Inquiring minds just might be wondering how we created 151,000 jobs in October. As it turns out, about 100,000 of them was a seasonal adjustment, and I am not even talking about the much maligned BLS Birth-Death Model that 10 months out of 12 presumes the economy added jobs that no once can see.
I am talking about regular "seasonal adjustment" factors, and last month was a doozie. The latest issue of Barrons discusses the The magic of seasonal adjustment.
THE JOBS REPORT FOR OCTOBER was released by the Bureau of Labor Statistics on Friday, and at first blush was surprisingly strong, much stronger, indeed, than expected. Payrolls expanded by 151,000 and the two previous months' were revised upward. But hold the hurrahs.
Happily, the always astute Stephanie Pomboy of MacroMavens provided a quickie explanation:
"The seasonal bar which the payroll data must jump was (inexplicably and dramatically) lowered from prior Octobers."
Thus in October 2009, the BLS set the bar at 870,000 jobs, similar to the 840,000 it anticipated in October 2008. This year, by contrast, it lowered the bar to 768,000. Mumbo, jumbo, payrolls presented "an upside surprise" of 100,000.
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