logo
  Join        Login             Stock Quote

Evidence Of Employment

 March 09, 2012 07:59 PM


Friday, the US Bureau of Labor Statistics (BLS) released February's Employment Situation report, aka, the unemployment report. In the month, the unemployment rate held steady at 8.3%, matching analysts' estimates. Private payrolls, however, beat estimates—rising 233,000. Government payrolls continued to fall, this time by -6,000. So there you have it. The labor market continued improving last month, at least according to government data.

Yet many remain skeptical regarding the improvements—noting government employment data have statistical issues. (Some even take it far, far further.) Without doubt, we certainly agree taking government data with a grain of salt is wise. Consider, for example, the unemployment rate can move (up or down) even if there are absolutely zero people hired or fired in a given month. But it isn't as though BLS data are without value.

[Related -Has Warren Buffett Found The Best Investment In Oil?]

BLS unemployment data have a very long history, contain many different statistical points and are widely watched by analysts and investors. In that sense, how these points relate to expectations can be important. Also, the data provide one potential way to assess health of the labor market—a way to see trends. And trends indicated by government data can easily be tested using non-government-sourced data.

[Related -The Return Of Crisis]

Payroll services firm ADP has published a series of payroll data since 2001. Now, that's perhaps too short to draw many major macroeconomic conclusions on its own (few economic cycles are contained in that timeframe). But it could add color to one's assessment of government labor market data.

Exhibit 1: ADP Private Payrolls vs. BLS Private Payrolls (Monthly Change, in Thousands)

Sources: ADP, US Bureau of Labor Statistics, Federal Reserve Bank of St. Louis.

As shown, the two tend to track each other closely—and both show relatively similar-sized job gains in recent months.

But one needn't stop with ADP. The Institute of Supply Management (ISM) conducts monthly surveys regarding employers' expectations—and one component is hiring. Now, these indexes don't necessarily show how many jobs were added. But they do show the prevalence of expected hiring by private businesses—painting a picture of expected job supply.


Next Page >>12
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageHas Warren Buffett Found The Best Investment In Oil?

Shares of oil stocks plunged again as the price of West Texas Intermediate wiped out nearly half of its read on...

article imageDemand For Safe-Haven Bonds Surged Last Week

The crowd piled into investment-grade bonds last week as economic worries triggered an exodus out of risky read on...

article imageThoughts on MetLife and AIG

In some ways, this is a boring time in insurance investing.  A lot of companies seem cheap on a book and/or read on...

article imageA 2016 Recession Would Be Different

If the US or the Eurozone entered a recession this year, a few macroeconomic variables would look very read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

Demand For Safe-Haven Bonds Surged Last Week
More Articles on: Finance



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.