Flash Update
M3 Growth Hits 11%, December Jobs Revised Upward by 933,000
The SGS Alternate Data pages have been updated for M3, GDP and the U.S. Dollar. Based on three weeks of reporting through January 22nd, annual M3 growth hit 11.0% in January, helped by rising M2 growth.
The Alternate GDP shows ongoing recession with 4Q06 annual real (inflation-adjusted) change at minus 1.4% versus minus 1.5% in 3Q06. Official reporting was 3.4% for 4Q06. Wednesday's commentary mistakenly noted a decline in inventory growth had boosted the GDP number, a decline in inventory growth subtracts from GDP growth.
The January employment report may have been weaker than consensus at a monthly gain of 111,000 +/- 106,000 -- viewed in isolation the monthly numbers were quite weak -- yet the overall report was far from weak and increasingly removed from reality.
Thanks to Bureau of Labor Statistics (BLS) methodology, the upside benchmark revision of 754,000 jobs to the seasonally-adjusted March 2006 employment level translated into an upward revision of 933,000 to the previously reported December 2006 payrolls.
Blamed for the "needed" revision were inadequate bias factors (birth/death model) and problems in measuring Katrina-related employment effects. So the bias factors are being revised upwards, and the BLS still does not understand the reporting problems it has had along the Gulf Coast. Annual jobs growth now was 1.7% in December (slowed to 1.6% in January) against last month's December reporting of 1.4%.
Emphasizing the lack of BLS credibility, the increase in the U.3 unemployment rate to 4.6% in January from 4.5% in December was meaningless, because the numbers were not comparable and consistently prepared. The BLS updated its population estimates last month. There was a time when the BLS showed before and after numbers so that the effects of revisions could be seen.
Further detail on all of the above follows in next week's newsletter.
Best wishes to all,
John
Walter J. "John" Williams www.shadowstats.com
The SGS Alternate Data pages have been updated for M3, GDP and the U.S. Dollar. Based on three weeks of reporting through January 22nd, annual M3 growth hit 11.0% in January, helped by rising M2 growth.
The Alternate GDP shows ongoing recession with 4Q06 annual real (inflation-adjusted) change at minus 1.4% versus minus 1.5% in 3Q06. Official reporting was 3.4% for 4Q06. Wednesday's commentary mistakenly noted a decline in inventory growth had boosted the GDP number, a decline in inventory growth subtracts from GDP growth.
The January employment report may have been weaker than consensus at a monthly gain of 111,000 +/- 106,000 -- viewed in isolation the monthly numbers were quite weak -- yet the overall report was far from weak and increasingly removed from reality.
Thanks to Bureau of Labor Statistics (BLS) methodology, the upside benchmark revision of 754,000 jobs to the seasonally-adjusted March 2006 employment level translated into an upward revision of 933,000 to the previously reported December 2006 payrolls.
Blamed for the "needed" revision were inadequate bias factors (birth/death model) and problems in measuring Katrina-related employment effects. So the bias factors are being revised upwards, and the BLS still does not understand the reporting problems it has had along the Gulf Coast. Annual jobs growth now was 1.7% in December (slowed to 1.6% in January) against last month's December reporting of 1.4%.
Emphasizing the lack of BLS credibility, the increase in the U.3 unemployment rate to 4.6% in January from 4.5% in December was meaningless, because the numbers were not comparable and consistently prepared. The BLS updated its population estimates last month. There was a time when the BLS showed before and after numbers so that the effects of revisions could be seen.
Further detail on all of the above follows in next week's newsletter.
Best wishes to all,
John
Walter J. "John" Williams www.shadowstats.com