Details behind today’s jobs number
From John Williams at Shadow Stats:
August Unemployment Rate Played Catch-Up; Seasonal-Factor Gaming Understated Monthly Payroll Decline. The August payroll and unemployment reporting showed the economic downturn to be very much alive and festering. Keep in mind that these statistics are coincident indicators of economic activity, not lagging indicators as hyped by Wall Street. As discussed in prior writings, July’s reporting had been distorted to the positive side because of seasonal-adjustments that had been pushed out of sync by the bankruptcies of Chrysler and General Motors. The reversal of those distortions plus ongoing deterioration brought about a worse-than-consensus increase in the unemployment rate. But for the gimmicks tied to the use of the Concurrent Seasonal Factor Bias (see that section), the monthly drop in payrolls also would have been worse-than-consensus, down 300,000 instead of the reported 216,000. Reality likely was in the range of a 500,000-plus monthly payroll loss.