TrimTabs Challenges Such Poor Jobs Data From BLS

The Labor Department’s report of 9.8% Unemployment and the dismal +39,000 non-Farm Payrolls data was so bad and so far under estimates that we have some questions about the accuracy of the data.  It just felt way off base, and the Labor Department has an extremely long history of revisions through time because of calculations being wrong and even as a result of computer error.  More importantly, TrimTabs is questioning the accuracy of this morning’s data.  Regardless of who is right, the job market is an unpleasant situation (to say the least).

After the rise in stocks this week, the DJIA would certainly be off more than 15 points at 1:18 PM if the numbers were really believed to be this bad.  The weekly data through most of November felt different, the retail sales data felt different, as did confidence.

TrimTabs does note that the retail hiring wave of October took away from the November numbers, which would make some sense.  Still, TrimTabs is maintaining its figure of 117,000 jobs created in November rather than the 39,000 reported by the BLS.  It noted the following:

• “We suspect the BLS estimate is too low because the BLS applies huge seasonal adjustments to their employment estimates this time of year,” said Madeline Schnapp, Director of Macroeconomic Research at TrimTabs.    “The November adjustment was nearly 1.3 million jobs and the October adjustment was nearly 1.0 million jobs.  That’s like trying to hit a needle with a sledge hammer. We believe large seasonal adjustments dwarf the BLS’ ability to accurately measure small changes in employment.”

The conclusion from TrimTabs is that the labor market improved this past month, in contrast to the anemic showing by the BLS.  Further noted was that the unemployment rate rose 0.2% to 9.8%, which comes to roughly 15.1 million unemployed workers; and while the number of unemployed increased by 276,000, the labor force grew by a smaller 103,000 workers.  Effectively, that slightly offsets the increase in unemployed workers.

TrimTabs still confirms one underlying theme.  The jobs market stinks.  Many of these retail positions that were added are also likely to flushed out later in January after the gift card business and the demand of processing returns has slid.

We are a long ways off from a good jobs market.  Stay tuned.  24/7 Wall St. is presenting a plan over the weekend that to propose the creation of 2 million jobs immediately before Ben Bernanke can defend this QE2 notion on 60 Minutes this coming Sunday.

JON C. OGG