Did new small business jobs creation boom in October during the government shutdown/default crisis?
Well, you might think so by looking at the Bureau of Labor Statistics 'Birth-Death' model report contained in today's October Non-Farm Payrolls Report.
According to the Birth Death Adjustment there were 126,000 jobs added in October. And what an October it was apparently. These are the most new jobs added for any October going back to 2003, which is as far back as my own spreadsheet goes.
A more usual number might be around 103,000 or less. So, someone thinks it was a strong October jobs market.
You can look at the historical Birth-Death Model numbers from 2000-2012
here. And there is a list of Frequently Asked Questions
here.
As I have cautioned in the past, the Birth Death number is added to the Non-Seasonally adjusted number, and then seasonally adjusted. So it is not a 'pure addition.'
The Non-Farm Payrolls report contains very large numbers, on the order of 137+ million jobs which are estimated and deseasonalized, and then further revised for the next two months. So reacting strongly to a particular monthly jobs report is a bit of a Wall Street and political game.
What is more important is the trend in the number of jobs, and the quality of the jobs, both in hours worked and hourly compensation.
The big
hoohah question is always, 'Is the government lying?' I think it is fair to say that they are certainly putting their best foot forward, in this and quite a number of things.
I am a little more concerned about the lies that take the US into wars of aggression to be frank. But economic deception can have very bad long term effects when coupled with bad economic policy decisions such as those we are seeing today, that are propagating and even increasing an inherently unstable economy.
All things considered, and not just the numbers in this report, the recovery is weak, and real median wages do not support any sustainable recovery. Inequity is increasing, and policy supports and subsidizes this growing inequality in both political and economic power.
Keep an eye on the real median wage, and you will have some indication on how the American public is faring. Although the calculation of inflation is fraught with the fog of politics. John Williams of
Shadowstats has done some excellent work in this area.
The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.
And that is the bottom line.
In this case the smaller the seasonality factor the bigger the jobs increase because the raw number is being divided by and
reduced in September and October to arrive at the seasonal adjustment. But there are so many estimates involved that the answer really lies in the trends and even more importantly the
quality of the jobs.
