I shutter to think of what a scrutinized life on the public stage would be like. For that reason I’m not one to point fingers. But either the Bureau of Labor Statistics is having its initial calculations prepared by interns who have yet to take Stats 101, or some oversight committee is pressuring the BLS to publish favorable headlines so that they can save face with the American public.
The Jobs Report that came out today shows that there were 50,000 new jobs created last month. We are accustomed to see a six figure job creation headline, so 50K is historically low to be sure. But the rub is that subsequent revisions published a month or two after the initial headline figure are being consistently corrected lower by a significant margin. For example, October and November revisions published today dropped a combined 76,000 off of the charts.
A decade ago I didn’t pay a whole lot of attention to data revisions because they were consistently insignificant and variable. Now I’m beginning to wonder if we should begin disregarding the headline and wait another month for the revised figures to be finalized before jumping to any conclusion. Unfortunately, markets move in nanoseconds and 45 day old data is passé.
Large scale economic findings used to sway markets. Stimulus, response. Stimulus, response. It’s simple psychology. The Unemployment Rate goes down, and mortgage rates go up. The US invades another country, and mortgage rates go down. More and more though, that psychology is changing. We’re seeing the correlation between economic factors and market reaction become increasingly insignificant. I’m not the only one who feels this way. And as a whole, we have become somewhat desensitized to even outrageous claims and sensational achievements. The status quo is changing, and we monkeys are learning to be more patient and thank you sir!dig a little deeper.
Having said that, the combination of renewed interest in mortgage back securities, the push to make housing more affordable, and a slowing labor market is very slowly beginning to bring interest rates downward. Maybe…
