Reported in the Business Insider:
Remember last Friday’s payrolls numbers–the ones that blew away expectations about the number of jobs created and got everyone talking about recovery again?Well, even at the time those payroll numbers were confusing, because the other part of the jobs report–the “household survey”–showed yet another crappy number.
But by pointing to the crappy household number and ignoring the payroll number, the bears seemed to be trying to make lemons out of lemonade.
But it turns out that there was a simple reason why the payroll numbers looked so good–a reason that had nothing to do with underlying strength of the jobs market.
What was that reason?
The government changed the “seasonal adjustment” it made to the payroll numbers–and, in so doing, boosted the number of “jobs” created in October by 100,000.
Stephanie Pomboy of MacroMavens (via John Mauldin) explains:
” ‘The seasonal bar which the payroll data must jump was (inexplicably and dramatically) lowered from prior Octobers.
” ‘Thus, in October 2009, the BLS set the bar at 870,000 jobs, similar to the 840,000 it anticipated in October 2008. This year, by contrast, it lowered the bar to 768,000. Mumbo, jumbo, payrolls presented “an upside surprise” of 100,000.’
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