Summary
Earlier this morning, the Labor Department released employment data for September. The report showed a 0.2% increase in the unemployment rate, to 5.1%. There also was a reported 35,000 contraction in payroll jobs during the month, far below what the consensus forecast was looking for. However, the Bureau of Labor Statistics confessed to using what I'll term as "creative" accounting in coming up with the September payroll numbers.
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* Today's release from the Labor Department indicated that the unemployment rate in September rose 0.2%, to 5.1%. The report also showed a contraction of 35,000 payroll jobs during the month.
* The survey dates used in compiling today's release are the first that would begin incorporating the impact from hurricanes Katrina and Rita. However, the Bureau of Labor Statistics announced that because of the dates used, the influence from Hurricane Rita had a negligible impact on September results.
* The consensus forecast of today's report was looking for an unemployment rate of 5.1% -- right on target. However, the consensus prediction of lost payroll jobs ran in the 170,000 to 200,000 range, far above the actual number reported.
* BLS admitted to a "creative" (my euphemism for "rigged") approach in coming up with September payroll data. To wit:
"For the September CES estimates ['CES' = 'Current Employment Statistics survey' = 'payroll employment'], several modifications to the usual estimation procedures were adopted to better reflect employment in Katrina-affected areas. The changes included: a) modification of procedures to impute employment counts for survey nonrespondents in the most heavily impacted areas, b) adjustments to sample weights for sample units in the more broadly defined disaster area to compensate for lower-than-average survey response rates, and c) modification of the adjustment procedure for the business net birth/death estimator to reflect likely changes in business birth/death patterns in the disaster areas."
* The two components comprising each month's employment report are the household survey and the payroll survey. The unemployment rate is derived from the former, making it a visible, highly sensitive number for political purposes.
* The payroll survey represents the number generally more important to the immediate behavior of the financial markets, although it also possesses a good deal of political importance. Today's report indicated job contraction of 35,000 during September. This compared with a gain of 130,000 in payroll employment during September of last year.
(NOTE: As many readers are aware, changes in the methodology used in computing employment data have changed significantly over the last decade or so. This process has left the accuracy of the numbers increasingly suspect. This is particularly so when using them for historical comparisons. Subscribers to John Williams' Shadow Government Statistics will be apprised of hurricane-related distortions in the next edition of the publication, due out next week.)
* Today's report contained upward revisions to July and August payroll job creation: July went to +277,000 from +242,0000, while August went to +211,000 from +169,000. Thus, including revisions, payroll employment over the last three months grew by 453,000 jobs, versus the 376,000 gain before the July/August adjustments. (During the same three-month period in 2004, payroll employment rose by 401,000.)
The following table breaks out the reported growth in payroll employment over the trailing three months, versus the same period in each of the prior five years.
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TRAILING THREE-MONTH PAYROLL EMPLOY-
MENT GROWTH (Thousands of Workers)
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Mo. 2005 2004 2003 2002 2001 2000
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Sep. -35 130 94 -45 -254 118
Aug. 211 188 2 18 -138 -11
July 277 83 3 -100 -88 176
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Tot. 453 401 99 -127 -480 283
=== === == === === ===
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* For the 12 months ended September 2005, payroll employment expanded by a reported 2.161 million jobs. This compared with an increase of 1.927 jobs during the 12-month period ended September 2004. Over the six-month periods ended September 2005 and 2004, reported growth was 1.046 million and 1.094 million, respectively.
* According to today's report, average hourly earnings rose three cents during September, or by almost 0.2%, to $16.18. This compared with August's $16.15. The August figure was revised down by one cent from last month's report.
* Year over year, average hourly earnings rose 2.6%. This compares with a Consumer Price Index that rose 3.6% for the 12 months ended August (latest CPI data currently available).
* During the 12 months ended August, the year-over-year gain in the CPI exceeded the year-over-year growth in average hourly earnings in all but one of those months, exhibiting the longer-run loss of real purchasing power based on these particular series.
