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October 05, 2004

White House Counts Its Chickens: Expecting Significant Upward Revision in FY 2004 Jobs

Bush succeeds by lowering expectations and then exceeding them. When he gets into trouble, it's because he raises expectations and can't match them.

Nevertheless, that seems to be Bush's favored mode for the past couple of years-- overpromise, underdeliver.

If I were in the White House, I wouldn't be telling the press that I expected a significant upward revision in the number of jobs created in the 2004 fiscal year. I would leave that sort of thing to its pajama-wearing partisan political operatives on the internet, such as myself, as well as smooth anonymous sources like Deep Stoat, who I'm pretty sure looks like a young Hal Holbrook, minus the chainsmoking.

And then, if it came to pass-- big, sweet surprise. If it didn't-- no harm, no foul.

But I'm not in the White House. I can keep my name a secret, but there are a lot of West Wing Chatty Kathy's who can't hold their expectations of about the Bureau of Labor Statistcs' end-of-year jobs revisions on the QT.

They're raising expectations, which could cause a crushing disappontment on Friday if those expectations aren't met, and accusations of "political manipulation" if they are.

But here is what they're saying:

NEW YORK, Oct 5 (Reuters) - White House economists expect that this week's revisions to nonfarm payrolls data, the last released before the Nov. 2 presidential elections, may show substantial labour market gains for the March 2003 to March 2004 period, the Wall Street Journal reported on Tuesday. The newspaper cited a memo by U.S. President George W. Bush's Council of Economic Advisers as stating that revised data for March 2003-March 2004 could be revised upward by 288,000 jobs, and [even] as much as 384,000.
...

The White House estimate, prepared by career CEA technical staff, has no effect on what the independent Bureau of Labor Statistics will actually report on Friday, the article said.

...

According to the article, the CEA memo uses publicly available unemployment insurance records to calculate that employment from March 2003 through December 2003 grew by 288,000, or 32,000 per month, more than previously published BLS estimates.

The Journal also cited the memo as saying "it is tempting" to extrapolate the monthly figure out to March 2004, producing a total increase of 384,000.

But it downplays the higher figure, warning that employment in the first three months of the year could well be revised down, not up, citing other data revisions that tilt in that direction.

Anything that's "tempting" is probably something you shouldn't do. That's half of what makes it so tempting.

So, now we've established a Bar for Success for the liberal legacy media, which the Bush Administration is required to clear and beat just to be considered to have not failed. And anything lower than 300,000 revised FY 2004 jobs will be called a failure.

Dumb. Very dumb, guys.

The White House needs a new man as Chief of Staff, and that man's name is Vinny Falcone.

Since they've already raised expectations, I'll speculate a bit further. Bush is down, what now?, around 900,000 jobs, right? 250,000 jobs created in September plus 300,000 revised 2004 jobs knocks that deficit down by another 550,000, leaving Bush's fabled "jobs deficit" at around 350,000 -- a number of jobs he'll almost certainly create by the end of his first term, if not the November 2 election.

Anything better than that is gravy. It is not inconceivable that a big September combined with a very big upward revision would almost entirely eliminate the jobs deficit by the end of the week.

But let's not get hopes up. Job creation has been inadequate for the past three or four months.

posted by Ace at 03:00 AM

Comments

more cowbell!!
http://www.alphapatriot.com/home/archives/2004/10/02/bush_boom.html

Posted by: susan on October 5, 2004 04:05 AM

I wouldn't ring the cowbell yet.

The WSJ said today it would be a bad idea to revise upwards based on the Household Survey, citing the Cleveland Fed's study saying it can't be trusted on population projections & it's generated numbers. The Fed also says that if the usable data within the Household Survey is analyzed, it too suggests that the recovery continues without the normal level of recovery job creation after previous economic Recessions.

http://online.wsj.com/public/article/0,,SB109693799501436155,00.html?mod=todays%5Ffree%5Ffeature

Posted by: Cedarford on October 5, 2004 09:56 AM

Upward revisions to the payroll survey have nothing to do with the household survey. The annual benchmark revisions and estimates are based on unemployment insurance tax records which are only available on a lagged basis.

Posted by: Larry Jones on October 5, 2004 01:54 PM

Cedarford is determined to "stay the course" on his erroneous reading of the articles in question.

Posted by: ace on October 5, 2004 02:28 PM

You may wish to read the WSJ essay I linked to, ACE.

Posted by: Cedarford on October 5, 2004 02:37 PM

I read it.

Look, you're a valuable poster, and I don't want to insult you. But you're like someone who just learned one thing and won't stop talking about that one thing.

Yes, the household survey is considered unreliable by most economists. Yes, the employer survey is the survey that is "real" for most analysts.

But you continue insisting that the upward revision will be based on the household survey, despite being told a dozen times that the household survey has NOTHING to do with the upward revision. The upward revision is based on a re-reading of the data that went into creating the monthly jobs creation numbers in the first place, with special reliance on weekly unemployment claims.

Until you can actually cite an article that actually says what you want it to say -- "The revision is based on the household survey" -- I'm not going to respond to your posts on these subjects. You have something in your head with no evidence to back it up and you just keep repeating it.

The point about this cycle not being very different from previous jobs-poor recoveries is well-taken, on the other hand.

Posted by: ace on October 5, 2004 03:04 PM

I'm sorry if that was snotty. But I just don't know how many more times we can go around this mulberry bush. The Yes it is/No it isn't thing is getting old.

Posted by: ace on October 5, 2004 03:14 PM

ACE - I am not trying to engage in a pissing contest. I am just pointing out that the Bush people have trotted out the Household Survey as proof that Bush's tax cuts have created huge, unaccounted for jobs since 2002, and tried pressuring the BLS to raise job created revision figures on that basis. Which the Fed also regularly weighs in on and basically says - BS.

