Lies, damn lies and government economic statistics
Goldman sees a February NFP of -100,000 due to February’s snow storms. But the Census Bureau says it has hired 56k temps in a March 1 release. Will those jobs be slotted in February or March?
We keep braying that tax data is the most accurate gauge of the US economy and government keeps manufacturing better than reality jobs data (also GDP & CPI). Here’s further proof:
Mercury News: California lost far more jobs last year than the state initially reported, according to a new report that provides an early glimpse into statewide employment trends.
“The economy was a lot worse than everybody thought,” said Howard Roth, chief economist with the state’s Department of Finance. “The job market is weaker than we figured.”
According to an estimate from the state Employment Development Department, California employers shed 871,000 jobs in 2009. If that estimate holds up when final revisions are released this month, California’s job losses would be far more grim than first believed. The agency reported as recently as Jan. 22 that California employers chopped 579,000 jobs from payrolls in 2009.
That would translate into 292,000 more lost jobs…
Why are job losses so much worse than first thought? The EDD’s monthly estimates depend in part on the number of employers it believes exist in California at a given time. But the recession has erased numerous companies. “Businesses went away and no longer existed that we originally thought were there,” said Dennis Meyers, an economist with the state finance department… [Their guesses were bogus.] http://www.mercurynews.com/business/ci_14493421?nclick_check=1
According to UN data for 2008, manufacturing is only 13% of US GDP. So when bonds or stocks react violently to the ISM or Chicago PMI, the market is not acting efficiently or rationally.
Business Week’s chief economist, Michael Mandel on GDP: First, the category of “personal consumption expenditures” includes pretty much all of the $2.5 trillion healthcare spending, including the roughly half which comes via government. When Medicare writes a check for your mom’s knee replacement, that gets counted as consumer spending in the GDP stats.
At a time when we are wrangling over health care reform, it’s misleading to say that “consumer spending is 70% of GDP”, when what we really mean is that “consumer spending plus government health care spending is 70% of GDP.”…
Reuters: PIMCO’s El-Erian: sovereign risks key issue in 2010
Investors must recognise balance sheets of governments and sovereign risks are a key issue this year, Mohamed El-Erian, chief executive officer of PIMCO, said on Tuesday.
The U.S. Postal Service projects it will lose $238B over the next decade – which means it will lose more.
In yesterday’s missive we opined that the environment is similar to that of late 2007/early 2008. And now there is this bit of déjà vu: Toyota and GM have announced 5 year 0% financing. It seems like only yesterday that GM cannibalized future sales with low financing and high incentives.