wanna f*%^ with Big Bird? You gotta come through me.

      by DaveV on Fri Oct 05, 2012 at 06:50:30 AM PDT

      [ Parent ]

  •  CNBC pointed this out too (1+ / 0-)
    Recommended by:

    Most people have never realized that they are driven from two different sets of data.  Now you have the right wing calling bullshit.  My question to the wingers is if the President has control of the unemployment rate, why did he ever let it tick up to 10%.  I would say that asking that question would deflate their bubble but I'm sure their retort would be that he wanted it to go up so he could bring it back down right before the electon.  I'm shocked that the price of tin hasn't exploded given how many hats are being made for all of these crazies.  

  •  CES is slow to pick up small biz changes (0+ / 0-)

    When the Bush recession began, the CES failed to pick up how hard it was hitting small biz. The corrections were all downward for months.

    With the Obama recovery, the CES numbers have been slow on the uptake and have needed to be revised upward.

    Note that the Republican debt hostage crisis hurt the economy for a few months and in that case the CES numbers had to be revised downward for a few months.

    look for my eSci diary series Thursday evening.

    by FishOutofWater on Fri Oct 05, 2012 at 06:57:15 AM PDT

    •  Notably, the CES excludes self-employed. (0+ / 0-)

      So people who, for example, are independent contractors are not counted.  These numbers can change rapidly during times of economic transition (both a recovering and shrinking economy).  

      On the issue of small business, CES claims that about 40 percent of its sample is businesses of 20 workers or less.  Not sure how that stacks up to, say, tax returns as a benchmark.

      You wanna f*%^ with Big Bird? You gotta come through me.

      by DaveV on Fri Oct 05, 2012 at 07:05:01 AM PDT

      [ Parent ]

    •  Many other "green shoots" of economic (1+ / 0-)
      Recommended by:

      recovery including new home construction backlogs, durable order increases, and improved consumer confidence have appeared in recent monthly reports.

      Employment figures are always the last to improve during a recovery. Given the other improving statistics this change is not unexpected. I'm sure most economists will put down "conspiracy" talk.

      GOP - "Home of the Whopper!"

      by Templar on Fri Oct 05, 2012 at 07:09:37 AM PDT

      [ Parent ]

      •  I've heard that Obama has been saying (1+ / 0-)
        Recommended by:

        privately that he knows that a major economic lift is just around the corner.  One of the things that bothers him most about possibly losing to Romney is that he (and trickle down ideology) would get the credit for it.

        You wanna f*%^ with Big Bird? You gotta come through me.

        by DaveV on Fri Oct 05, 2012 at 07:24:45 AM PDT

        [ Parent ]

        •  That jerk Romney will not win. He's only had one (2+ / 0-)
          Recommended by:
          DaveV, gramofsam1

          good news cycle in sometime, and now that's over. The DOW is the highest it has been since December, 2007 this morning!

          Unemployment rate lowest since Barack took over.

          The Dow Jones average highest since one year before Barack took office.

          And just what the hell has Romney got!


          GOP - "Home of the Whopper!"

          by Templar on Fri Oct 05, 2012 at 07:42:35 AM PDT

          [ Parent ]

  •  Also, The New Percentage Reflects Several Months (0+ / 0-)

    In addition to last month's numbers, the numbers for the preceding two months were revised to reflect more accurate data.

    On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

    by stevemb on Fri Oct 05, 2012 at 07:00:00 AM PDT

  •  Jack Welch is not an idiot, he full well knows (1+ / 0-)
    Recommended by:

    all that.

    Perhaps a better word would be evil fuckwad.

    Or two words, as the case may require.

  •  Yes (0+ / 0-)

    There are different studies.

    ADP for example is solely private sector jobs whereas the official jobs number also includes the public sector.

    The official jobs number is "U-3."

    However the real full time unemployment rate is U-6 = 14.7%.

    So the numbers aren't being manipulated rather it's a question of what numbers are being used.

    The reason for showing U-3 instead of U-6 makes sense.

