Friday, April 7, 2017

March Jobs report - the other survey - the Household survey

The other jobs report – the Household survey

The previous two jobs reports are from the Payroll or Establishment survey.

The Household survey is not where the headline number comes from.  It is from the Payroll survey or often called the Establishment survey.  Interestingly, the unemployment rate and the participation rate are calculated from the Household survey.

This Household survey is poor.  I don’t know which is correct.  I have often thought the Household survey is more responsive to changes in the economy.  That it leads the Payroll survey.  If so, it isn’t a good sign.  We will see.

Here is the number of jobs created from a year ago.

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March Job Reports - the from a year ago report

A good way to see how jobs are growing is to look at how many new jobs have been created since a year ago.  You can see that March doesn’t look good compared to recent years except March 2013.

April might be telling.

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March Jobs Report

Every year there is a job cycle.  Christmas season is peak employment.  November actually.  Every January there is a massive drop off in the number of jobs.  It has been running about 1.5 million jobs lost every January since 2011.  Then there is the climb back up to a new employment peak in November again.

The chart below shows lines for Januaries, Februaries, and Marches.  Marches are still negative from Januaries' drop off but a lot of jobs have been created by March.  Here is the number of jobs lost in recent Marches from the previous peak in November.

2017    -361,000
2016    -313,000
2015    -308,000
2014    -339,000
2013    -280,000
2012    -231,000
2011    -362,000

It is on the high side this year.  If there is a serious slowdown in job growth, which you can see there has been a mild one by the high March loss number compared to 2015 and 2016, such slowdown will probably be revealed in April.

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Sunday, April 2, 2017

Cost of the Federal Gov't relative to Federal Tax Receipts

Fiscal Year End September

                        Cost of Operating            Less Federal Tax          Equals Negative
Year                 Federal Government             Receipts                       Cash Flow

2016                4.404 trillion                    3.345 trillion                 1.047 trillion
2015                3.853 trillion                    3.334 trillion                    514 billion
2014                3,837 trillion                    3.099 trillion                    791 billion
2013                3.657 trillion                    2.842 trillion                    805 billion
2012                3.814 trillion                    2.518 trillion                  1.316 trillion
2011                3.660 trillion                    2.363 trillion                  1.312 trillion
2010                4.296 trillion                    2.216 trillion                  2.080 trillion
2009                3.434 trillion                    2.198 trillion                  1.253 trillion
2008                3.640 trillion                    2.661 trillion                  1.009 trillion
2007                2.909 trillion                    2.627 trillion                     275 billion
2006                2.901 trillion                    2.440 trillion                     449 billion

The close of the fiscal year 2007, September 30, there was near rejoicing and much lauding President Bush for bringing the deficit down so much.  Then the financial crisis and recession happened.  The ARRA, American Recovery and Reinvestment Act, was passed February 2009 but the $800 billion spending didn't really hit until the fiscal year 2010.  That spending resulted in the 2 trillion dollar negative cash flow that year.

In the ten years since 2006 the cost of operating the Federal government has gone up 52%.
In the ten years since 2006 Federal tax receipts have gone up 37%.
We are now in a structural 1 trillion negative cash flow.

Here is a graphic representation if it helps.

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Comment:  I think the structural negative cash flow is unavoidable.  Because it is structural.  The Federal Government is all about welfare and national defense.  Economists including at the Fed have long complained that they need help from fiscal stimulus to back up monetary policy.  So with these already massive deficits, how much bigger do they have to go to provide more stimulus?

Source of data:  Treasury annual financial statements.  Budget statements only include the effects of the income statement.  These statements include the balance sheet and are the correct, accurate and proper statements.