Jobs Expand But Badly Miss Estimates

Jobs expanded but were less than half of consensus estimates. The unemployment rate fell only because of the declining labor force.

BLS Jobs Statistics at a Glance

The BLS reports total nonfarm payroll employment rose by 245,000 in November and the unemployment rate edged down to 6.7 percent.

The Bloomberg Econoday consensus was 500,000 jobs. ADP estimated 307,000 jobs.

Details from the monthly BLS Employment Report.

  • Nonfarm Payroll: +245,000 to 142,629,000 - Establishment Survey
  • Employment: -74,000 to 149,732,000- Household Survey
  • Unemployment: -326,000 to 10,735,000- Household Survey
  • Baseline Unemployment Rate: -0.2 to 6.7% - Household Survey
  • U-6 unemployment: -0.1 to 12.0% - Household Survey
  • Civilian Non-institutional Population: +160,000 to 261,085,000
  • Civilian Labor Force: -400,000 to 160,467,000 - Household Survey
  • Not in Labor Force: +560,000 to 100,618,000 - Household Survey
  • Participation Rate: -0.2 to 61.5% - Household Survey

Initial Reaction

Actual employment fell by 74,000. The unemployment rate declined because another 400,000 people dropped out of the labor force

BLS Error Rate

For March through September, BLS published an estimate of what the unemployment rate would have been had misclassified workers been included among the unemployed. Repeating this same approach, the overall October unemployment rate would have been 0.4 percentage point higher than reported. However, this represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.

According to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify | survey responses.

I strongly question the accuracy of the BLS assertion that 0.4% is the high end of their error rate. 

Also note the rise this month to 0.4% from 0.3% last month. This is the first increase in many months.

Job Revisions

  • The change in total nonfarm payroll employment for September was revised up by 39,000, from +672,000 to +711,000
  • The change for October was revised down by 28,000, from  
  • +638,000 to +610,000. 
  • With these revisions, employment in September and October combined was 11,000 more than previously reported.
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