Flash Update
The seasonally-adjusted, annualized real (inflation-adjusted) fourth-quarter
GDP growth rate of 3.47% +/- 3% was up from 1.96% in the third-quarter;
fourth-quarter 2006 year-to-year growth was 3.38% versus 2.96% in the third
quarter and against 3.15% for fourth-quarter 2005. Annual average growth for
2006 also was 3.8% up from 3.22% in 2005. About half the quarterly growth
rate was accounted for by an unbelievable reduction in net exports, with
another quarter of the growth reflected in reduced inventory change. While
the trade deficit has narrowed recently, that has been due to lower oil
prices, not to reduced physical volume of the deficit. Presumably it is the
latter measure that is reported in the "inflation-adjusted" GDP.
This Friday's (February 3) release of January payroll employment faces three, major unusual factors that could distort growth. First, the January payroll survey was early enough in the month to show continued benefit from the unusually mild weather that continued briefly into the New Year. Second, the monthly bias factor swings sharply to the downside in January from December. Last year, the bias moved from a positive 63,000 in December 2005 to a minus 193,000, or a negative swing of 256,000 jobs. Although the Bureau of Labor Statistics (BLS) has improved its seasonal adjustment process significantly in accommodating this swing, there still is some downside bias built into the results.
Finally, the pending release will adjust recent history for the annual benchmark revision, with a promised upward revision of 810,000 jobs to the seasonally-unadjusted March 2006 payroll level. Such gives the BLS the ability to generate any level of jobs growth that it desires for January. Despite underlying economic reality favoring a weak number, with the sudden "economic recovery" beginning to fade as rapidly as it appeared, almost anything is possible. My betting leans towards a result on the upside of expectations, with an upward revision to the bias factor and warm weather winning out. If the January report is "positive," then the February jobs report is at high risk of exacerbating what then will be new recession fears.
Further details of the GDP and employment reporting will follow in the next newsletter.
Next Newsletter
When we first published the Shadow Government Statistics newsletter, it regularly came out in the week following the release of the monthly jobs data. Over time, publication has inched later in the month to the point that we now have come full circle. The January newsletter will be published next week as the January/February 2007 edition. All subscribers and those in the renewal process, as of today, are having their subscriptions automatically extended by one-month to accommodate and reflect this.
E-Mail Notifications
With the increasing use of spam-filters, we are concerned that some of you may not be receiving our email notifications which are sent whenever a new piece is posted on the site.
This Flash Update has been emailed to all subscribers and so if you do not receive it, would you please let me know by emailing me at shadowstats@hotmail.com?.
Best wishes to all,
John
Walter J. "John" Williams
This Friday's (February 3) release of January payroll employment faces three, major unusual factors that could distort growth. First, the January payroll survey was early enough in the month to show continued benefit from the unusually mild weather that continued briefly into the New Year. Second, the monthly bias factor swings sharply to the downside in January from December. Last year, the bias moved from a positive 63,000 in December 2005 to a minus 193,000, or a negative swing of 256,000 jobs. Although the Bureau of Labor Statistics (BLS) has improved its seasonal adjustment process significantly in accommodating this swing, there still is some downside bias built into the results.
Finally, the pending release will adjust recent history for the annual benchmark revision, with a promised upward revision of 810,000 jobs to the seasonally-unadjusted March 2006 payroll level. Such gives the BLS the ability to generate any level of jobs growth that it desires for January. Despite underlying economic reality favoring a weak number, with the sudden "economic recovery" beginning to fade as rapidly as it appeared, almost anything is possible. My betting leans towards a result on the upside of expectations, with an upward revision to the bias factor and warm weather winning out. If the January report is "positive," then the February jobs report is at high risk of exacerbating what then will be new recession fears.
Further details of the GDP and employment reporting will follow in the next newsletter.
Next Newsletter
When we first published the Shadow Government Statistics newsletter, it regularly came out in the week following the release of the monthly jobs data. Over time, publication has inched later in the month to the point that we now have come full circle. The January newsletter will be published next week as the January/February 2007 edition. All subscribers and those in the renewal process, as of today, are having their subscriptions automatically extended by one-month to accommodate and reflect this.
E-Mail Notifications
With the increasing use of spam-filters, we are concerned that some of you may not be receiving our email notifications which are sent whenever a new piece is posted on the site.
This Flash Update has been emailed to all subscribers and so if you do not receive it, would you please let me know by emailing me at shadowstats@hotmail.com?.
Best wishes to all,
John
Walter J. "John" Williams