Business Media Stars Miss Key Story!
Today there was an extremely important story about employment. It was not reported by any of your favorite media sources. The most recently reported new job gains are the greatest since 1992. This is not the full story, of course, so you need to read on.
You should not be surprised, since here at "A Dash" I seem to have an "exclusive" on public information concerning actual hard data on job creation. The real data are reported quarterly, but the reports lag by about nine months.
Each quarter the BLS reports data from state employment agencies. Since no one pays insurance premiums on phantom employees, we can expect conservative information. The only problem is that it takes about nine months to get these actual counts.
Any honest observer of the market would circle the date of this release, wondering whether the predictions from nine months ago made sense. Most pundits do not. They do not want to document their own track records.
I understand that some think this is "old news." Big mistake. Serious researchers begin with data. Comments and predictions should be measured against data. When the data change, the analysis should follow.
The Latest Report
There are two key points to note. These should be in the lead of any media story.
- From March to June 2009 the number of gross job gains from opening and expanding private sector establishments was 6.4 million, an increase of 674,000 jobs compared to the previous quarter, the U.S. Bureau of Labor Statistics reported today. This is the largest over the quarter increase in gross job gains since the series began in 1992. [emphasis added]
- 1.3 million jobs were added at new establishments. This was the gross job creation at new businesses for the quarter.
Here is the key chart:
- If you want to understand the economy, you have to understand employment.
- If you want to understand employment, you must see it as a dynamic system — job creation, job losses.
- Understanding this dynamic might be the most important single indicator of the economy.
I am on record with criticisms about the BLS method of estimating job creation. Most of the pundits are aggressive in their criticism, since they do not distinguish between job creation and the net change in jobs.
The analysis is not really that complicated, despite the general media failure on this front. We expect to provide a significant edge to readers following our regular employment coverage.
I invite you to search for anyone discussing today's release. It shows the reality of data analysis in today's stock market punditry. When we have really solid data — like today — no one cares. When we have soft data, where everyone can criticize, add spin, and never be held accountable, then everyone has an opinion.
We live in a world where many disparage actual data and emphasize the anecdote.