From the WSJ article:

Even with positive revisions, Democrats probably will be able to attack Mr. Bush as the first president to oversee no net job creation since Herbert Hoover. Republicans have countered that the Bureau of Labor Statistics' household survey shows employment actually up 1.9 million, or 1.4%, under Mr. Bush. But a study published earlier this year by the Federal Reserve Bank of Cleveland finds the household survey, examined more closely, tells a much less positive story

Working in HR consulting, I can tell you there is little pressure on employers to raise wages. This is still regarded as a jobless recovery unlike all past standard Recession recoveries. Due to globalization, things have changed. I think from the context of your 3:04 PM post you agree, though the wording is different. And supply side economists still try to puff the Household Survey into jobless revisionism.

It bears on a major policy area - that needs serious review, despite Club for Growth threats against recalcitrants. Tax cuts going to the wealthiest have been an inefficient method of creating jobs. As a fiscal conservative, if America wishes to borrow 1 trillion from Asian, German, French, and Arab bankers - I want to see that put into investment in the country rather than mansion-expanding. The notion that loads of extra money in the pockets of the rich would result in them more wisely putting it into capital investment & new job creation is proving to be faulty. They are using their gains from those those borrowed taxpayer dollars to invest in goverment debt instruments or just spending it on lifestyle augmentation. Better the foreign borrowed money be invested in areas we absolutely know will create jobs and in projects we know will benefit all Americans. We lose 336 billion in annual GNP productivity because we can't afford 86 billion in highway improvements. We need 30 billion in broadband investment to get another 100 billion a year in GNP growth and match what is going on in Europe and Asia. . We also know that direct investment of 1 billion in America's infrastructure creates 50,000 good middle class jobs from past projects. With oil at 51 a barrel, we know we need to have some significant Fed dollars going into a long-overdue energy policy - supporting pipeline construction, facilitating regulatory bodies efficiently reviewing and approving new exploration, and supporting conservation and new energy technologies.

We also know that Venture Capitalists are insisting that new technology business models maximize outsourcing from the start - and not have to transition from American to Chinese workers later, even if that means delaying production for the 6-12 months needed to train and gear up the Guandong factories.

So ACE - it is just for me a question of policy altering. Borrowed money for tax cuts targeting the wealthiest have not achieved the objectives initially laid out to justify them. The Household Surveys the last holdouts raise up to show the tax cuts are doing the trick, are believed to be Hokey. The last major tax-cutter, Ronald Reagan, had no problem shifting course and signing the 1986 tax reform package that forced the wealthy to pay their fair share and put money into the 600 ship Fleet construction, SDI, high tech tax breaks, and major infrastructure upgrade bills on railroads, highways, and long-neglected bridges.

Posted by: Cedarford on October 5, 2004 05:41 PM

Working as an HR consultant makes you an economist now? That's convenient.

I'm sure you just love the sight your own writing, but would it be so hard for you to stay on topic?

Ace's posts on this subject have NOTHING to do with either 1) the household survey, 2) tax cuts, or 3) outsourcing.

For the umpteenth flipping time, upcoming revisions to the payroll survey have NOTHING TO DO WITH THE HOUSEHOLD SURVEY. Shiva H. Vishnu....

Moreover, the WSJ does not publish "essays" on its news pages. It publishes news articles.

Posted by: Larry Jones on October 5, 2004 05:55 PM

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"It's f**king f**ked."
-- reportedly a genuine comment offered by a "senior Labour source"
Correction: I wrote that Labour is losing 88% (now 87%) of the seats it is "defending." I think that's wrong. The right way to say it is the seats they are contesting -- that is, they don't necessarily already hold these seats, but they have put up a candidate to run for the seat. It's still very bad but not as bad as losing 87% of the seats they already held.

Basil the Great
@BasilTheGreat

🚨ED MILIBAND [a Minister in Starmer's government] SAYS KEIR STARMER WILL RESIGN AS PRIME MINISTER

He has reportedly reassured Labour MP's that Starmer will be resigning following the disastrous results tonight

It's over

"The end of the two party system in the UK" as first the Fake Conservatives and now Labour chooses political suicide rather than simply STOPPING THE INVASION
Incidentally, the only reason this didn't already happen in the US is because of the Very Bad Orange Man (who is right on 85% of all policy calls and extremely, existentially right on 15% of them)

No political party that is NOT also a doomsday religious cult would EVER choose a cataclysmic loss -- and possible extinction as a party -- to support a toxically unpopular favoritism of NON-CITIZEN ILLEGAL MIGRANTS over actual citizen voters.

Only a cult does this.

Now they've lost 84%.

Annunziata Rees-Mogg
@zatzi
If this continues Labour loses 2,148 seats tonight.

That is much worse than the worst case predictions I’ve seen.

Cataclysmic

Update: They've now lost 88% of the seats they're defending. As I mentioned earlier, I think I heard that London will not bail them out, as many of those Labour seats will probably flip to "Muslim Independent" or Green. Detroit's 5am vote will not save them.

Yup, Labour is losing 80% of its seats...

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🚨 BREAKING: Labour have lost 80% of all seats contested as of 2:25 AM.<
br> If this continues, Keir Starmer will be out of office next week.

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Remember, when they call other people "cultists" -- they are the ones so imprisoned in their social reinforcement and discipline bubbles that they will choose political death rather than dare upset the Karen Enforcement Officers of their cult.
Update: Now they've lost 83% of the seats they were defending.

(((Dan Hodges)))
@DPJHodges

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Nick Lowles
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Tonight’s results are calamitous for Labour. Not just for Keir Starmer's leadership, but for the very future of the party

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