BLS Jobs Report: Nonfarm Payroll Headline Number Looks Good, Beneath the Surface, Awful

"Thoughts on the Jobs Report Thoughts on the Jobs Report

On the surface, this was the third consecutive solid jobs report, not as measured by the typical recovery, but the best back-to-back reports we have seen for years. The Payroll Survey Establishment Data showed employment up by 244,000.

At that pace of hiring, the unemployment number would ordinarily drop, but not fast.

Instead, the unemployment rate ticked up. The reason is beneath the surface, employment fell by 190,000 according to the Household Survey.

According to the Household Survey, the number of unemployed rose by 205,000. Another 131,000 dropped out of the labor force or the unemployment rate would have been even higher.

Which survey to believe?

It is hard to say on one month's data. However, during a recovery the household survey is supposed to lead. Moreover, the household survey is more consistent with three recent reports.

1. Weekly Unemployment Claims Soar to 474,000; Bogus Excuses Offered
2. Oil Consumption Demand Destruction vs. Speculative Futures Positions
3. Non-Manufacturing ISM Plunges Below Prediction of All 73 Economists, New Orders Collapse, Prices Firm; Did Rosenberg Capitulate at the Top?..."

at http://globaleconomicanalysis.blogspot.com/2011/05/bls-jobs-report-nonfarm-payroll.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29