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How Bad Was That Yobs Report, Man? Not Bad At All, Just Wrong 5/10/21

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As soon as I heard that Friday's nonfarm payrolls report was the biggest "miss" in history, I knew that something was "amiss." 

And it wasn't the eConomissts estimates. As much as I can't stand Wall Street and most academic eConomissts, their jobs estimates are usually pretty good, rarely missing the BLS number by more than a few tenths or hundredths of a percent. This time, the difference was orders of magnitude. 

I knew from this that the eConomissts had it right and the BLS had it wrong. Very, very wrong.

Real Time Withholding Tax Collections - Click here

Could it be-ee-ee-ee, that the BLS, aka the Bureau of Liar Statistics wanted it that way? After all, a week jobs number would be a good reason for a bond market rally, and god knows the US Treasury and the Fed desperately want that, so as to keep their Primary Dealer pals the appearance of being among the living. 

Or was it just another massive error in their seasonal fudge factor reporting. As I've watched this data closely every month, one thing I noticed that after 2 monthly revisions and 5 annual benchmark revisisions the final number for the month usually looks pretty much like the central tendency of eConomissts' estimates for the first report. The eCons get it write, the BLS gets it wrong more often than not. 

This time they got it very very wrong. Let's dig into the numbers, just a bit. Does this look like a weak jobs report. We have 81 years of history on this. The first chart is the whole megillah. Then we zoom in to the last 5 years. 

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This is the actual data without the completely made up, seasonal fudge factor derived from a statistical trick formula called X-13 ARIMA. That essentially compares the current number to a 10 year average for the month. Just one thing is a little weird about that. The 10 years includes the last 5 years, and the next 5 years. Huh? Wait. What?

That's right. It includes data that doesn't exist yet. They project that too, and then they revise it based on the actual unemployment tax and withholding tax data every year until they have the final figure for this month 5 years from now. Got that?

Me neither. 

So what do we see in the actual data? Only the biggest year to year increase in history by orders of magnitude. Over 14 million jobs added since April 2020. And that is somehow a disappointment according to the BLS headline data. Just eyeballing the withholding taxes through month end April, and the actual, unfudged jobs survey, it seems patently obvious to me that the eConomissts' guesses were  a lot closer to reality than the BLS BS. 

Look at the actual BLS not seasonally manipulated data

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Fact. April had the largest month to month increase since April 2016. That was on top of a record increase in March. 

Fact. This was the largest 3 month increase of the past 5 years. Not only that. It was the largest 3 month increase in HISTORY. By far. 

Fact. This was the largest year to year increase in history, by far.

Fact. The survey date was April 12. The withholding tax data through early May showed that the trend was not only maintained, it accelerated. The increase was slower early in the month than post April 12. 

Conclusion: There is no basis whatsoever for concluding that the jobs rebound is slowing. There's no basis for concluding that the bond market "should" rally. There's no basis for concluding that the stock market rally should pull back. 

This stuff is red hot. Is there a basis then to conclude that the Fed will taper? Absolutely not. It can't, and I tell you why, and the strategy and tactical ideas to take advantage of what's ahead, here. Click to get a 90 day risk free trial.

 

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As soon as I heard that Friday's nonfarm payrolls report was the biggest "miss" in history, I knew that something was "amiss."  And it wasn't the eConomissts estimates. As much as I can't stan

Thanks. You can share it from here or WSE.   There are two ways to share a post from the board. You can share the thread, using the share icon at the top of the thread. Or you can share the post.

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Gold Going Nowhere, But We Have Mining Picks to Swing

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Now, to the charts. First, let's step back and look at 4 hour bars on the ES, the S&P fucutures for a little perspective.

So it would appear, we are either at the top to end all tops. or the breakout to end all breakouts. Are we clear on that?

lick to enlarge 

So we'll zoom in to 2 hour bars. Clearer.

 lick to enlarge

 

And finally our usual 1 hour bars look. The overnight pullback is now at a defining moment at 4225. Definitely looks due for correction to around 4210 for starters. 

 lick to enlarge

 

But a look at the 30 minute bars says that if 4225 holds, look for an upside breakout and a lunar launch in New York this afternoon. 

 lick to enlarge

If you are a new visitor, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.  

Stock Market Cycle Indicators Are Back In Gear

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22 minutes ago, potatohead said:

Is it me or is the green on your chart getting brighter, the higher the market goes up?

It's you, 

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I'm going to retire from teaching. Today's students are too busy watching porn on their cell phones in class. It's disgusting. 

Back in my day, we'd throw spitballs when the teacher turned his back.  

 

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