Innocent Bystanders

Over a week ago I was noting the never-quite-here nature of the new nuclear arms treaty with Russia. We’ve been hearing that a deal is “weeks away” for 8 months, but it never gets closer. Now it seems to getting farther away:

The first major U.S.-Russian nuclear arms control treaty in nearly two decades should be ready for signing by the end of March, a senior Russian legislator said Wednesday.

I don’t doubt that they’ll eventually sign it. I’m just waiting for the last-minute demands to emerge when Russia thinks it has the administration over a media barrel.

A friend of mine who delights in yanking my chain sent me an excerpt from a blog posting at the Economist, which presented this chart (===>) from CBPP.org and said:

That’s a damning chart. It implicates a lot of people, including some of the same Congressional Democrats who are now joining Republicans in assailing the president for budgeted deficits, but who voted for the Bush tax cuts and the wars in Iraq and Afghanistan. Politically, this is a pretty important chart.

And if you look at the chart, you’d be hard pressed to disagree – it’s painfully clear that the Bush tax cuts and the wars are the largest and most enduring contributors to the deficit.

Save for the fact, that is, that this analysis is crap.

(more…)

Those who looked at the unemployment post yesterday witnessed me flailing around trying to reconcile the rise in employment indicated by the Household Survey with the fall in employment indicated by the results of the Establishment Survey (the Household survey polls people at home, and the Establishment Survey polls businesses). I wasn’t alone in worrying about this discrepancy – it was noted throughout the blogosphere.

In trying to figure out what was happening, I decided to see how well the two have agreed over the past year, the question being: is this disagreement typical? I certainly didn’t remember it being so bad in the past. So I decided to make a little graph:

This is the non-farm, seasonally adjusted, employment data as adjusted in Jan ‘10 by the BLS. In this graph, I divided both sets of data by the value at the starting point (Jan 2009), so that they can be more easily compared. So the value at the outset is 1 for both curves.

As you can see, while the curves have very different shapes, they both trend the same way – when Household data goes down, Establishment data goes down. Except for this latest data, where the Household data goes up, and the Establishment data goes down.

So January 2010 does in fact represent a larger discrepancy than we’ve seen in the past. I guess we’ll have to wait until next month to see which curve was giving a more realistic picture of the employment situation. But just looking at the two, the Establishment Survey appears to yield less noisy results, so for now, that’s where I’m putting my faith.

Economists were expecting 10 – 10.1%, I was expecting something higher, but look at what BLS tells us for the end of January: 9.7%!! I’m pretty shocked, and still trying to digest what all the adjustments made by BLS this month mean to the data. Here’s the chart:

Doesn’t make much sense to me, given that the unemployment filings were so high this month. But even the number of employed people went up:

I’m going to spend a bit of time this morning poring over the numbers, because they’re pretty momentous, if true.

Real-Time Pondering:

• Hmmm. Table B says that 8000 government jobs were lost, while Table A-8 says that 117,000 were added. (9am EST)
• So we lost 20,000 non-farm jobs, meaning that we added 520,000 farm jobs? In January? Methinks the seasonal adjustments have gone a little haywire. (9:14am EST)
• But Table A-8, which doesn’t appear to be consistent with any of the rest of the data, says that we added 59,000 farm jobs, and 559,000 non-farm jobs (9:21am EST)
• So the seasonal adjustment for January last year was about 1.8 million jobs, while this year it was only 1.5 million jobs. That seems like the right direction for changing the seasonal adjustment based on current economic conditions (i.e., you can’t lay off seasonal workers you never hired) (9:34am EST)
• All right – I’m baffled. I don’t understand how we can lose 20,000 non-farm jobs, add at most 60,000 farm jobs, and have the unemployment rate drop when the labor pool expanded. As far as I can tell, we should have stayed at 10%. Maybe I’m not following the adjustments or something, but for now I give up (9:58am EST)
• All right, now we’re getting somewhere. Apparently I’ve been caught trying to reconcile Household survey data with Establishment (business survey) data, and the two aren’t playing well together. I think the Household survey probably had some real issues this time around. (10:24am EST)

[Don't forget, you can now get the unemployment chart on t-shirts, mugs, and postcards!]

(more…)

The Department of Labor released the initial unemployment claims data for the last week in January, and claims rose again. “Unexpectedly,” of course. The last 3 weeks of data have all been around 475,000, which is not boding well for a mid-summer recovery, nor for tomorrow’s unemployment rate. Here’s what the data looks like:

As noted by Hot Air yesterday, the prediction for tomorrow’s numbers is:

Analysts expect a gain of 5,000 jobs and an uptick in unemployment to 10.1%

Based on the claims numbers, I’m not nearly so optimistic.