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Friday, 5 April 2013

Will we see another "good" jobs report today?

Posted on 02:53 by Unknown

Consensus for non Farm payrolls is +193,000.

Background 

Because of the full introduction of Obamacare, employers are moving full time employees to part time work.
Obamacare has also changed the definition of full time work by reducing the number of hours to 30+.
Previously, standard practise was to define full time work as 32 hours+.
Employers are increasingly making employees work less than 30 hours to avoid the huge costs in benefits that would otherwise be incurred.
Employers are then taking on a few more part time employees so that the total number of hours worked is about the same.
Fast food chains are reporting that they can save about $20,000 a year per outlet using this scheme.

For February :-
459,000 new part time jobs were created (a HUGE increase)
289,000 full time jobs were lost.
http://ian56.blogspot.co.uk/2013/03/february-jobs-reports-explained-and-why.html

I am expecting a very similar sort of thing for the March jobs report.
    
(I don't know what the difference will be between the business survey and Household survey for March.
In February the business survey was 66,000 jobs higher than the Household survey - which is explained in the link above.
The business survey number is the one used in the consensus estimates and for the media headlines.)

Update 

Maybe not.
There is a huge disparity between the Establishment survey (+88,000) and the Household survey (-206,000).
There was a complete reversal of February's report with -513,000 part time jobs and and therefore an increase of 307,000 full time jobs.

January and February's jobs numbers were increased by 61,000 in total for the Establishment survey in order to get a bigger miss for March.
Mainstream analysts predictions are currently for Q1 GDP to be +2.5% when it was always going to be something around +0.5%.
Making the March numbers miss by 100,000 instead of 40,000 will get the mainstream analysts scrambling to adjust down their Q1 GDP expectations and drip feeding it out so that it is not as big shock to the system when Q1 GDP is reported on 26th April.
 
It is very similar to the tried and trusted method of guiding down Corporate profits during a downturn so the results are not a shock to the market when the Corporate profits are actually reported.

(It will also stop all the nonsense talk of the Federal Reserve tapering down their printing because the economy is improving. The economy is most definitely NOT improving and the Fed fully intend to keep their massive program of money printing going for many years yet.)

Household survey
http://www.bls.gov/news.release/empsit.a.htm

Establishment survey
http://www.bls.gov/news.release/empsit.b.htm


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