Seasonal Adjustments Likely to Boost Friday's Job Numbers

Mish

Seasonal adjustments for education and auto manufacturing are likely to give a big boost to Friday's job report.

The Econoday consensus estimate for Friday's jobs report is 1,675,000. The range is a whopping 200,000 to 2,400,000,

Seasonal Adjustments

The lead chart shows the unadjusted education totals. When the BLS seasonally adjusts the numbers it looks like this.

State an Local education Seasonally Adjusted

Calculated Risk explains the charts in his post State and Local Government Education Employment will Increase Sharply in July, Seasonally Adjusted

In the current school year (red), educators were let go earlier than usual due to the pandemic, with layoffs starting in March. It appears another 350 thousand or more educators will be let go in July NSA. 

Since there is a regular seasonal pattern, the BLS adjusts the hiring so the typical school year hiring and layoffs, Seasonally Adjusted (SA), is mostly flat.

However, in the 2019-2020 school year, layoffs started much earlier. Now, in July, the red line will have to come back close to zero after the seasonal adjustment. This would suggest about 850 thousand jobs added in July SA.

Auto Sector

On a smaller scale we may seem the same in the auto sector which often shuts down in July but did not do so this year.

Census Workers

Paid Temporary Census Workers

2020 Census Paid Temporary Workers will also boost employment, even more so seasonally-adjusted.

Continued State Unemployment Claims

Continued State Unemployment Claims in 2020 August 6 Report

The BLS reference week for the household survey unemployment rate is the week that contains the 13th of the month.

Last month the reference week showed 19,231,000 continued claims. For July, there were 16,951,000.

That does not impact the establishment survey jobs number, but all of these things impact the "official" unemployment rate.

This is a big of a mess and on top of it all, the BLS admits survey errors.

Mish

Comments (11)
No. 1-6
Boot6761
Boot6761

This is an election Year...there will never be an "agreeable" number as all of the data is manipulated to fit the narrative of whoever is the author.

PecuniaNonOlet
PecuniaNonOlet

87 days till election.

Do the numbers even matter at this point? Pouring a glass of water in a global desert isnt going to change anything.

Tony Bennett
Tony Bennett

Bottom line

Household survey on # of jobs

July 2019 ... 157,346,000

July 2020 ... 143,532,000

tokidoki
tokidoki

No more stimulus needed. Jobs are plentiful and people are flush with cash.

Zardoz
Zardoz

Hmm... a butt curve. Looks ominous.

MATHGAME
MATHGAME

Everyone knows the "games" that impact the unemployment rate ... The labor force participation rate in the United States decreased to 61.4 percent in July from 61.5 percent in June of 2020.


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