Jobs Report – December

Last Friday, the Bureau of Labor Statistics (BLS) reported that 200,000 jobs were created in December, 412,000 jobs in this last quarter of 2011. A look at the full report and the data behind it raises suspicions.  Why are jobs being rounded off to the nearest 100,000 this past quarter?  We understand that there will be revisions to the data in the months ahead but this gives the impression that there has been a change in the accuracy of the data in the past quarter.

Getting out our data picks, let’s dig down and look at seasonally adjusted retail employment shown on the report.

83,000 retail jobs created in the past quarter.  At first glance that looks like a healthy increase.  So I dropped the above data into a spreadsheet and found that not only is it a healthy increase in retail jobs, it is the best in more than a decade!

Did stores go wild with hiring this holiday season in anticipation of a robust consumer response? This past Thursday, chain stores reported that sales for November and December combined rose 3.3% but this was below 2010’s 3.8% growth. Next Friday we will get the full retail sales report, but indications are that this was not a robust holiday season.

How reliable are the data and the seasonal adjustments that the BLS makes to the data in this area?  I suspect that the BLS is not properly accounting for the holiday surge of hiring for online buying, which increased 15% this year to $35 billion (Source).  BLS methodology is accustomed to dealing with the 4th quarter hiring surge at brick and mortar retail stores but have they changed their methodology to adjust for the relatively new proportion of online sales and the hiring surge needed to meet the holiday demand?

In the months ahead, we may be in for some substantial revisions or surprises in the jobs data.

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