The Jobs Report Panic: When is it Necessary?

The Jobs Report for May came out this past Friday and it on the face of it, it was a real winner. 431,000 jobs added is tremendous. So why did the stock market plummet 317.64 points? Because most of the hires (411,000) were for the census. I have two responses to this:

  1. 431,000 jobs is still a lot of people working. I don’t care of it’s temp work for the census. That means many more people are showing up at a job, paying taxes, and most likely paying bills. The census workers contract run out sometime in August so these jobs will dry up, but every month of positive gains staves off a double dip. The work week and wages improved as well.
  2. Although the hiring was central to one main group, the Federal government, it doesn’t mean it will end up that way. There were only 3 days for the Bureau of Labor Statistics to prepare the numbers because Monday was a holiday. The more days between the end of the month and the report the smaller the revision. I ran some very unscientific numbers based on the past year and my own records . As you can see, the deeper into the next month it goes, the more accurate the report (ignore the numbers and look at the trend). So I expect this month’s report to be improved, but when the revision comes out no one will remember the panic of this past Friday.


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