TWEAK AND TWIDDLE

There's an old saying go with what you got. The other side of that coin is sometimes you have no choice. Those market commentators who after China's circuit breakers came unglued twice last week, before officials retired them, focused on Friday's job report to paint a rosy picture in all the surrounding market gloom. Here's an example.from MarketWatch.

One of the few bright spots for the U.S. economy remains the employment situation. Friday’s jobs report for December showed a 292,000 increase in non-farm payrolls, a combined upward revision of 50,0000 to October and November, and an unemployment rate steady at 5%, the cycle low.

Those job numbers for December were up 40% from what most observers expected. That's not a misprint, 40%. And as noted above, the October and November numbers were increased by 50,000.  And just for emphasis the unemployment rate remained, conveniently, steady at 5%.

Are we the only ones who suspect tweaking and twiddling here? We don't think so. Here's just one example, there are others. Like yin and yang, when it comes to trusting government numbers, when you see tweaking, twiddling ain't far behind.

Here’s a newsflash that CNBC didn’t mention. According to the BLS, the US economy generated a miniscule 11,000 jobs in the month of December.

Yet notwithstanding the fact that almost nobody works outdoors any more, the BLS fiction writers added 281,000 to their headline number to cover the “seasonal adjustment.” This is done on the apparent truism that December is generally colder than November and that workers get holiday vacations. 

Of course, this December was much warmer, not colder, than average.  And that’s not the only deviation from normal seasonal trends. The Christmas selling season this year, for example, was absolutely not comparable to the ghosts of Christmas past. Bricks and mortar retail is in turmoil and in secular decline due to Amazon and its e-commerce ilk, and this trend is accelerating by the year.

So too, energy and export based sectors have been thrown for a loop in the last few months by a surging dollar and collapsing commodity prices. Likewise, construction activity has been so weak in this cycle—-and for the good reason that both commercial and residential stock is vastly overbuilt owing to two decades of cheap credit—–that its not remotely comparable to historic patterns.

Never mind. The BLS always adds the same big dollop of jobs to the December establishment survey come hell or high water. In fact, the seasonal adjustment has averaged 320,000 for the last 12 years! More:
davidstockmanscontracorner.com/newsflash-from-the-december-jobs-report-the-us-economy-is-dead-in-the-water/ 

Here's another from this week' edition from Barron's.

THE DECEMBER EMPLOYMENT REPORT , released Friday, further confirmed that the U.S. economy is more than weathering the various storms.

Nonfarm payroll employment rose by 292,000, far more than the consensus expectation of 200,000. With upward revisions of 50,000 to prior months, the third quarter saw average monthly gains of 284,000, 2015’s best quarterly performance. The unemployment rate held at 5%. As seen in the chart, contrary to the myth that the labor market is characterized by the “gig economy”—self-employed workers on contract to companies like Uber—self-employment as a share of the total has been falling through this expansion. Job growth has mainly come from full-time wage-and-salary positions.