The table below contains the latest available results for key employment and inflation series. (NOTE: The new material contained in these tables will be posted to the "Data & Charts" section on the GRA website.)
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KEY U.S. EMPLOYMENT AND INFLATION DATA
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PAYROLL
UNEMPLOYMENT EMPLOYMENT AVERAGE HOURLY
RATE CHANGE EARNINGS
(%) (000s) ($s)
--------------- ---------- -----------------
Month Yr. Yr. Yr. Year/
/Year No. Ago No. Ago No. Ago Year
--------------- ---------- ------------------
09/05 5.1 5.4 -35 130 16.18 15.77 2.6%
08/05 4.9 5.4 211 188 16.15 15.74 2.6%
07/05 5.0 5.5 277 83 16.14 15.70 2.8%
06/05 5.0 5.6 175 106 16.07 15.64 2.7%
05/05 5.1 5.6 126 250 16.03 15.62 2.6%
04/05 5.2 5.5 292 337 16.00 15.58 2.7%
03/05 5.2 5.7 122 320 15.95 15.54 2.6%
02/05 5.4 5.6 300 94 15.91 15.51 2.6%
01/05 5.2 5.7 124 117 15.90 15.48 2.7%
=================================================
12/04 5.4 5.7 155 83 15.85 15.45 2.6%
11/04 5.4 5.9 132 96 15.82 15.45 2.4%
10/04 5.5 6.0 282 123 15.81 15.41 2.6%
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EMPLOY. COST INDEX (%)* PRODUCTIVITY (%)#
----------------------- ------------------------
Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Yr.
----------------------- ------------------------
2005 0.7 0.7 - - 3.2 1.8 - - -
2004 1.1 0.9 0.9 0.8 2.1 4.5 1.3 2.5 3.4
2003 1.2 0.9 1.0 0.8 3.1 6.6 9.6 0.8 3.8
2002 0.8 1.0 0.8 0.9 6.5 0.8 4.1 0.2 4.0
2001 1.1 1.0 1.0 1.0 -0.4 5.6 1.5 6.5 2.5
2000 1.2 1.0 0.9 0.9 -2.0 7.2 -0.9 4.0 2.7
1999 0.4 1.1 0.9 1.1 3.6 0.5 2.8 7.1 2.8
1998 0.7 0.8 1.0 0.7 3.2 1.2 4.5 2.1 2.8
1997 0.7 0.8 0.8 1.0 -1.2 5.0 3.4 1.6 1.6
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CONSUMER PRICE INDEX## PRODUCER PRICE INDEX@
-------------------------- ---------------------
Month Yr. Year/ Yr. Year/
/Year Index Ago Year Index Ago Year
-------------------------- --------------------
08/05 196.1 189.3 3.6% 156.0 148.5 5.1%
07/05 195.1 189.2 3.1% 155.1 148.3 4.6%
06/05 194.1 189.3 2.5% 153.5 148.2 3.6%
05/05 194.1 188.8 2.8% 153.5 148.3 3.5%
04/05 194.2 187.7 3.5% 154.4 147.7 4.7%
03/05 193.2 187.3 3.2% 153.7 146.4 5.0%
02/05 192.0 186.5 2.9% 152.5 145.6 4.7%
01/05 191.3 185.9 2.9% 151.9 145.7 4.3%
=================================================
12/04 191.2 185.0 3.4% 151.7 145.3 4.4%
11/04 191.2 184.6 3.6% 152.1 144.6 5.2%
10/04 190.7 184.8 3.2% 151.1 144.8 4.4%
09/04 189.6 185.0 2.5% 148.9 144.1 3.3%
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NOTE: All data are seasonally adjusted. *Total
civilian compensation, 3-month change. #Nonfarm
business output per hour, annual rates. ##All
urban, all items. @Finished goods.
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