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July Jobs Report: Less Than It Sounds (+255k Jobs Added, But BIG Seasonal Adjustment)

This is a syndicated repost published with the permission of Confounded Interest. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

The S&P500 soared to dizzying heights and the US Treasury 10 year yield jumped 8.8 basis points on the July jobs report. The headlines screamed “255k Jobs Added!!!!!”

julybls

What the headlines DIDN’T say was that there was a HUGE seasonal adjustment to the data in 2016.

seasonal adjustment_ugh

But what is more troubling is the composition of WHO got the jobs. Let’s check out the employment-to-population ratio for 25 year olds and older with less than a high school diploma versus the Employment to Population Ratio for those 25 year olds and over with a high school diploma. The ratio has been falling for those with a high school diploma since the end of The Great Recession.

hsnohs

The same holds true for college graduates (orange line). The employment to population ratio has been declining since the end of The Great Recession.

collegegradvnohs

What does this tell us? It is a wage story. 25 year olds and over without a high school diploma earn less than high school or college graduations and their employment to population ratio has been rising since the end of The Great Recession.

Yes, I know, reading through the BLS employment report and tables  is almost as boring and stupefying as listening to a Hillary Clinton speech. But when investors dig deep into the report and see it was driven by 1) an unusually positive seasonal adjustment and 2) a growth in 25 year olds and over without even a high school degree, you begin to wonder if investors even read the reports.

Or as film producer Bobby Bowfinger stated, “We are going to get the best damn crew we can afford.”

bowfinfr)

 

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