    A big part of recovery is business/consumer confidence.

    This is harder with a bigger unemployment #.

    So let's hope unemployment continues to lessen as it has this month.

    going forward a lot of work still needs to be done to grow jobs.

    "And there are those who give and know not pain in giving, nor do they seek joy, nor give with mindfulness of virtue; They give as in yonder valley the myrtle breathes its fragrance into space" Khalil Gibran

    by bcdelta on Fri Oct 05, 2012 at 07:30:35 AM PDT

    •  I am not sure how much business confidence (1+ / 0-)
      Recommended by:

      turns on official reports of unemployment -- whether U-3, U-6 or any other measure.

      Business confidence likely comes from their perception of market demands relative to supply costs.  If a business sees skyrocketing demand and relatively stable costs, then they will report higher confidence -- even if unemployment is high.  If a business sees low demand and increasing costs, they will report lower confidence -- even if official unemployment is low.  Official unemployment reports lag real changes in the economic fundamentals.

      You wanna f*%^ with Big Bird? You gotta come through me.

      by DaveV on Fri Oct 05, 2012 at 07:47:38 AM PDT

      [ Parent ]

      •  BLS (0+ / 0-)

        Has been counting employment this way for a while.

        So it's not a recent change.

        The BLS revised the CPS in 1994 and among the changes the measure representing the official unemployment rate was renamed U3 instead of U5.
        Bush however kicked around the idea of reclassifying fast food burger assembly as manufacturing to hide the fact that so much manufacturing had gone overseas.

        Both biz/consumer confidence are effected by unemployment numbers.

        If you have a few months of unemployment dropping then this is very positive news.

        So biz/consumers are more apt to start spending.

        "And there are those who give and know not pain in giving, nor do they seek joy, nor give with mindfulness of virtue; They give as in yonder valley the myrtle breathes its fragrance into space" Khalil Gibran

        by bcdelta on Fri Oct 05, 2012 at 08:08:51 AM PDT

        [ Parent ]

      •  Here's an example (0+ / 0-)

        Retail does almost 50% of sales in Q4 - at least for tech.

        So how much inventory does Macy's order or Amazon for that matter.

        They base it on current sales + they have to anticipate consumer demand.

        If unemployment keeps dropping then they will order more inventory.

        Too little inventory and they miss sales.  Too much and they lose money because to move it they have to drop prices and buying inventory and owning it costs money.

        Behind retailers the manufacturer's also have to guess sales so they have sufficient raw materials to build the required inventory.

        So businesses certainly look at non-farm payroll and other economic data.  

        "And there are those who give and know not pain in giving, nor do they seek joy, nor give with mindfulness of virtue; They give as in yonder valley the myrtle breathes its fragrance into space" Khalil Gibran

        by bcdelta on Fri Oct 05, 2012 at 08:30:59 AM PDT

        [ Parent ]

        •  Maybe retail sales. (0+ / 0-)

          That's a good observation.  But I don't see the case for other sectors.

          You wanna f*%^ with Big Bird? You gotta come through me.

          by DaveV on Fri Oct 05, 2012 at 08:38:06 AM PDT

          [ Parent ]

          •  It doesn't (0+ / 0-)

            apply to everything but it does to a lot.

            Aircraft would be based on actual orders.


            "And there are those who give and know not pain in giving, nor do they seek joy, nor give with mindfulness of virtue; They give as in yonder valley the myrtle breathes its fragrance into space" Khalil Gibran

            by bcdelta on Fri Oct 05, 2012 at 10:15:48 AM PDT

            [ Parent ]

  •  DONOT watch Morning Blow! (0+ / 0-)

    Why?  They will make your head explode with Blow Scareborough and his not-to-well-hidden disdain for PBO, Mika the sock puppet, and the others on the (dearth) panel!  They will make you throw up in your coffee and cereal.

    STOP IT!  This is hard!.......LOL

    As my friend said," I am not renting out space in my head to anybody."

    by RO45 on Fri Oct 05, 2012 at 08:02:31 AM PDT

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