A statistically meaningless increase in August private sector jobs data “eased recession concerns,” Bloomberg reported on September 3. Private sector jobs gains came in 27,000 above the consensus forecast of 40,000.
We see the touted jobs gain as nothing but statistical noise. The Bureau of Labor Statistics' 95 percent confidence interval in reporting of monthly change is +/- 129,000 jobs. Yet, “stocks climbed around the world” as a result of a statistically meaningless jobs gain. The flimsy jobs report “sent stocks to their best pre-Labor Day week in two decades” (MarketWatch).
“The worst fears were not realized,” declared Stephen Stanley, chief economist at Pierpont Securities. “The double-dip talk was probably misplaced,” said Maury Harris, chief economist at UBS Securities.
These are strong conclusions to be drawn from a statistically insignificant result. But anything will do to fend off reality.
Looking behind the headlines at the BLS August jobs report, we see an unsettling picture. Total nonfarm payroll jobs fell by 54,000 from the previous month, due to a 121,000 decline in state employment jobs and federal census worker employment. (more)
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