U.S. Employment Data: A Curious Divergence

IMG Auteur
Published : February 13th, 2013
455 words - Reading time : 1 - 1 minutes
( 2 votes, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Opinions and Analysis

From Panzner Insights:

Each month, the Bureau of Labor Statistics and Automatic Data Processing, Inc. detail what is happening in the jobs market. Although the tallies of monthly changes reported by each side are often out of kilter, their respective private nonfarm payroll totals have since the end of 2000 moved largely in tandem.

From December 2000 through December 2011, the median monthly gap between the two was 78,000, or 0.07 percent of the total. The largest reported difference was seen in November 2002, when the BLS total was 394,000, or 0.36 percent, higher than its ADP counterpart.

24hGold - U.S. Employment Data...
But as the chart shows, there has been a big change. From January 2012 through last month, the spread between the two series has widened dramatically as the BLS tally rose at a faster pace than the one reported by ADP. Over the span, the median differential was 614,000 jobs, or 0.55 percent. The minimum differential was 396,000, or 0.36 percent, in January 2012, while the maximum was 809,000, or 0.72 percent, in December 2012.

One possible reason for the disparity is that either the BLS or ADP altered the methodology they relied on in the previous 11 years and that statisticians on the other side have not yet cottoned on. While this is possible, I find it hard to believe that those who crunch the numbers for such an important data series would not be quick to incorporate an updated approach in their own calculations.

[Editor's note: some have pointed out that ADP did, in fact, revise their methodology in late-2012 to bring its figures more closely into line with those of the BLS; and yet, the gap between the two series appears to be as wide as ever. Say what?]

Another explanation is that statisticians at the BLS or ADP suddenly decided to “fudge” their numbers up or down, respectively. One obvious question, of course, is why would a company that stands to benefit from an improving jobs market want to report a more subdued sense of conditions on the ground than is actually the case? The logical answer is that they wouldn’t.

However, one could readily argue that many in Washington had a compelling interest in painting as bright a picture as possible of what was happening in an area of the economy that has remained in focus since the onset of the Great Recession. Why? Because they stood to gain from ensuring that policies that had benefited them personally–namely, continued government spending–remained in force.

One way to do that, of course, is to try and make it easier for those who were then in power to remain in charge after the next election, which just happened to be coming up in late-2012.

Hmmm.

<< Previous article
Rate : Average note :5 (2 votes)
>> Next article
Michael J. Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes, published by Kaplan Publishing.
WebsiteSubscribe to his services
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
What kind of person runs for public office ?
17 OctThemis
I liked the use of the self-actualization chart within the context of politicians and their motives. It probably applies to many in Hollywood as w...
The Silliness of the Bretton Woods Years
16 OctThe Recusant
KUDOS! The book is anti-gold slanted throughout and subtly mocks those that value gold as seen in that silly Las Vegas Golden Rooster tale. As I pr...
The Future (Not)
14 OctS W.-1
I have it on good authority that the Aliens living in Antarctica have discovered a way of turning Ice into Oil. All we have to do to secure ou...
Betrayal!
09 OctThemis1
I agree 100% with all the points you made. You have summarized my own anger and the reasons for it. My only consolation is that I believe the eli...
A silver price-suppression theory gets debunked
07 OctDoom
I think he linked the wrong article, because there's minimal facts and logic there relevant to price suppression. It's a shame, because I really wo...
Light It Up
07 OctThemis
I keep wondering whether the US is fermenting a war with North Korea so as to indirectly draw China in and delay implementation of the yuan-for-oil...
One Nation Under Gold (2017), by James Ledbetter
05 OctThe Recusant1
Sadly, I too hoped for a more even-handed assessment of gold in our economic history. The book IS biased and by the time I got to the 20th century ...
Fall of the Great Pumpkin
03 OctGypsy0
James, you've mentioned this 25th Amendment thing a few times. The primary reason the Deep State won't go that route is: when the attempt begins i...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS