Tomorrow's Jobs Report Will Look Far Better Than It Really Is

Mish

Most expect a horrendous jobs report tomorrow. But the April report will be far worse.

In the past two weeks initial unemployment claims soared by nearly 10 million. That's enough by itself to cause a huge spike in the unemployment rate.

The monthly jobs report comes out on the first Friday of every month. That's tomorrow, April 3.

But tomorrow's numbers will be wildly wrong because the bulk of the claims and layoffs fall outside the BLS Reference Period.

The establishment survey provides information on employment, hours, and earnings of employees on nonfarm payrolls; the data appear in the "B" tables, marked ESTABLISHMENT DATA. BLS collects these data each month from the payroll records of a sample of nonagricultural business establishments. Each month the CES program surveys about 145,000 businesses and government agencies, representing approximately 697,000 individual worksites, in order to provide detailed industry data on employment, hours, and earnings of workers on nonfarm payrolls. The active sample includes approximately one-third of all nonfarm payroll jobs.

Household survey. The sample is selected to reflect the entire civilian noninstitutional population. Based on responses to a series of questions on work and job search activities, each person 16 years and over in a sample household is classified as employed, unemployed, or not in the labor force.

For both surveys, the data for a given month relate to a particular week or pay period. In the household survey, the reference period is generally the calendar week that contains the 12th day of the month. In the establishment survey, the reference period is the pay period including the 12th, which may or may not correspond directly to the calendar week.

No Manipulation, Just Bad Timing

I expect to see manipulation claims tomorrow from people who do not understand how these surveys operate.

The Establishment Survey provides the baseline jobs number. The Household Survey determines the unemployment rate. The reference period for both is the week of the 12th.

Weekly Initial Claims

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Based on the reference date the surge in the unemployment rate that's baked into the cake will be barely visible in tomorrow's report.

Looking Ahead

The report for April, to be published on May 1, will contain almost all of what's happening now.

So don't be shocked at how good tomorrow's look. They are guaranteed to mislead.

In the April report, I expect to see the unemployment rate to surge to at least 12% and more likely something closer to 20% or higher.

For more discussion of initial continued claims, please see Unemployment Claims More Than Double Last Week's Record Total.

Mike "Mish" Shedlock

Comments (10)
No. 1-7
njbr
njbr

CBO just came out with a study estimate a 9% unemployment rate at the end of 2021. Yes, 2021.

2nd quarter 2020 GDP down 7% and unemployment over 10%--same study.

"V-shaped recovery"--if you work in decade charts.

numike
numike

"US stock futures up Thursday following record jobless claims number" Huh? Please explain Thank You

Six000mileyear
Six000mileyear

One recruiter sent me a job listing for sheet metal work in NYC yesterday. I responded, "Are You Kidding Me?! NYC is the COVID19 center in the US and there is a stay at home order!"

lol
lol

Last dozen years (bs)propaganda errr "jobs" report look far far better than reality,that's precisely why we are where we are today,by the end of the year less than 20% of the population will have any job.

Maximus_Minimus
Maximus_Minimus

Many (globalist) jobs will not be coming back. Local production will be back, but in what shape? The globalists money changers have overplayed their hand.

tokidoki
tokidoki

So 10 million next month?

That's pretty much depression, but I am sure the stock market will rally hard because it looks "6 months ahead"

ROFL.

MATHGAME
MATHGAME

Isn't the majority of trading these days done by algorithms? And it seems unlikely that the algorithms were ever written/parameterized to account for the kind of chaos currently in play. Besides, those algorithms are just like jojo and others, seeing no danger at all from some stinking (non-binary!) "bug" ... ;>)


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